Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members

The COP27 in Sharm el-Sheikh has put a sharp focus on the gap between Sustainability ambition and action of business enterprises. According to a survey by leading technology and consulting firm IBM, 53% of organisations view sustainability as their top priority for the next few years, while for 39% it is a priority now. However, despite the clear priority and bold ambition of businesses, there is too little action.

Arun Biswas, Managing Partner for Sustainability Consulting at IBM Consulting Asia-Pacific, is of the opinion that while most companies, 86% of them, have a sustainability strategy, only 35% have taken action. While many have committed to achieving net-zero emissions by 2050, most plans lack specificity. There are few active or effective coalitions that can collectively have a greater impact than any one organization on its own. And even if net-zero targets are achieved, they may be too little, too late.

Why are firms not acting?

The IBM survey identified five key barriers to implementing an organization’s sustainability vision – the first being dealing with uncertainties. 57% of companies believe that unclear ROI and economic benefits are the key barriers to achieving sustainability objectives.

Arun Biswas, Managing Partner for Sustainability Consulting at IBM Consulting Asia-Pacific

Next, most companies are not getting the right kind of data and insights, due to lack of technology infrastructure and skills.

The third impediment is regulation and policy. Companies must deal with a large number of standards and frameworks, both mandatory and voluntary. This doubles if a company operates in multiple jurisdictions. Additionally, regulators in Asia are yet to create an infrastructure to support these firms.

The fourth barrier is the availability of the right technology solutions. Many technology solutions, especially in hard to abate sectors such as steel, cement, plastics, and heavy transportation are either not mature or are not yet affordable.

The fifth key challenge is the need for collaboration. Companies must look at their end-to-end value chain, to collaborate with their customers, suppliers, and stakeholders to drive many of these changes, and this is not easy.

What will it take to turn ambition to action?

Here are five steps organizations can take today to reframe their sustainability strategies and make bigger strides toward solving the complex problem of climate change.

The first is a mindset shift. Sustainability needs to be viewed as a business opportunity and a strategic investment rather than an expense and a compliance action.

Second, CEOs must develop a data and technology foundation for sustainability initiatives. Digital technology can give leaders the data they need to set a path toward sustainable transformation—as well as the tools to make that journey possible. Technologies such as AI, cloud, and blockchain can help organizations access the data and insights needed to inform sustainable operations and inspire innovation. Advanced data management capabilities, fuelled by open standards and interoperability, play a big part in helping leaders improve sustainability outcomes.

Firms must also drive changes to business processes with data and insights and prioritise processes which increase efficiency impact and reduce emissions.

Next, organizations need to make sustainability a more direct and collective responsibility across the C-suite. Assigning responsibility for sustainability to a single individual–whether it is a Chief Sustainability Officer or another leader–won’t inspire the wholesale enterprise transformation most organizations must undergo to achieve their goals.

Finally, companies must look at their entire value chain and engage ecosystem partners to jointly develop and implement sustainability roadmaps.

As the Earth’s environment becomes more unforgiving, the window for action is fast closing. The good news for business leaders is that there are many pathways and examples that they can now emulate to close the ambition vs. action gap.

Authored by

Arun Biswas, Managing Partner for Sustainability Consulting at IBM Consulting Asia-Pacific

Edited by: Queenie Nair

Disclaimer: The views expressed in this article are those of the author and do not necessarily reflect the views of the Economic Times – ET Edge Insights, its management, or its members