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Green investment is "only path" to growth amid economic uncertainty

"Businesses are actually doubling down on [green] investments," said Accenture's Gemma Baker

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"Businesses are actually doubling down on [green] investments," said Accenture's Gemma Baker

Business leaders must look to sustainability for future growth.

For years, consumers and end-users have faced a green premium when it comes to eco-friendly solutions and products. As the costs of living and doing business skyrocket, does the will to pursue green initiatives still exist?

The conclusion of speakers at a roundtable hosted by SAP in London last week was a resounding "Yes!" Far from shying away from the challenge, they said, businesses are more willing than ever to invest in sustainable solutions.

C-suite leaders are now very open to spending on green projects, said Michiele Verhoeven, SAP's MD for the UK & Ireland (though operational-level managers may feel differently). In his opinion, "Companies now want to prioritise sustainability projects higher than growth projects or profitability projects, and so the question is, how do you do both, not either/or?"

The only growth is sustainable growth

Gemma Baker, Sustainability Managing Director at Accenture, pointed out that sustainability and growth are not mutually exclusive:

"The C-suite and the leaders we've come across understand that the only growth is sustainable growth. And we've not seen budgets being cut...I think business leaders have now woken up to the fact that there is only one path. We're starting quite a few large-scale projects with clients; we haven't necessarily seen that impacted...

"[Businesses] are actually doubling down on investments, even if governments around the world are kind of paring back."

It's not just private sector firms, either. Tim Embley, Group Research & Innovation Director at construction company Costain, said, "We've seen public sector clients realise that they have a golden opportunity going forward here... and I think as they start to look at these problems, they recognise that actually putting sustainability at the front and centre of what they're going to procure actually drives a better long-term outcome for society."

According to a report SAP released at the same time as the roundtable, 90% of UK business leaders believe there is a connection between environmental sustainability and long-term profitability; and two-thirds (65%) believe that addressing environmental issues will be material to business results.

But...

Easier said than done

Few business leaders today would say they don't care about the environment - but it's much easier to finding one who criticises environmental regulation.

Green standards play an important part in protecting the planet, mandating certain technologies and processes to follow; but conflicting rules and regulations can make navigating the area a challenge. Stephen Jamieson, SAP's Global Head of Circular Economy Solutions, said, "One of the challenges that businesses have had for so long has been this sort of alphabet soup of regulation and standards and how to get consistent insight and understanding, because one organisation's view on a sustainable product might be different to another."

The single biggest challenge is data

Consistency can be a significant barrier in ESG alignment. Cohesive data is one way to address this challenge, showing what your own company is doing more clearly - but even the data space can suffer from inconsistency.

"The single biggest challenge to operationalising [sustainability] across the board is data," said Baker.

"That data often sits in silos, and...it's very, very varied. There's the physical risk data at an asset level; geospatial data; there's the transition risk data, so looking at your supply chain targets and metrics and carbon emissions...in terms of the glide path to net zero. There's the regulations, which are changing very, very quickly and are difficult to stay up to date with.

"So the amount of data is very disparate, and much of the data is not comparable, which is a massive challenge."

Some companies are now specifically recruiting for a ‘Head of ESG Data' or similar position to handle the facts and figures around green initiatives and regulations. Others are prioritising clear control frameworks to help them align with standards and minimise risk. Whichever approach a company adopts, the need for data controls - and, thus, insights - is clear.

To paraphrase a proverb, the best time to take control of your ESG commitments was 20 years ago; the second-best time is now. The prospect may look daunting, but as Jamieson said: "If we wait for the perfect moment in standards, the opportunity is going to have gone - for the planet, not from a business standpoint."

Green investment is "only path" to growth amid economic uncertainty

Business leaders must look to sustainability for future growth.

Easier said than done

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