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Accenture, an Irish-American technology and consulting firm, analyzed data to best comprehend how companies pursue sustainable practices and in part, it shows that business leaders can struggle to find the balance between clean transitions and staying on the traditional corporate course.
To understand the barriers that hinder sustainable practice adoption, Accenture conducted a study involving 140 World Economic Forum leaders and identified five key issues that prevent companies from incorporating sustainable practices. Those issues included: complexity, cost, speed, reliability, and practicality.
Interestingly, senior executives view sustainability as relatively slow and more unreliable, while perceiving the “business as usual” approach as more complex and costly. This realization creates an opportunity to leverage sustainability as a transformative force rather than a hindrance.
Business leaders face a common dilemma when it comes to embracing sustainability initiatives. While they recognize the potential of sustainability to drive business reinvention, concerns over profitability and trade-offs often hinder their commitment. Accenture’s study attempted to highlight the need for integrating environmental and social impact considerations.
The Trade-Off Myth
A prevailing belief among business executives is that sustainability and profitability are at odds with each other. However, recent studies indicate that 98% of CEOs acknowledge their responsibility to make their businesses more sustainable, despite 58% expressing concerns about the perceived conflict with growth. It is crucial to address these misconceptions and bridge the gap between sustainability and profitability.
To successfully integrate sustainability into corporate decision-making, corporate leaders proposed three updates for businesses to embrace sustainable practices: pervasive purpose, extended horizons, and 360-degree value. In short, these updates suggest that a human-centric approach can best align with a company’s overall purpose. Secondly, by considering long-term viability (horizons), a company can better embrace sustainability initiatives by preparing time to scale.
Lastly, embracing 360-degree value requires broadening the definition of business success beyond financial metrics. Collaborating with stakeholders across the ecosystem and acknowledging the value of sustainable practices in terms of environmental and social impact are vital steps toward achieving sustainable transformation.
Adopting New Decision-Making Norms
While 70% of executives agree with the proposed updates, traditional decision-making norms such as cost minimization and delivering strong quarterly returns still hold significance. The key lies in merging the three new decision-making criteria with the existing norms to unlock sustainable value at scale.
Leveraging Technology for Sustainability
Technology plays a crucial role in facilitating sustainable transformation. By building a robust digital core and leveraging new technologies, businesses can accelerate sustainable innovation.
While technology is essential, embedding sustainability into a company’s culture is equally vital. Empowering employees to become sustainable innovators and fostering a culture of collaboration and continuous improvement can drive meaningful change. This requires providing the necessary training, resources, and support to adopt new processes, technologies, and ways of working.
Accelerating Sustainable Practices
To successfully embed sustainability into business operations, Accenture said that organizations can follow a three-step process. First, the understanding phase involves developing a roadmap for profitable change. This includes conducting a thorough assessment of the current state, defining clear sustainability goals, and identifying the necessary steps for sustainable transformation. The next step is to unlock the organization’s potential by investing in technology solutions and leveraging technologies such as cloud computing, data analytics, digital twins, and other innovative tools to drive sustainability.
Finally, the organization must unleash the power of its talent pool by focusing on building new capabilities. Empowering employees to become sustainable innovators, fostering collaboration, and encouraging the adoption of new processes and technologies aligned with sustainable practices are essential to driving meaningful change and achieving long-term sustainability objectives. By following this three-step process, organizations can accelerate their sustainability transformation and make a positive impact on both their business and the environment.