The current generation of corporate leaders will be the first held accountable—not only for the bottom-line, but also for the welfare of our planet. 30 years from now, no one will be able to argue that we did not know how climate change harmed our planet. Businesses currently have the power to deploy innovations to save ourselves from ourselves.
According to a PwC report, 90% of global consumers believe it’s important for companies to adopt Sustainable Development Goals (SDGs) and 78% were more likely to buy from companies that had done so. Consumers are not alone—investors have dramatically increased pressure on organizations to embrace green financial models.
An organization’s profitability and reputation are now at stake, and the world is watching. Global leaders at Davos acknowledged there is a critical gap between the current emissions trajectory and the transformation needed to achieve the commitments in the Paris agreement. To help meet these global goals and ensure corporate resiliency, business leaders will have to prioritize sustainable resource management in 2018 and beyond.
Sustainable resource management answers the following: how can I grow this business forward and stay true to our mission, all while consuming less resources—electricity, natural gas, water, and oil—and limiting our waste generation, to lower our impact on the environment?
The following three drivers are helping CEOs change this trend and lead the sustainability revolution today:
Sustainable resource management: a business imperative
Resource consumption means cost. Thus, sustainable resource management should be top of mind simply because it makes business sense.
Energy costs are rising faster than business revenue. Between 2012 and 2030, electricity costs are expected to rise by 64%, while revenues will only increase by 56%. Further, energy is one of the top three expenses for many industries.
Businesses must embrace new energy strategies, because they not only lower costs, but they also help organizations differentiate themselves in the market. Some big box retailers, for example, are achieving sustained annual reductions of 2.5 to 3.5% by assessing their energy use per square foot of retail space and taking effective measures to drive reductions supporting aggressive sustainability goals.
As more companies demonstrate powerful results and the value of sustainability efforts to corporate stakeholders, environmental responsibility has transformed from a “nice to have” feature to an essential business strategy.
Data: the key to unlocking the right decisions
By 2025, IDC forecasts a tenfold increase in data globally, up to 163 zettabytes. This new level of access to granular resource consumption data and analytics technology enables businesses to understand massive data sets and glean insights to identify opportunities for reductions.
Effective data management and analysis enables us to simplify the complex. Further, data management allows us to centrally monitor what happens locally. And data insights lead to the identification of meaningful projects that allow businesses to transform operations to consume less upfront and generate less waste.
Embrace sustainability, evolve your market strategy
Authentic concern for the environment has replaced corporate greenwashing and is transforming everything from energy markets to employee and customer dynamics. Now, there needs to be a fundamental shift in thinking on sustainability from the heart of business operations and strategy.
Beyond consumption reductions, organizations are adjusting strategies based on stakeholder demands for sustainable operations, products, and services. Clorox embraced the market shift to natural and sustainable products, where consumers will pay premium prices. The company acquired Burt’s Bees and has established a powerful sustainability initiative for 2020.
As business leaders, it’s our responsibility to reduce our carbon footprint—not just for the positive environmental impact but to ensure business resiliency and company growth. Sustainable resource management will thus emerge to become one of the top priorities for every organization. This recalibration of corporate operations, enabled by data analytics, will not only evolve our business routine but will also influence future market strategy. Our future corporate landscape health goes hand-in-hand with the environment.