Sustainability landscape: Urgency and opportunity
The most recent report from the United Nation’s Intergovernmental Panel on Climate Change (March 2023), calls for deep cuts to planet-heating pollution by moving away from fossil fuels and investing in renewable energy. Only the latest in a series of increasingly urgent warnings, it places businesses under more pressure than ever to reduce their environmental impact. However, implementing sustainability initiatives can be challenging and expensive, especially for small and medium-sized enterprises (SMEs).
There are actions a company can take, starting today, using Business Automation tools, that can help them move towards the goal. Join me for a webcast April 11 - Spring into Action with Business Automation - Creating Business Value in Sustainability, with special guests Jeff Goodhue, Michael Hinds, and George Thomas from ActiveWorx. Register here:
https://ibm.biz/BLWSEp2_Sustainability
It’s good to be sustainable, but only if your claims are attainable: Don’t Greenwash
Customers continue to place more emphasis on sustainability in their buying decisions. Communication about environmental practices takes place across a continuum. At one end is "greenwashing," where misleading sustainability claims are made. Embellishing claims can lead to a short-term boost with stakeholders but create reputational, litigation risks and dissatisfied customers.
Some companies have tried to game the system or profiting off well-intentioned, sustainably minded consumers and investors. The term “greenwashing” has been coined to describe the act of making false or misleading statements about the environmental benefits of their product or practice.
As such, the U.S. Securities and Exchange Commission (SEC) has an important role to play in preserving the integrity of companies’ sustainability standards and as such is proposing an amendment to ESG accountability reporting by publicly traded companies. The new ESG disclosure rules would require listed companies to not only disclose risks that are “reasonably likely to have a material impact on their business, results of operations, or financial condition,” but also “to disclose information about its direct greenhouse gas (GHG) emissions (Scope 1) and indirect emissions from purchased electricity or other forms of energy (Scope 2),” as well as certain types of GHG emissions “from upstream and downstream activities in its value chain [such as from their suppliers] (Scope 3).”
Biggest challenge: Unclear ROI and economic benefits
CEOs identify sustainability as a top 10 strategic business priority and expect technology providers to deliver sustainability benefits through their product and service offerings. However, CEOs are encountering significant obstacles. 57% of CEOs identify difficulty clearly defining and measuring ROI and economic benefits as one of the greatest challenges to achieving sustainability objectives.
Requires balancing sustainability and profitability
Finance department leaders have taken action to reduce the greenhouse gas (GHG) emissions of their own finance department. By putting their own house in order, these groups generate credibility when collaborating on sustainability across the business. They are embedding sustainability into finance operations by actively engaging employees in the development and execution of the sustainability initiatives in the core finance processes—order-to-cash (logistics), procure-to-pay (planning and responsible sourcing), and record-to-report (investment decisions that account for the ESG factors of business). However, beyond ESG reporting, business operations still have an optimization gap in efficiency and growth.
Can Business Automation Help an Organization Achieve Sustainability?
Business Automation solutions, which automate repetitive and time-consuming tasks like data entry, inventory management and customer service, are proven methods for cost-cutting and increasing productivity, but can they also help make a difference in sustainability?
The answer is a resounding yes.
One way that Business Automation can boost sustainability is by reducing waste and improving efficiency. For example, an automated inventory management system can help businesses optimize inventory levels, reducing the amount of inventory that gets wasted. Similarly, an automated production line helps businesses reduce their energy consumption and carbon footprint by optimizing production processes.
Another way that Business Automation can improve sustainability is by improving data collection and analysis. Automated data collection systems can help businesses collect more accurate and comprehensive data on their environmental and social impact. This data can then be used to identify areas for improvement and to track progress towards sustainability goals. Automated analysis tools can also help businesses identify patterns and trends in their data, allowing them to make more informed decisions about their sustainability initiatives.
That’s just a start.
Business Automation can also help businesses improve their communication and engagement with stakeholders. Automated communication tools, such as chatbots and automated email campaigns, can help businesses keep stakeholders informed about their sustainability initiatives and engage them in the process. This helps build trust and loyalty with customers and investors, which can ultimately lead to increased revenue and profitability.
By automating sustainability initiatives to improve their environmental and social performance while also reducing costs and improving efficiency, businesses become more competitive in the market. With all these dire headlines, consumers will only become more environmentally and socially conscious. Organizations that can demonstrate their commitment to sustainability are more likely to attract and retain customers.
By reducing waste, improving data collection and analysis, improving communication and engagement, businesses can achieve their sustainability goals while also improving their bottom line. As the importance of sustainability continues to grow, businesses that embrace Automation will be better positioned to succeed in the long run.
Register for the April 11 webcast and learn more. https://ibm.biz/BLWSEp2_Sustainability
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