Sustainability for 60% Indian businesses is driven by regulatory threat: Study

As a country, this can impact our Gross Domestic Product (GDP) growth and even aggravate our already plummeting poverty rates. India is also the third-largest emitter of CO2 after China and the US. As the country gains power in the world order and becomes one of the fastest growing economies in the world, the next phase of growth has to be planned with sustainability built into its very fabric.

The good news is that the winds of change are coming. Today, sustainability has become a core topic of discussion in boardrooms of businesses transcending industry lines and the general consensus is that sustainability and profitability can co-exist. A recent study by Oxford Economics and SAP (NYSE: SAP), has revealed that Indian businesses today recognise the potential of sustainability to unlock business value, with 62% of companies noting that it is not difficult to be sustainable and profitable at the same time.

“It is a positive sign that Indian organisations believe it is viable to improve profits and protect the environment at the same time,» said Kulmeet Bawa, President and Managing Director, SAP Indian Subcontinent.

The study has also revealed that although the significance of sustainability is well understood, much work remains to be done to ensure sustainability ambition translates into action. The study found that just 17% of respondents have calculated their total organisational carbon input. More importantly, out of the organisations that have acted upon a sustainability strategy, only 7% are receiving significant value from it.

“The use of technology can aid us strategically to assist companies realise real, genuine, and quantifiable business value. At SAP, we are dedicated to enable businesses of all sizes and industries in achieving their sustainability goals,» he further added.

Regulatory compliance is both a key driver and a challenge
But, the major driver for sustainability initiatives remains to be regulation. In the study, about 60% of the respondents from India noted that regulatory mandates are the primary drivers of their sustainability strategies. This aligns with the fact that regulatory compliance (45%) is the major benefit derived, ahead of reduced carbon emissions and increased operational visibility.

While organisations may need to refocus their strategies to achieve greater value from sustainability, an excessive focus on compliance is also not good. The study cited this as the third highest challenge to sustainability success by Indian respondents.

Data is the major gap to going green
Even as access to accurate and insightful data throughout the business value chain is critical to maximising sustainability outcomes, only about just 44% of respondents said they have invested in data analysis to measure sustainability in their business. In another 43% said cases, they were training the staff how to capture sustainability data.

Organisations must move beyond driving transparency for legal compliance to expand sustainable practices throughout industrial business networks and value chains. To do this, they must use technology to gather data, optimise business processes, and make more sustainable business decisions.

The role of leadership is central in driving progress
Business leaders must walk the talk by clearly engaging with key stakeholders like employees, supply chain partners, and policymakers on how to leverage the transformative power of technology and data management to build a more intelligent, sustainable enterprise.

Senior leadership can play a pivotal role in engaging and driving their companies on a sustainable transformation by setting out clear cut paths and goals. Yet only 22% of businesses have incentivised leaders based on sustainability strategy success and only half (52%) say their employees are active participants in their sustainability efforts.

“Sustainability leaders go beyond vision to ensure that sustainability initiatives are acted upon,» said Edward Cone, Editorial Director, Oxford Economics. “They communicate with key constituencies both inside and outside the company, and they use integrated technologies to measure and track performance in a way that drives accountability.»

You can click here to access the full report.

Conclusion
Sustainability directly links to SAP’s purpose of helping the world run better and improving people’s lives. SAP’s efforts are focussed on helping create a sustainable future for the Asia Pacific and Japan region, customers, and society at large by bringing together social, environmental, and economic performance.

SAP has a portfolio of sustainability solutions to help businesses embed operational, experiential, and financial data and insights to drive sustainability at scale. SAP is also working toward becoming carbon neutral in their own operations to 2023, and will be carbon neutral across our value chain – what we call Scope 3 emissions – by 2030. The company in fact, has been consistently ranked top of the Dow Jones Sustainability Index for software companies for the past 15 years.

Disclaimer: This article has been produced on behalf of the brand by HT Brand Studio.

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