Gap between sustainability plans and action in most companies

Sustainability initiatives often fail with good intentions

June 16, 2022
Many companies face significant barriers to implementing sustainability initiatives. Problems include lack of communication and commitment from managers, inefficient use of data, silo technologies that do not share processes or information, and lack of cooperation and partnership between companies and industries.

It shows a recent study conducted by Oxford Economics and SAP. Although the value of sustainability initiatives is not widely recognized, the study also shows that their business benefits are well known. Leaders in general are eager to make their organizations more sustainable, citing efficiency (58 percent), improving the brand’s reputation (46 percent) and meeting customer needs (44 percent) as the biggest business benefits of sustainability initiatives. A total of 63 percent of managers surveyed said their company already has a formal sustainability plan in place.

“Managers recognize that sustainability efforts can improve profitability, attract both customers and employees, and positively impact their supply chains,” said Vivek Bapat, senior vice president of Purpose and Sustainability, SAP. “Achieving these goals requires a high level of communication and commitment. At SAP, we seek to understand how we can support these companies in achieving their sustainability goals and defining best practices across all industries.”

Sustainability leaders on the move
Most of the organizations participating in the study described loosely defined sustainability commitments and limited connections to internal and external target groups. About two-thirds of the leaders who have sustainability plans say that the scope and vision of the plans are not communicated effectively in the organization or to the outside world.
However, the study identified a small group of leaders – about nine percent – who have embraced and reaped the benefits of sustainability-focused processes. These ‘sustainability leaders’ are characterized by qualities such as setting clear expectations at a strategic level, applying the transformative power of technology and data management and communicating with key audiences such as employees, supply chain partners and policy makers.
“Sustainability leaders are actually implementing sustainability initiatives,” said Edward Cone, editor-in-chief of Oxford Economics. “They communicate with key stakeholders inside and outside the company and use integrated technologies to measure performance in a way that drives accountability.”

Handling core issues

The study by Oxford Economics and SAP provides comprehensive data that provides a broad picture of companies’ efforts for sustainability. The responses highlight the key challenges that companies can focus on to improve their sustainability performance and become a ‘leading’ category. Efforts to solve these problems can be divided into five key areas:

• Start sponsoring the management. Sustainability efforts should start with an explicit plan that is communicated and emphasized throughout the organization.
• Ensure clear, consistent communication. While the sustainability effort starts at the top, the vision must be translated into action by the employees. It is important to connect key teams with clear goals to improve sustainability performance.
• Integrate processes, technologies and data. Most companies have not anchored sustainability in their core strategies. This leads to decoupled technologies that hinder strategic planning and decouple financial and non-financial information. Combining these resources provides insight into progress and results.
• Extend sustainable practices to customers, partners and suppliers. Energy suppliers are an important part of sustainability measures, but more than a third of respondents do not consider the use of sustainable energy suppliers as crucial to their CO2 reduction targets (36 percent). Nor do they make the same demands on their partners that they make on themselves. Sustainability is a team sport that requires participation throughout the supply chain.
• Understand that data is critical. Data collection and analysis provides insight into resources and efficiency. It allows the organization to measure results and alert if improvements are needed. This key area is an area that is ripe for innovation across all sectors.

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