David Costa
Global Head of Business Development and New Markets, NTT DATA EMEAL
More from this contributorThe time is now. Consider this a rallying cry to every CEO and business leader: we can protect our planet’s future at the same time as our companies’. To succeed and endure, businesses must radically rethink how they operate, as well as their very purpose as a commercial enterprise. As powerful actors on the world’s stage, companies can make the difference between exuberance or extinction.
The time is now for strong leadership. There’s no debate that action is needed at a global level, in order to sustain life on Earth. We have the knowledge, the technology and the resources to redress the balance, and set the right foundations for future generations. Leaders must step up, demonstrating with their actions instead of (just) their words that they have a genuine desire for positive change.
The time is now to transform to sustainable business. Operating through a triple bottom line framework equates to placing as much emphasis on people (social impact) and planet (environmental concern) as on profit. Crucially, the impact of companies’ sustainability initiatives must be quantified and consistently measured; with the right data, we have a fighting chance of moving the needle on climate change.
Ten years to transform our world
With good reason, sustainability is firmly on the C-suite agenda. Politicians, business leaders, academics, activists and influential figures of all kinds are publicly and loudly declaring their fears, as well as their hopes and ideas, for our collective future.
Simply put, corporations cannot afford to ignore their responsibility with regard to the environment, society and their own governance. But by embracing this responsibility, a considerable and lasting competitive advantage can be gained.
How much of a business priority should sustainability be? The facts are stark: humanity is overspending its ‘biological budget’ every year by 56% (i.e. using 1.56 times more resources than the planet can regenerate), and 1 million animal and plant species are threatened with extinction. Simply put, corporations cannot afford to ignore their responsibility with regard to the environment, society and their own governance (ESG). But by embracing this responsibility, a considerable and lasting competitive advantage can be gained.
Crises can be profound catalysts for change, creating opportunities to gain new perspectives. Businesses that see climate change – and sustainability – not only as a threat but as an opportunity will be best placed to unlock new innovations and ignite unexpected collaborations. There is a prodigious and diverse array of opportunities for businesses to innovate, optimise and profit, within the push for sustainability.
The mindset shift to a different way of doing business
Our deepest values, as a company, are rooted in supporting a harmonious society. That goal is interconnected with the sustainability transformation of our business, and those of our clients: transformation that reimagines products and service to be more circular, rethinks company purpose and vision to consider people and planet in conjunction with profit, and uses data intelligently to accurately measure impact.
Shifting to a sustainable business model means continual growth where impacts on the environment are not only harmless, but in fact beneficial: where companies make a positive contribution to stabilising and restoring natural and human capital, and reducing inequalities. This new perspective requires a shift in mindset: everyone must commit to sustainability – everyone can contribute to it. And through collective action, leading by example and using the right tools and frameworks, we can make the drastic changes needed to safeguard our world.
Sustainability pays off
Sustained competitive advantage can be gained through sustainable practices. Embedding ESG into business models and operations delivers benefits across the board.
From a consumer and brand reputation standpoint, studies show that 66% of consumers are willing to pay more for products from sustainable brands. In a 2017 study, Nielsen found that every generation, from the so-called Silent Generation aged 65+ through to Gen Z, feels it is “extremely or very important that companies implement programs to improve the environment”, with a huge 85% of Millennials caring deeply about corporate sustainability. This crucial aspect of genuine company purpose (beyond making profits) affects the loyalty of employees, and therefore companies’ ability to attract and keep the top talent, too.
Working toward the UN’s 17 Sustainable Development Goals (SDGs) – which offer a global blueprint for organisations to reconfigure themselves for a prosperous future for all – makes business sense: market opportunities related to delivering the SDGs could generate business revenues and savings worth more than $12 trillion by 2030.
Many business leaders already recognise the need to move toward, and the growth opportunities within, a circular economy – the renewable energy market alone is expected to be $2.15 trillion by 2025.
Foundational elements for transforming to a sustainable business model are:
Operational transformation to circularise the production of products and services, reduce costs through better management of resources, and get ahead of coming government regulation. A sustainability strategy is profitable, substantially lowering costs and affecting operating income by as much as 60%. Not only that, but moving to a circular economy could create 6 million jobs by the end of this decade.
Sustainability-driven purpose to motivate and retain staff, build increased loyalty from customers, and de-risk market investment and finance. With Millennials and Generation Z fast becoming the largest consumer and employee demographic, their demand for responsible and environmentally-conscious brands will be unignorable. Three quarters of Millennials, according to a US survey, are changing their habits to reduce their environmental footprint; and a global survey from 2021 shows nearly half of Gen Z are making decisions about employment based on personal ethics.
