The United Nations refers to the 2020s as "the Decade of Action," and continually underscores the importance of accelerating the adoption of sustainable solutions to address our most pressing environmental and economic challenges. This, along with external pressures from regulatory bodies and shareholders, prompts global businesses to make operational changes that ensure they run more sustainably.
Only two years into the Decade of Action, we’re already beginning to see what happens when companies don’t pivot to more sustainable business practices. Customers, employees, and investors increasingly reject those that are laggards in establishing sustainability goals. They turn instead to their more planet-friendly competition — those that design recyclable products, manufacture with ethically sourced or repurposed materials, and deliver products with minimal carbon emissions or waste.
Amid “the Great Resignation” and a volatile economic period, companies can’t afford to lose talent or customers. They must reinvent their business models to be both profitable and sustainable. To achieve this, companies must prioritize their people, the planet, and their profits equally.
As many companies embark on their sustainability journey, here is a five-step action plan to follow:
Establish a Sustainable Business Strategy
It’s imperative that companies make sustainability central to their overall business strategy. To begin the process, business leaders must examine all functions of their network and identify sustainability weaknesses within and outside of their organization. For example, supply chains are a major contributor to waste and environmental hazards. Creating measurable goals to improve a company’s supply chain (e.g., eliminating single-use plastics within the next 18 months), can restore the confidence of customers, investors, employees, and other stakeholders, that the organization is making active strides to become more sustainable.
Embed Sustainable Data into Business Processes and Networks
Once initial goals are set, business leaders must then measure their performance and use data captured across the supply chain to refine their operations. In addition, this data will also help keep companies accountable, as it can be easily shared with suppliers, shareholders, industry associations, regulators, and customers to ensure they are meeting the sustainability goals they’ve set forth.
Manage Carbon and Climate Exposure Throughout the Business
After an initial data capture, business leaders should then make sure they account for and manage climate-related emissions across all parts of their supply chain, which includes suppliers, contract manufacturers, logistics service providers and other trading partners. This is no small feat – a lack of visibility across a company’s supply chain is typically the reason why business leaders struggle to manage the total carbon footprint of products. By employing technology to provide the visibility they need to see across their supply chain, business leaders can then take actions to reduce their company’s end-to-end carbon footprint.
Making changes to the supply chain may seem like a large undertaking, but it will undoubtedly pay off in the long run with a more loyal customer base.
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Embrace Circularity and Become Regenerative
The use of technology can help companies reduce, reuse, recycle and use reclaimed materials to minimize waste and ultimately adopt a circular business model. Accenture projects that by 2030, circular economy strategies powered by digital technologies will present up to $4.5 trillion in new economic growth opportunities for companies.
An example of a company embracing circularity is Colgate-Palmolive. It pledged to use 100% recyclable, reusable, or compostable materials for its consumer packaging by 2025 and also reduce its use of virgin plastic. Technology enables Colgate-Palmolive to access data up and down its supply chain, which has been integral to the ongoing creation of new, sustainable products.
To achieve circularity and become regenerative, companies must design products with their end of life in mind. Business leaders and product designers should ask themselves questions, such as ‘how will the product be refurbished, repurposed, reused or returned to the earth, and ensure that non-biodegradable packaging materials ends up in oceans or a landfills. We can leverage sensors to track which products are causing damage to the atmosphere, and feed that information back into the design process for future products to help meet our corporate commitments.
Prioritize People Across the Supply Chain
When rolling out a sustainable business strategy, companies must have buy-in and support from the entire workforce. This starts with respecting the workforce, creating a diverse and safe space, placing an emphasis on human rights, equality, and providing professional development opportunities for talent, such as training and reskilling programs. Additionally, business leaders have an obligation to establish partnerships with suppliers, contract manufacturers, and logistics providers that share these values.
The prosperity of our environment can’t be restored and ultimately preserved by one organization alone – sustainability is a team effort. This year should serve as an inflection for business leaders just starting their sustainability journey, motivating them to take an active stance. It will likely take society years to make substantial progress, but business leaders taking steps to prioritize their green line just as much as their bottom line will ultimately go a long way in addressing the world’s greatest environmental issues.