The sustainability advantage

Respond­ing to the coro­n­avirus pan­dem­ic may have occu­pied the most atten­tion of boards and exec­u­tives over the last 12 months, but beneath the sur­face anoth­er issue has arisen, which may have longer-term ram­i­fi­ca­tions: sus­tain­abil­i­ty.

Sus­tain­abil­i­ty has moved from being some­thing tucked away in a cor­ner, sep­a­rate from main­stream busi­ness, to being embed­ded at the busi­ness core, both strate­gi­cal­ly and oper­a­tional­ly.

The investor-led envi­ron­men­tal, social and gov­er­nance (ESG) agen­da has part­ly fuelled the finan­cial aspects of this tran­si­tion, but cus­tomers, employ­ees and com­mu­ni­ties have also been a con­sis­tent and loud dri­ving force demand­ing change. Increas­ing­ly, con­sumers want to pur­chase from organ­i­sa­tions that align with their val­ues and with sus­tain­able prac­tices baked in.

Mean­while, the pan­dem­ic has shown the extent to which sup­ply chains can be dis­rupt­ed by exter­nal events. Nat­ur­al dis­as­ters trig­gered through his­toric changes in cli­mate, includ­ing fires, floods and storms, pose an exis­ten­tial threat com­pa­nies can’t ignore.
The rise of sus­tain­abil­i­ty is also being dri­ven by the need to reduce waste across sup­ply chains, requir­ing busi­ness­es to rede­fine prod­uct design, man­u­fac­ture and man­age­ment for reusabil­i­ty and new val­ue cre­ation. And brands must be proac­tive in safe­guard­ing human rights and val­ues, and dri­ving equal­i­ty across their work­force and stake­hold­ers.

“Whether it’s attract­ing invest­ments, keep­ing up with cus­tomer and staff expec­ta­tions, prepar­ing for sup­ply chain dis­rup­tions or fac­tor­ing in new risks, it’s clear sus­tain­abil­i­ty is sim­ply no longer just a nice to have,” says Vivek Bap­at, senior vice pres­i­dent of mar­ket­ing at SAP.

“If you’re not a sus­tain­able busi­ness across your entire val­ue chain, your rep­u­ta­tion, cus­tomer ser­vice, employ­ee engage­ment and sup­ply chain are all at risk. It’s absolute­ly vital and urgent to build resilien­cy, agili­ty and flex­i­bil­i­ty into process­es to future-proof your organ­i­sa­tion.”

Busi­ness­es have tra­di­tion­al­ly focused on the top and bot­tom lines of the prof­it and loss account. But sus­tain­abil­i­ty war­rants a new focus: the green line, inte­grat­ing non-finan­cial met­rics into con­ven­tion­al report­ing. With vis­i­bil­i­ty of this new val­ue met­ric only grow­ing, there is an oppor­tu­ni­ty to make sus­tain­abil­i­ty prof­itable and prof­itabil­i­ty sus­tain­able.

Sus­tain­abil­i­ty is not a des­ti­na­tion, but a jour­ney of three stages, start­ing with mit­i­gat­ing risk and bet­ter prepar­ing for forth­com­ing reg­u­la­tions. This requires data across the busi­ness and val­ue chain to be seam­less­ly brought togeth­er into a sin­gle data-inten­sive, mul­ti-dimen­sion­al net­work, to increase the vis­i­bil­i­ty of mate­r­i­al flow and usage, car­bon emis­sions, and human­i­tar­i­an and social aspects affect­ing the com­mu­ni­ties the organ­i­sa­tion oper­ates in.

Next, the vis­i­bil­i­ty can be con­vert­ed into an organisation’s core busi­ness process­es to unlock new sources of effi­cien­cy and pro­duc­tiv­i­ty. And third­ly, sus­tain­abil­i­ty can catal­yse dif­fer­en­ti­a­tion, busi­ness mod­el inno­va­tion and dis­rup­tive growth.

“There is unprece­dent­ed oppor­tu­ni­ty to cre­ate new prod­ucts and ser­vices for social­ly con­scious con­sumers, while the green line can sub­stan­tial­ly improve the bot­tom line too,” says Bap­at. “This tri­fec­ta allows com­pa­nies to make sus­tain­abil­i­ty prof­itable and, when they are part of the main­stream busi­ness, then prof­itabil­i­ty becomes sus­tain­able.”

Com­pa­nies can’t improve what they can’t mea­sure or report on reg­u­la­to­ry com­pli­ance with­out data. As a soft­ware plat­form behind 88 per cent of the world’s sup­ply chains, touch­ing 77 per cent of finan­cial trans­ac­tion rev­enues, SAP is unique­ly placed to help com­pa­nies bet­ter com­bine and gain insights from finan­cial and non-finan­cial met­rics.
SAP’s sup­port falls in three key areas, start­ing with enabling vis­i­bil­i­ty of dis­ag­gre­gat­ed data for com­pli­ance, ESG report­ing, holis­tic steer­ing and sup­ply chain trans­paren­cy.

per­a­tional excel­lence comes from embed­ding sus­tain­abil­i­ty into the busi­ness core to dri­ve effi­cien­cy and pro­duc­tiv­i­ty. Final­ly, SAP is the IT foun­da­tion for inno­v­a­tive new busi­ness mod­els and val­ue propo­si­tions for cus­tomers, employ­ees and stake­hold­ers.

“Sus­tain­abil­i­ty is the trans­for­ma­tion agen­da for com­pa­nies today,” says Bap­at. “Many are mak­ing bold state­ments about their sus­tain­abil­i­ty objec­tives, but need enabling tech­nolo­gies to make sus­tain­abil­i­ty prof­itable. SAP has the depth, rel­e­vance and reach to help them become the intel­li­gent, sus­tain­able enter­pris­es of tomor­row. Through a com­bi­na­tion of com­pli­ance, oper­a­tional excel­lence, inno­va­tion and growth, best-in-class com­pa­nies will emerge from this to become dom­i­nant forces in their indus­tries.”

For more infor­ma­tion please vis­it SAP.com and attend the vir­tu­al SAP Sus­tain­abil­i­ty Sum­mit April 28–29

Pro­mot­ed by SAP