In 2018, responsible investments accounted for more than $30 trillion. As reported by Boston Consulting Group, the trend is only set to continue when faced with “the mounting evidence that addressing ESG issues does not hurt financial performance. In fact, companies that are proactive on issues such as diversity, climate stabilisation, and consumer responsiveness can deliver substantial financial rewards.”
Product and service innovation to drive new growth in current and new markets, and gain competitive advantage over non-sustainable competitors. Many business leaders already recognise the need to move toward, and the growth opportunities within, a circular economy (the renewable energy market alone is expected to be $2.15 trillion by 2025).
Sustainability transformation, like digital transformation, will offer the greatest advantage to those who have pivoted quickly. Those who act first and fast, adapting to new regulations and the changing expectations of customers and employees, will reap the greatest rewards, becoming more resilient, more cost-efficient and more secure in their reputation and market position.
How to make an impact
At everis, true to the NTT DATA Group’s values, we are on the journey to building a better society, guided by the UN 2030 Agenda and the SDGs. Our vision is to be a company that excels both ethically and emotionally, an ambition that’s codified in our 20/21 Sustainability Report. In particular we focus on diverse talent, responsible technology, and specific propositions in support of the European Green Deal.
As the sixth biggest technology services provider in the world, we have a huge responsibility. From investing in technology for the planet (clean energy and sustainable transportation), to reducing the digital divide (inclusive education) and promoting ethical digital governance (responsible use of AI), we take ESG seriously. Moreover, we help clients and partners through advanced data and analytics to address that essential element: measuring impact.
Through combining the expert knowledge of our sustainability specialists with our technology innovations, our dedicated NTT DATA Green Deal Industry unit helps clients and partners with solutions for the Primary Sector, Sustainable and Smart Cities, Sustainable Mobility, Sustainable and Renewable Energy, and Climate Change and Environment. Green Deal Industry projects we have made an impact with include:
Working with Aena, the world’s leading airport operator by passenger numbers, to develop their renewable energy plan in their airport network in Spain;
Establishing a framework contract with the European Bank for Reconstruction and Development, for the development of sustainable and climate change strategies in cities under the scope of the Bank in Europe, Asia and Africa;
Participating with UNDP in Africa to improve the climate and environmental observatory at the Centre for tropical ecology and climate change (CETAC) in Huambo, Angola;
In partnership with Bankia/Caixa Bank, a major financial institution, and AENOR, a multinational Certification Agency accredited by the UN, developing a Carbon Emissions Trading platform based in blockchain.
The Carbon Emissions Trading platform developed with Bankia/Caixa Bank and AENOR allows promoters of sustainable projects to upload their projects’ information to the registry, triggering an automated validation process that determines whether the project can generate carbon credits. Once a project is validated, the certification agency calculates and verifies the number of credits the project generates per time-period, triggering the automatic generation of the Non-Fungible Tokens which represent the certified emissions, owned and priced by the project promoter, and linked to the promoter company bank account.
The marketplace allows investor companies to access the platform after undergoing a KYC (‘Know Your Customer’) process and purchase generated tokens using their standard bank accounts. If investor companies wish to nullify their carbon footprint, they can do so by uploading their production data to the CO2 footprint calculation module and then trigger the corresponding certification process. Regulators and authorities can trace the generation and further trading of the emissions credits, allowing for strict control of the market, avoidance of unlawful or improper practices, and for future enhancements of the regulation based on analysis of the trading history.
We must break away from the short-termism that has become the norm in corporate strategy. Purpose and operations in organisations now must be genuinely focused on the triple bottom line.
From AI and machine learning to predictive analytics and the Internet of Things, advancements in digital technology are smoothing the transition to a sustainable way of doing business. Sustainability transformation combines the best of digital transformation with purpose and responsibility, and form two sides of the same coin: integrating digital tools into all areas of the organisation is the key to unlocking efficient, sustainable, future-fit business operations.
Leading by example
We must break away from the short-termism that has become the norm in corporate strategy. Purpose and operations in organisations now must be genuinely focused on the triple bottom line in order to fulfil their part in keeping our planet and its habitants safe, happy and healthy.
The catalysts for sustainability transformation are technology and data, without which we are unable to quantify, and learn from, the real-world impacts of our actions. Further, equity must be upheld as the most important principle; achieving the global SDGs is only possible when the future is prosperous for all.
Action is needed now, and every business leader has a crucial role to play in ensuring a better future. But goodwill and good business sense must come from a place of authenticity: effective leaders, those who truly inspire and manifest change, lead by example.
