While many organizations have established environmental, social and governance (ESG) goals and made ESG commitments, driven by purpose and emerging regulatory requirements, they face several challenges when making the transition from ambition to action.
A recent IBM study found that global executives cite inadequate data (41%) as the biggest obstacle to their ESG progress, followed by regulatory barriers (39%), inconsistent standards (37%) and inadequate skills (36%). The impacts of data challenges are becoming visible to company stakeholders, with consumers making purchasing — and even employment — decisions based on a company’s progress toward their ESG goals.
Those who have committed to closing the green gap have embraced sustainability-focused processes and are reaping the benefits. If data is a key barrier to success, then companies should consider implementing an environmental strategy that encompasses an all-in organizational commitment to specific targeted outcomes and leverages technology to accelerate and track progress.
Another recent study from the IBM Institute for Business Value (IBV) and SAP surveyed 2,125 senior executives involved in their organizations’ environmental sustainability strategies. The study yielded a surprising result: organizations that outperform their competition in both environmental and financial outcomes also boast the most deeply engaged enterprise resource planning (ERP) system.
ERP is the technology of record, touching virtually every organizational business process. It can connect financial and environmental goals, keeping metrics accountable and accessible. When implemented in conjunction with other systems, ERP enables cost transparency and visibility—allowing environmental, regulatory and business-critical decisions to be made with improved consistency and reliability.
An organization’s sustainability data can be difficult to attain due to siloed business processes, unreliable data and misaligned business priorities. ERP uncovers real-time material information across business functions and gets necessary data into the hands of corporate decision makers and operators for a streamlined user experience. This newfound access to data gives businesses the capability to record, report and act on enterprise wide ESG commitments and help resolve many of the complex challenges and demands of sustainability. With this visibility, people can see the impact of their decisions and trust the results being reported, which can accelerate the cultural change needed to support and accelerate overall sustainable business transformation.
While moving the needle on making progress toward ESG goals can seem nearly impossible for some, there are organizations that have managed to crack the code to greener success. The IBM and SAP study mentioned above found a group of high achieving business leaders (15%)—the Environmental Sustainability Enabled (Enabled)—that actively prioritize environmental sustainability and implement concrete, well-publicized plans to achieve goals at a far higher rate than their peers. The study found that Enabled organizations place environmental sustainability on par with financial performance because they see sustainability fueling financial results.
The recent study also found that the Enabled rely on ERP data structures to address sustainability goals, among other standout findings, including:
All organizations should take note: in an interwoven economy, ERP can help populate and standardize shared sustainability initiatives.
Sustainability and ERP are team sports acting on actuals, and no one team can achieve success on its own. As strategic partners for S/4HANA and SAP Sustainability solutions, IBM and SAP bring together technologies and services with enterprise-scale platforms to help companies break down silos and embed solutions across critical business functions and operations. Sustainability continues to be a business imperative and the pressure to change business process will only continue to increase.
Read the full study to learn how we are helping clients leverage ERP to operationalize sustainability. SAP and IBM understand how to help companies move the needle on their ESG commitments, without sacrificing their business needs or profitability.
Learn more about Sustainability Solutions, Software & Services | SAP
The post How ERP is breaking down silos and driving sustainable change appeared first on IBM Blog.
One of the significant challenges statisticians and data scientists face is multicollinearity, particularly its most…
Artificial intelligence is not just altering the way we interact with technology; it’s reshaping the…
This post was co-written with Mickey Alon from Vidmob. Generative artificial intelligence (AI) can be…
Prompt Poet allows you to ground LLM-generated responses to a real-world data context, opening up…
NASA has three more operational Starliner missions on the books. It hasn't decided whether it…
When training a machine learning model, you may sometimes work with datasets with a large…