More companies are focusing on sustainability than ever before. Alister Dias, Vice President, Google Cloud Australia and New Zealand, takes a look at how intentions may not be translating into desired outcomes, as well as providing some possible solutions to improve ESG success.
Up against the increasingly adverse effects of climate change, Australians are calling on real action from businesses to reduce their impact on the environment.
With 40% of consumers believing a company’s social and environmental efforts are very or extremely important when purchasing products or services, changing customer attitudes are beginning to impact the bottom line. This mounting public concern over climate action is pushing corporate leaders towards green opportunities to improve sustainability outcomes.
Recent research from The Harris Poll for Google Cloud found Environmental, Societal and Governance (ESG) initiatives are a top priority for global executives, with 80% of 1,500 executives surveyed giving their organizations an above-average grade on sustainability efforts.
But there is a disconnect between this above-average grade and reality.
Despite increased spending and the belief reported by 86% of executives surveyed that their efforts are advancing sustainability, two-thirds question how genuine their organization’s sustainability initiatives are. Further to this, only one-third of organizations have measurement tools in place to quantify their efforts.
While progress is being made, the uncertainty on display begs the question; what is the true impact of these sustainability efforts and what is holding organizations back from converting intention to action?
Barriers including cost, lack of understanding and conflicting business priorities all impact an organization’s ability to execute climate strategy, but the most significant barrier is a lack of investment in the right technology.
Cleaner in the cloud
According to The Harris Poll report, technology innovation is the top area executives believe will have the most impact on addressing sustainability challenges – with 78% citing technology as critical to sustainability efforts.
With cloud computing estimated to save a billion metric tons of CO2 emissions by 2024, transitioning to the cloud is one decision organizations can make to increase sustainability.
Operating in the cloud unlocks sustainability progress in many ways, including increasing visibility over the carbon footprint of company operations through cloud-based products. For example, Google Earth Engine end-to-end sustainable sourcing platform and TraceMark collect supplier data and score suppliers based on their environmental impact. In doing so, businesses are empowered to make greener sourcing and procurement decisions. Other ways in which the cloud furthers sustainability goals include quantifying the environmental impact of exiting physical data centers and migrating into the cloud or reducing the energy use and carbon emissions generated by an organization’s IT function.
By choosing a cloud provider with a proven history of best-in-class sustainability practices, organizations can focus on deploying sustainability solutions that fit their unique use case. For example, Google Cloud, which operates the cleanest cloud in the industry, builds solutions that support organizations across every industry to take immediate action by decarbonizing digital applications and infrastructure.
Businesses are under pressure to set ambitious ESG goals, with climate-related disclosures among the most immediate. The future is now when it comes to implementing digital solutions to achieve these targets and the C-suite is ready.
Driving business results through ESG
At the board level, there is often a misconception that implementing sustainability initiatives is costly. But by deploying the right technology, sustainability efforts do not have to cost the bottom line. Shifting to the cloud can actually positively impact revenue by reducing spend across energy, IT, cybersecurity and more.
A study by the United Nations Global Compact and Accenture found that between 2013 and 2019, companies with consistently high ESG performance enjoyed 4.7x higher operating margins and lower volatility than low ESG performers over the same period.
Leveraging cloud technology can not only help businesses achieve ESG goals but can help to increase innovation and bolster business performance. The impact is apparent and fast, easy to access ESG and sustainability data is more important than ever.
Why measurement matters
An organization’s ability to report on ESG and sustainability efforts is crucial to validating success and being able to accurately measure outcomes will help keep businesses accountable as they convert intent to action.
With The Harris Poll finding that 58% of executives believe their organization overstates sustainability efforts when just one-third of organizations have sustainability measurement tools in place, it is clear businesses don’t quite know how to quantify progress.
In the cloud, organizations can access tools, such as Google Cloud’s Carbon Sense suite of tools, to help measure, report on and reduce carbon emissions and automatically recommend carbon reduction actions.
Leaders are beginning to recognize the role the right of technology can play in setting, achieving and measuring ESG and sustainable practices.
While the issues facing our climate are a challenge, we must act quickly to address and overcome them. By leveraging cloud, the C-suite can significantly accelerate their organization’s journey towards sustainability and a greener future.
