Sustainability is the new digital. Becoming sustainable as a business is not a matter of ‘if’ but ‘when’. It requires demonstrating a purposeful approach to environmental, social, governance and technology issues, maintaining strong ethical standards, and operating responsibly.
By Sibusiso Dantjie, senior manager: public service at Accenture in Africa
Unfortunately, most corporations in South Africa have been slow to adopt sustainable practices. Many are aiming simply for legal compliance. They typically silo initiatives classified as “sustainability” as social or environmental activities run by the corporate social investment (CSI) department. They are often not considered fundamental to business operations, being bolted on rather than built into core business functions. This approach rarely results in true transformation.
While this narrow focus may address some sustainability issues, it highlights that these organisations don’t fully understand the issues around sustainability. More importantly, they fail to grasp how it can create value for the environment, communities, and the organisation itself.
What value is at stake?
Many businesspeople believe sustainability conflicts with, rather than contributes to profitability – yet the numbers prove otherwise. On average, traditionally leading organisations returned 93% in stock value over the period 2010-2015. Sustainability-focused companies outperformed them, growing 153% over the same period (and 225% if you include Tesla). The adoption of sustainable practices contributes to the following:
- Better economic performance. Sustainability boosts the bottom line by allowing innovative ways to reduce the firm’s consumption of materials and naturally decreasing operating costs. Embedding sustainable practices can also drive sales, help avoid penalties and losses, and open up new revenue opportunities.
- Brand and reputation management: Consumers increasingly care about the environment and the impact of their buying decisions.
- Competitive advantage: Sustainability goes a long way toward helping the firm attract top talent and gain access to funding.
CIOs should lead in shaping sustainability
There already exists an imperative to use technology more sustainably and also as a vehicle to enable greater sustainability. But business leaders could not consider the long-term sustainability of their organisations, and few are innovating on this front. However, with a bit of ingenuity, existing technologies can create a sustainable business model that spans all business functions. The technology stack is a critical factor in how the business operates. It is why the CIO is in a unique position to lead the organisation – and society – through the current disruptions and toward new, innovative avenues of sustainable growth.
CIOs have a combination of technology expertise and a keen understanding of the business strategy. CIOs were at the forefront of response efforts in the early days of COVID-19. At the same time, as maintaining operations, they had to manage the rapid adoption of technologies like cloud, analytics, artificial intelligence (AI) and ensure that employees had the means to continue working from home. It has given them experience and insights that no one else in the C-suite has and invaluable as they seek to build resilience and drive sustainable growth.
Immediate steps CIOs can take to help drive sustainable growth include:
- Reassess the organisation’s financial situation. CIOs need to check the financial health of their technology budget and benchmark their spending against those of close industry peers and leading technology companies. CIOs should collaborate with their CFO to measure and articulate the business value that technology is driving.
- Transform the IT operating model, orienting it to products, services and experiences. CIOs can design and align it with its business model, which can help embed sustainability practices, culture and agile ways of working.
- Choose one or two business or functional areas where you can double down on innovation ideas. CIOs should pilot the identified digital initiatives with targeted functional areas or business leads and collect success stories early on. It will allow them to demonstrate their value to the organisation.
- Promote technology across your enterprise to help transform its culture. CIOs should use their understanding of the business and technology landscape to expand the pilot of digital capabilities in areas experiencing rapid growth or under pressure to perform or react to changing market conditions.
- Be the champion of digital fluency across your company. CIOs should work with training and HR teams to drive digital fluency across the enterprise and advocate a culture change. Upskill and reskill employees in IT and business functions to use automation, AI, digital tools, data, and operating practices like DevOps and Agile.
There is value at the intersection of digital technology and sustainability. Businesses will need to focus on digital technology and sustainability to capture this value. Coupling technology with strategies to become more sustainable will be vital in driving growth and longevity for any organisation. There is certainly no need to choose between sustainability and .profitability