New research from Oxford Economics and SAP says the evidence is clear that sustainability drives business success, but work remains to be done to ensure sustainability ambition translates into action.
Indian businesses today recognise the potential of sustainability to unlock business value and as many as 62 percent of companies believe it’s not difficult to be sustainable and profitable at the same time, a new survey has found. New research from Oxford Economics and SAP says that sustainability is at a turning point. Though the significance of sustainability is well understood, much work remains to be done to ensure the sustainability ambition translates into action, it said.
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“The evidence is clear: sustainability drives business success…Success depends on reaching across business ecosystems to include suppliers, regulators, employees, and board leadership in sustainability efforts,” the report said.
“It’s a positive sign that Indian organisations believe it is viable to improve profits and protect the environment at the same time,” said Kulmeet Bawa, President and Managing Director, SAP Indian Subcontinent. He added that the use of technology can aid in strategically assisting companies realise genuine and quantifiable business value.
Oxford Economics and SAP’s study has found that just 17 percent of respondents have calculated their total organisational carbon input. However, out of the businesses that have acted upon such a strategy, only 7 percent are receiving significant value from it.
Though the study's data did not directly attribute overall financial results to closing the green gap, it said 'sustainability leaders' do witness robust bottom lines. "These companies are substantially more likely than others surveyed to experience profit margins in excess of 10 percent," the global report said.
For the global study, nearly 2,000 executives were surveyed who said sustainability is widely recognised as driving efficiency, building brand reputation, meeting the expectations of modern consumers and employees, and driving profitability.
Regulatory compliance — key driver and challenge
Sixty percent of the Indian respondents see regulatory mandates as the primary drivers of sustainability strategies. “This aligns with the fact that regulatory compliance (45 percent) is the major benefit derived ahead of reduced carbon emissions and increased operational visibility,” the report said.
Also Read: India Inc’s march towards sustainable growth
It highlighted the need for companies to refocus strategies to achieve greater value from sustainability.
However, at the same time, too much focus on compliance was cited as the third highest challenge to sustainability success by Indian respondents.
How companies can make progress on sustainability
The study has found that senior leadership can play a pivotal role in engaging and driving firms on a sustainable transformation path; but only 22 percent of businesses have incentivised leaders based on sustainability strategy success while only half (52 percent) say their employees are active participants in their sustainability efforts.
The study advises business leaders to actively engage with employees, supply chain partners, and policymakers on how to leverage technology and data management to be a more intelligent, sustainable enterprise.