The road to sustainability for brands and businesses is fraught with obstacles—just embracing the concept of the initiative is tough enough as it calls for many industries, such as product packaging, to reinvent their processes from scratch to be true supporters. And as the issue became politicized, an ESG backlash arose that has morphed into a full-on anti-ESG movement, leaving ESG investors vulnerable to financial punishments. Beyond their own perspectives of ethical responsibility, how can businesses justify making sustainability a part of their strategies? New research tracking that logic finds that, indeed, most aren’t.
The new report from IT infrastructure services firm Kyndryl, in collaboration with Microsoft, reveals that while 85 percent of organizations place a high strategic level of importance on achieving their sustainability goals, only 16 percent have integrated sustainability into their strategies and data.
As the world faces an increase in climate-related events and challenges, there is an urgency among businesses to act now using technology to drive sustainable solutions. But while 80 percent of organizations surveyed see great significance in technology’s role to achieve their goals, only 32 percent believe they are making full use of it in their organizations, finds the study survey, conducted by market research firm Ecosystm.
“Many companies are at different stages of sustainability maturity,” said Faith Taylor, chief sustainability and ESG officer at Kyndryl, in a news release. “Companies are applying technology to unlock the full potential of sustainability. They are thinking beyond regulatory compliance to pragmatically execute and advance their sustainability goals.”
“Technology has emerged as a key enabler to sustainability success, and its role will only continue to grow with the advent of more sophisticated AI tools,” said Shelly Blackburn, vice president, cross solutions area at Microsoft, in the release. “We are eager to help drive meaningful change and contribute to a more sustainable future in collaboration with Kyndryl.”
Key highlights of the survey include:
- While CEOs and boards have made sustainability and digital transformation a priority, they need help with integration and execution of their programs to meet their goals.
- 61 percent of organizations use AI to monitor energy use, but only 34 percent use current data to predict future energy consumption.
- Among stakeholders, customers are the most vocal in advocating for sustainability policies and practices, followed by employees, investors and government regulators.
Drivers to building a more sustainable organization
Below are sustainability best practices for driving growth and improving business outcomes:
- Make sustainability a CEO and boardroom priority aligned with finance and technology. Over 50 percent of organizations entrust the CEO and the Board with leadership roles in their sustainability functions. Of those companies that have implemented sustainability for more than 10 years, only 24 percent have full alignment with Finance and 44 percent with Technology.
- Align sustainability with technology modernization. Technology can help to automate, modernize and prioritize sustainability processes and infrastructures. Of the respondents surveyed, 52 percent use automation to improve efficiencies and build sustainable operations, while 48 percent digitize their workplaces to support a hybrid work strategy and 47 percent use technology to reduce the environmental footprint of their organization.
- Build an integrated data foundation. Streamline data management for informed decision-making and successful execution of strategies. A mere 15 percent of organizations have the capability to provide their employees with real-time sustainability dashboards.
- Unleash AI for predictive sustainability. Expand the use of AI beyond reporting to include predictive analytics that assess Scope 3 risks, forecast energy consumption and anticipate potential risks such as natural disasters.
- Empower employees. The study found that 48 percent lack dedicated resources or limited internal expertise, which outlines the need for additional workforce development.
“Faced with record-breaking temperatures and unparalleled climate-related events, this is a moment that calls for collective action from governments, industries, enterprises and individuals alike,” said Ullrich Loeffler, co-founder & CEO of Ecosystm, in the release. “Together with Kyndryl and Microsoft, we are honored to make this study available to forward-thinking organizations everywhere to outline steps they can take today to drive measurable sustainability impact.”
Download the full report here.
The study was conducted among 1,523 technology and sustainability business leaders across 16 countries in Asia, EMEA and the Americas. The survey took place between September – October 2023. The survey was conducted across nine industries and included small to medium as well as global companies.
