Adoption of renewable energy across business facilities can significantly reduce the carbon footprint, especially in process-intensive industries. However, doing so on a global scale can be challenging, especially as renewable energy rates differ across geographies, and suppliers often ask for multi-year capacity commitments. In some industries, businesses have set up their own renewable energy plants by partnering with power companies, whereas others are taking an incremental approach in shifting to renewable energy.
Circular economy is a concept that takes varying forms across industries. However, the overarching principles remain the same: that is, products and by-products of a process re-enter the economy, and are reused to create value, such that value creation comes from the process rather than the addition of more material. For example, leading fashion players like Zara and Hennes and Mauritz are moving to recycled fabrics, and incentivizing consumers to bring their used fabrics to collection points in the store – and rewarding them for it. Such strategies make use of post-consumer recycled content (as opposed to post-industrial recycled content) to minimize the material footprint of operations, while engaging with the buyers along a common cause.
In other industries like telecom, competing organizations are sharing infrastructure to eliminate redundant use of materials and power, and instead, shifting the locus of competition to customer experience and service quality. Yet other companies in the beverage industry are incentivizing consumers to recycle plastic packaging, and aim to introduce zero additional plastic in the value chain in the coming years. The concept of circular economy is a multi-faceted approach to waste, carbon, and materials footprint reduction, and is at the heart of discussions and sustainability transformations today.
Three steps to driving a sustainability transformation
Sustainability transformations are increasingly being strategized in synchronization with digital transformation, and organizations are now introducing new roles like Chief Sustainability Officers that are working closely with CIOs and CTOs to help achieve sustainability goals. Moreover, as regulations demand granular auditability of emissions and consumers ask for sustainability credentials from their favorite brands, digital technologies are playing an instrumental role in facilitating sustainable business models. For organizations looking to embark on a sustainability-driven digital transformation, here are three key steps to get started:
#1 Build a business case for sustainability
Despite all the arguments in favor of sustainability, the senior leaders need to build a solid business case in order to keep such initiatives sustainable on the balance sheets too. As a result, the CSO/CEO must synergize the business-technology roadmap with sustainability undertakings, and identify the gains they expect from each action point on the sustainability agenda. This will help the organization align their sustainability strategy with broader goals and priorities of the organization.
#2 Set measurable targets and activate measurement mechanisms
While there is a well-outlined approach for setting measurable, science-based targets, it is the process of building the requisite measurability and observability that calls for more efforts, investments, and time. Leverage IoT technology and sustainability platforms like Microsoft Cloud for Sustainability, and align these investments to other value-driving initiatives like predictive maintenance, automation, or production forecasting.
“Sustainability is a political choice, not a technical one. It’s not a question of whether we can be sustainable, but whether we choose to be.” – Gary Lawrence
#3 Embark on an incremental RoI approach
Lastly, sustainability strategies seldom meet their end when implemented in a one-off manner – this is because of the scope of alterations and investments that sustainability transformations call for. Implement your sustainability strategy in an incremental manner, such that the deployment of each use case or piece of the puzzle brings tangible benefits to fund other checkpoints on the agenda.
Without sustainability, there is not only no future for businesses, but the planet as a whole. Contrapositively, sustainability is the future of all business – therefore, investing in sustainability transformations early on, can help businesses gain a solid footing in the markets of tomorrow. As digital investments have gained momentum during the pandemic, leaders are directing this momentum to also realize their sustainability undertakings, and most organizations have made leaps of progress, no matter what their industry. Time to transform for sustainability, and to set your business on the path to unhindered success – now, and in the future.