Climate-related crises, more ambitious governmental targets, changing environmental policies and regulations, and shifts in consumer behaviour and expectations are prompting businesses in every industry vertical to prioritise sustainability.
This is certainly what digital transformation partner Publicis Sapient found when it surveyed high-level executives working at medium to large companies in the agriculture, airlines, energy, manufacturing, midstream, oil and gas, and utilities industries to gain their insights into how sustainability fits into their business strategies, and some of the cost benefits and limitations.
“It’s no surprise that our survey showed most executives are prioritising sustainability as a key corporate goal and factoring it into their strategic decision-making processes,” says Christopher Dann, senior managing director at Publicis Sapient. “For 76 per cent of executives, the primary motivator for developing sustainability goals is social responsibility and the feeling that is the right thing to do, while 62 per cent want to invest to ensure their business can continue to grow, and 43 per cent aim to do it to maintain or improve their company’s public reputation.”
In addition, 96 per cent of respondents believe that improving sustainability practices would be a good long-term business decision and 40 per cent predicted that their earnings would grow by 5-10 per cent if they were to do so. However, they are still hesitant to commit to such investments. In total, 98 per cent of the respondents said they would be unwilling to trade-off more than 0-10 per cent of their earnings, and more than half (58 per cent) said they would not exit a profitable business or divest a profitable asset in the next five years to achieve their sustainability goals.
“Although most executives currently rate sustainability as a top business priority, they also indicated that these goals would likely become less important if they risked losing earnings or if the economic landscape changes,” says Dann. “For example, one in five said that current inflation rates have already prompted them to decrease their sustainability targets. This hesitancy isn’t surprising – organisations must operate profitably to survive and remain competitive, so they don’t want to invest too much in something that they feel may jeopardise their ability to do these two things.”
The survey indicated that 80 per cent of companies are primarily relying on increasing efficiency to achieve their sustainability goals, while 67 per cent plan on lowering energy and manufacturing costs from sustainable sources. This is where the opportunity lies for digital transformation partners like Publicis Sapient to help businesses reach their sustainability goals.
“We must develop solutions that primarily focus on improving efficiency and reducing costs, so they deliver tangible benefits for businesses, whilst also enabling them to simultaneously achieve their sustainability goals and protect their earnings,” says Dann. “Digital technology will be key here.”
Dann cites an example showcasing how Publicis Sapient used digital technology to help one of the world’s largest integrated oil and gas companies successfully implement a decarbonisation strategy that has yielded both environmental and economic benefits.
“Our client didn’t have the analytical tools to aggregate data regarding the carbon footprint across its supply chain or to combine economic data and constraints to gain meaningful insights, so it was struggling to make impactful decisions,” says Dann. “In addition, the process of aggregating and reporting carbon footprint data was an incredibly time consuming and prone to errors. Automating and enhancing this process would mean quicker and unified business decisions and compliance with both internal and ever-evolving international regulations.”
To position the client as a leader in sustainable energy, Publicis Sapient built a Greenhouse Emissions & Energy Efficiency Platform using a highly scalable approach that collects company data from millions of complex assets, including everything from oil compressors to power generators and ships. Publicis Sapient also implemented analytical tools to enable the organisation to identify and report anomalies and pinpoint assets that produce the highest carbon footprint. It also deployed workflow management solutions to democratise, manage and govern the data.
To date, the project has yielded impressive results. Since implementing the platform, the client has reduced its carbon footprint by 35 per cent, saved 38 million British thermal units of energy per year, saved $200 million in annual operational expenditure, and created the opportunity to improve energy efficiency by 4.4 per cent.
“The automated platform now offers faster data delivery and flexible forecasting, saving hundreds of labour hours on the end-to-end reporting process,” says Dann. “This and other data types are integrated to derive important business key performance indicators. Meanwhile, a unified system allows the client to run different types of use cases, such as climate policy studies on the impact to their portfolio and studies involving the marginal cost of abatement of carbon. Plus, it helps the businesses to meet all necessary compliance and regulatory requirements.”
The platform also ensures the organisation stays compliant with evolving regulations by providing alerts when emissions reach regional threshold levels. “The company has also reduced costs thanks to real-time, meaningful data, which it shares with third parties in order to expand its contribution to a healthier environment,” says Dann. “Meanwhile, customers now benefit from having cleaner and less expensive energy. The client has pledged $10 billion to fund similar projects over the next six years and its commitment to its green mission has made local and global headlines, reaffirming its dedication to decarbonisation and strengthening its customer loyalty.”
Read the full survey at: www.psandmicrosoft.com.
This article was originally published in the Autumn 2022 issue of Technology Record. To get future issues delivered directly to your inbox, sign up for a free subscription.