Our three guiding principles to unlocking sustainability success
Article｜2023-10-16
6 minute read
Businesses will only succeed in their Sustainability Transformation journeys if they embrace collaboration and company-wide alignment, says Valérie Oosterhoff, Partner Development Director at Fujitsu.
Legislation such as the EU’s Corporate Sustainability Reporting Directive (CSRD), Japan’s Green Transformation Policy and the U.S.’s Inflation Reduction Act will force organizations to report formally on a range of environmental, social and governance (ESG) metrics. This will include reporting the extent to which operations and investment decisions impact climate change, social issues, cyber security resilience, employee wellbeing and diversity on company boards.
This presents an opportunity for businesses to make positive changes beyond compliance. Legislation is a critical factor in these changes, but businesses are also facing pressure from customers and the increasing likelihood of climate change affecting business operations.
“The need for adaptation, such as being able to deal with natural disasters and geopolitical challenges impacting the supply chain, is a huge driver of Sustainability Transformation.”
Most organizations understand the urgency to adapt their operations to become more sustainable and to help improve the wellbeing of the individuals they engage with. But many business leaders are grappling with implementation issues.
Our experience shows that the businesses that can align sustainability goals with broader business initiatives and tap into a credible ecosystem of partners will have a clear advantage over their peers. Not only are they more likely to comply with new reporting guidelines, they can also elevate their organization to new levels of commercial success.
There are three guiding principles organizations should follow in their Sustainability Transformation journeys.
1. Enhance data management to align Sustainability Transformation with wider business activities
When companies align Sustainability Transformation, digital transformation and business strategy, responsibility for all three is shared across business departments. But in reality, inefficiencies in ESG data handling often complicate how sustainability initiatives integrate with wider business activities. This fragmentation can hold back progress toward sustainability goals.
Clearer global requirements have given companies a better idea of which data they should be collecting, but this is often gathered manually via spreadsheets, which comes with the risk of human error. On top of this, the responsibility for capturing ESG data often lies with a small group of individuals who, with limited resources, find it difficult to efficiently gather data.
To improve alignment between sustainability initiatives and the wider business, companies could use exercises such as data-mapping audits to diagnose ESG data bottlenecks. Automated systems that make data more shareable between business units and using external expertise can boost efficiency and data credibility.
Get this right, and employees will no longer see sustainability as a siloed initiative. Departments across the organization will notice positive returns from sustainability efforts and be encouraged to contribute. This will create a virtuous circle, accelerating the transformation process as enthusiasm builds.
“When sustainability transformation is brought together with company strategy, materiality and IT then you have a wider representation of your company working to tackle ESG challenges.”
2. Invest carefully in tools and technologies
To link digital transformation with sustainability efforts, companies should consider which technologies they need to achieve their ESG goals. Acquiring additional tools is not always necessary. Fundamentally, sustainability is about being more resourceful with what you already have.
“Companies should look at how they could use their existing digital tools more efficiently. Tech stack assessments that tap into your internal expertise as well as the expertise of your partners can reveal which tools to integrate and which to remove.”
Here, I highlight several digital technologies that can help to meet sustainability objectives:
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Firms should ensure they have the right ERP system to manage the increased complexity of new reporting requirements.
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Reporting on sustainability metrics often requires analysis of vast and complex data sets, including unstructured data. AI will be critical to extracting relevant insights.
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Distributed ledger technology can underpin a solution to track the data related to the environmental impact or other value chain parameters with greater transparency and integrity, by, for instance, providing trusted audit trail of the product's provenance.
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The internet of things enables sensors to gather real-time data on the environmental impact of manufacturing or logistics processes for instance, highlighting opportunities to reduce energy use and emissions.
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Cyber security platforms enable businesses to consolidate and share their data without fear of a breach, and help to prevent cyber attacks.
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Underpinning the above are advanced network technologies such as 6G, 5G networks, which make it possible to run many processes simultaneously at high speeds while providing greater flexibility around connecting distributed IT infrastructures.
3. Drive Sustainability Transformation through partner ecosystems
Creating a partner ecosystem is increasingly important for meeting sustainability objectives. Our client Botanical Water Technologies is considered to be an essential partner for many companies that are striving to achieve water stewardship goals.
Systems from Botanical Water Technologies help food manufacturers harvest purified water from the wastewater generated by their production processes. This purified water can then be securely distributed to areas with poor water supply using our distributed ledger-based water trading platform.
We embarked on a similar supply chain transparency project with tex.tracer. By scanning a QR code on an item of tex.tracer clothing, our technology shows customers everything from precise origin to where labor was sourced and which dyes and materials the company uses.
As well as helping our customers with their projects, the ecosystem is about sharing expertise. ESG covers a wide spectrum, we therefore work with a wide range of partners, including the likes of Microsoft, SAP, AWS and ServiceNow, to address specific sustainability goals for our customers together.
Rather than building an overcrowded partner ecosystem, companies should create a manageable group that has strong synergy between members. However, this level of selectivity can slow down the ecosystem-building process. Connecting with businesses that are already part of a flourishing ecosystem can help to prevent delays.
How to create business growth through Sustainability Transformation
New corporate reporting legislation is increasing the pressure around sustainability responsibilities, but it also gives companies an opportunity to exceed the expectations of customers and employees. Companies embarking on transformation should embrace these three viewpoints:
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Stop thinking of sustainability as separate from digital transformation and the overall business strategy. When working with our customers, we review their business priorities and figure out how we can support their sustainable digital transformation.
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Include people from different parts of the organization in your sustainability initiatives. The greater the number of people that share the goal, the more closely it will align with the overarching company strategy and your digital and Sustainability Transformation goals.
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Making progress on ESG increasingly depends on collaboration. Forming agile ecosystems with suppliers and customers gives firms access to a wider range of data and solutions with which to support Sustainability Transformation.
For many organizations, new legislation will shine a light on the aspects of their ESG performance that require work. Using this insight, leaders can create a roadmap that prioritizes challenges and sets out how emerging technologies can pave the way to a more sustainable future.
Visit the Fujitsu Uvance hub to learn how to enhance your company’s Sustainability Transformation roadmap.
Valérie Oosterhoff
Partner Development Director, Fujitsu
From her early career with the likes of Unisys and Next Computer, Valérie Oosterhoff has been at the leading edge of the latest technologies and business priorities in IT. In addition to leading multinational software sales teams at Peregine, she has run some of Fujitsu’s largest global retail client engagements with McDonalds and M&S.
After a specialization in outsourcing and IT managed services, Valérie has developed some of Fujitsu’s most valuable partner relationships and is now responsible for its Sustainability strategy and go-to-market programs.
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