IBM Research Examines Corporate Environmental Sustainability

The research highlights how companies can develop sustainability strategies that will support profitability

Executives are walking a thin line, attempting to balance the long-term aim of preserving the planet with the immediate need to preserve money. They must balance the future expenses of inaction against the current profitability of maintaining the status quo while navigating a world characterized by turmoil and change.

Companies in various industries have changed their business models to build a sustainable future to one that protects people, the environment, and money. On a swiftly heating planet, businesses from all sectors are changing their strategies to ensure a long-term future. Individuals only carry out their part. Companies can't do it alone. Consumers also have a role to play. How much they are prepared to pay defines, in part, how far firms can go.

"Consumer respondents have signaled they're willing to commit personal resources and give up conveniences to protect the planet, and we're finally seeing their aspirations and actions merge," said Sheri Hinish, global lead, IBM Consulting Sustainability Services.  "But they need businesses to help break down the persistent barriers that are impeding them from making the most sustainable choices possible." 

Environmental sustainability has become a worldwide priority. Consumers are taking notice and demanding change as governments' new ESG rules intensify and as investors advocate for companies to improve the transparency of environmental and social governance procedures. The impact of climate change has grown more severe, and people's efforts to live and work more sustainably are resulting in significant changes in behavior with regard to how we work, buy, and choose in everyday purchases.

According to IBM's study, the level of consumers' actions indicates their commitment to action. They are prepared to modify their family practices, spend more money, transfer jobs, and adjust their investment portfolios to live according to their sustainability principles. Consumers require assistance from businesses to make the most sustainable decisions possible.

Customers today demand sustainability

Over half of respondents (51 percent) in a worldwide poll said environmental sustainability is more essential to them today than it was a year ago.

Sustainability is a major consideration for the majority of people, with 77 percent stating that they want to make more sustainable choices at home. The majority of respondents said they paid more for socially responsible branded items, with an average increase of 59 percent. Sixty-two percent of personal investors say their portfolio reflects an interest in environmental sustainability. These findings indicate that sustainability is a business advantage.

The findings of IBM research prove that purpose may provide sustainability-driven businesses an advantage in the job market. The majority of respondents say that they are now more eager to apply for and accept employment from companies that are considered environmentally responsible. However, only 21 percent of survey respondents think their current employers are long-term viable, which might indicate a significant risk. Around one in three of those who changed jobs last year took a lower wage to work for sustainable or socially responsible businesses, and 35 percent accepted a position with an employer they consider environmentally friendly.

Employees are making value-based sacrifices in order to improve the world, and organizations that purchase from and employ such people should also do so.

Companies can help customers make sustainable lifestyle choices

Corporations must break down the walls to meet this dramatic rise in customer, investor, and employee demand. Enhancing communications, as well as increasing transparency, and communicating progress toward sustainability goals are all essential tangible steps.

Companies must embrace a circular economy as well. Customers should be educated on how to use, recycle, or recover items and packaging. Companies may utilize renewable energy, recycled materials, and re-engineered packaging for product design and development.

Sustainable businesses are offering incentives for customers to lower their carbon emissions. Analytics is being used by businesses to enhance efficiency while reducing carbon emissions and waste. Sustainability analytics can help companies understand the cost, impact, and performance of their past and present sustainability initiatives—and anticipate future conditions and requirements—helping them unlock hidden value and build a more resilient enterprise. Any cost savings realized can then be passed on to consumers. Companies may also use this opportunity to boost collaboration and demand more stringent environmental goals and actions throughout the supply chain.

There are several nonprofit organizations and business coalitions that may provide valuable resources to businesses interested in becoming more sustainable. IBM is currently collaborating with the World Business Council for Sustainable Development (WBCSD) and the Partnership for Carbon Transparency (PACT) to assist businesses in better identifying, measuring, and tracking Scope 3 emissions as well as utilizing technology to reduce carbon releases.

Consumers are seeking for companies to be real change stewards who lead with purpose and for this commitment to be demonstrated in long-term choices. Executive leaders may do far more to establish a long-term sustainable future by establishing a viable path to responsible.