The environmental & economic advantages of sustainability solutions
The environmental & economic advantages of sustainability solutions
Environmental sustainability has become a critical issue for businesses across all sectors and industries worldwide. The 2020 World Economic Forum’s Global Risk Report stated the top five current business risks were linked to environmental challenges such as extreme weather events, human-made environmental damage and disasters, and major biodiversity loss.
As these risks increase, sustainability issues have become vastly more important to investors and financial managers as well as consumers. A recent IBM study found that nearly 60% of consumers surveyed were willing to change their shopping habits to reduce environmental impact.
In turn, businesses today are expected to place strong sustainability programs at the core of their organization’s operational and financial strategies. To address this demand, companies are seeking out sustainability solutions that offer the software and services they need to remain competitive in the marketplace. However, the world of sustainability solutions is wide, so where should organizations begin?
The value of the SDGs
The UN Sustainable Development Goals (SDGs) were created to achieve a prosperous, inclusive, and sustainable society for all by 2030. Adopted by 193 countries in September 2015, the 17 goals include initiatives such as the elimination of poverty and hunger, fighting climate change, supporting decent work, and creating sustainable cities and communities.
According to a 2017 Business & Sustainable Development Commission report, the SDGs could generate US$12 trillion in business savings and revenue across four sectors (energy, cities, food and agriculture, and health and well-being) by 2030 while increasing employment by up to 380 million jobs. The SDGs are not only important for business growth; they’re a key driver for investors and consumers.
The SDGs provide a foundational, strategic framework for businesses to track performance, set goals, and communicate with various stakeholders. By aligning your business strategy with the SDGs, companies can turn global challenges into business opportunities while contributing to a better world.
What are sustainability solutions?
A sustainable solution is long-lasting, capable of being sustained, and is able to be maintained without exhausting natural resources or causing severe ecological damage. Sustainability solutions are designed to enable a better, safer, more interconnected world. As sustainability grows in popularity, the definition of sustainability is expanding as well, giving rise to ESG investing. ESG (Environmental, Social, Governance) goes beyond environmental concerns and includes issues such as product safety, human rights, diversity and inclusion, succession planning, and anti-competitive behavior.
Comprehensive sustainability solutions can support companies through the entire business lifecycle by measuring and identifying a company’s environmental impacts and how those affect investors, consumers, the media, regulators, and other stakeholders.
Here are some examples of the types of sustainability solutions that can support businesses with sustainability planning:
Sustainability management platforms
Comprehensive sustainability management platforms are able to support the entire investment life cycle, from due diligence to exit. Sustainability and ESG software can measure environmental impact, help decrease your carbon footprint, support energy and waste reduction efforts, track and report on internal governance policies and operational practices to reduce risk and uphold compliance, and gather information and report on social issues such as employee safety.
Using data to monitor and track the environmental impact companies have on the natural world helps businesses embrace sustainability efforts while creating change, cutting costs, and boosting long-term profitability. Today’s data allows us to detect sea level change, identify resource usage, track global temperature change, and create future projections. Investors, companies, and governments all must commit to gathering and using big data to support sustainability agendas and ensure humanity can be sustained safely and successfully on our planet.
Benchmarking is a common practice that helps to establish baselines, define industry best practices, identify risks and opportunities, and create a competitive environment within a company or organization. Using multiple key topics such as management practices, sustainable product development, and brand development or ESG factors, this process can yield valuable data that helps companies evaluate and prioritize improvement opportunities as well as support lifecycle assessments and disclosure requirements. One tool that proves essential in solving these data issues is benchmarking. Benchmarking is a process by which data providers define company peer groups, definitions that are crucial in determining the performance ranking of a company.
Sustainability reporting & disclosure
Reporting environmental data can help determine whether or not your sustainability strategies are effective, provide guidance on closing potential gaps, and assess the business value to be gained by addressing risks and opportunities. The competitive benchmarking process also provides stakeholders, investors, customers, and industry peers with access to meaningful, standardized industry comparisons. Holding industries to the same disclosure requirements and moving to a single global reporting standard can ensure sustainability information from companies will be consistent and aligned.
Sustainability consultants are hired advisors and experts who are specifically focused on helping companies create more socially and environmentally responsible business operations. Sustainability consultants can help companies assess sustainability risks and opportunities as well as develop strategies and monitor and evaluate progress that ensure alignment with relevant SDGs.
When combined, these various sustainability solutions can help companies address their unique environmental performance needs by reducing risks, optimizing the company’s environmental footprint along the entire value chain, addressing stakeholder concerns, and successfully meeting sustainability goals.
The benefits of sustainability solutions
Sustainability solutions offer companies the ability to comply with regulations and attain sustainability targets while driving positive sustainability performance and innovation. Sustainability solutions have helped companies:
- Cut greenhouse gases, reduce waste, and educate young people about sustainability.
- Capture and reuse CO2 through purification plants, saving half a million tons of waste emissions that would otherwise be emitted into the atmosphere.
- Incorporate innovative packaging solutions to help global food companies and consumers reduce food waste.
- Promote the circular economy by reusing and repurposing more resources without needing new ones.
Companies from all sectors can utilize sustainability solutions to set clear goals and measure progress, maximize operational efficiency, identify economic and environmental risks and opportunities, achieve the buy-in and recognition from stakeholders, and future-proof operations in order to provide meaningful returns for investors, all while supporting the environment and creating a more sustainable future.
ESG materiality assessments
With investors inquiring more and more frequently about what your company is doing in regard to responsible investment, how you treat employees and vendors, your dedication to sustainability initiatives, and other activities that fall under the ESG umbrella, it’s important to have answers to these questions.
An ESG materiality assessment empowers you to easily report on your current state and outline future initiatives while taking into consideration your business goals and risks. Download our guide to creating and extracting the maximum strategic value from an ESG materiality assessment.