What does sustainability in business mean? Often, companies that are just starting on their sustainability journey think of it in terms of simple, front-line measures such as reducing waste in the office, recycling paper and other materials, or increasing employee involvement in community projects – a popular initiative as that also contributes to employee engagement. But sustainability programmes can and must evolve beyond these tentative surface moves.
People Matters picked up some intensive pointers on how to drive sustainability on a large scale from several Big Tech sustainability leaders who spoke at the Asia Tech x Singapore 2022 conference last week. Focusing specifically on the interplay between digitalisation and green operations, they pointed out some ways in which businesses can drive sustainability while also leveraging it for an additional competitive advantage.
Sustainability, technology, and business go hand in hand
All the tech leaders agreed on a common theme: the relationship between sustainability, technology, and business is a synergistic one. For example, introducing green elements into the traditional digital infrastructure has actually improved the performance of technology, which has in turn improved operational efficiency and reduced cost. The higher capacities and faster speeds of today's hardware, the easier installation of present-day software, and even the progression of storage technology away from mechanical systems to flash memory all owe something to the push for green technology.
“Sustainability definitely accelerates digitalisation,” said Foo Fang Yong, CEO of Huawei International. “Today, a lot of green elements have been integrated into the digital infrastructure in order to reduce wastage and reduce the carbon footprint. That's the reason why we enjoy more powerful systems with higher capacity and faster speed."
"We don't see a conflict between sustainability and digitalisation, but rather something that motivates us to be better and more competitive on a global business scale.”
Other leaders presented empirical evidence underlining how present-day technology supports both sustainability and business performance at the same time. Genevieve Ding, Head of Sustainability Policy Strategy at Amazon Web Services Asia-Pacific and Japan, cited, for example, research showing that just moving work flow and storage from on premise data centres to the cloud can reduce a company's energy use and its associated carbon footprint in Asia Pacific by up to 76%.
It needs to be pushed along the supply chain
Companies can drive sustainability not just internally but across the entire industry ecosystem. They can provide their customers with greener solutions – which will almost always also be more cost-efficient at the level of today's technology – and in the case of larger companies, they can also influence the broader supply chain. This is critical, because estimates indicate that the supply chain enormously affects a company's carbon footprint.
“Procurement plays such an important role in lowering the carbon footprint of a company,” said Susanna Hasenoehrl, Chief Sustainability Officer of SAP Asia Pacific. “For most companies, if we focus just on carbon emissions or greenhouse gas emissions, emissions from their supply chains are up to 11 times higher than their own emissions.”
The biggest obstacle to managing supply chain sustainability, however, is the lack of data – it tends to be very difficult for companies to obtain any reliable or verified sustainability data from their suppliers, not least because supply chains today are so enormous and complex. Hence data transparency, and a level of data sophistication, are critical.
“Handling data on spreadsheets is no longer tenable. We must handle non financial performance data the very same way we handle financial data – it must be derived from the original source and it must be auditable,” Hasenoehrl said. She warned: “Companies have been brought to court for sharing sustainability data that the stakeholders don't believe, or which was not audited.”
Take it to the international level
For large companies that operate on an international, regional, or global basis, it is critical to pay attention to the sustainability aspect of the business. It is both a moral and ethical commitment, and also a necessity due to trade implications. Hasenoehrl pointed out, for example, that companies exporting certain products into the European Union will have to start disclosing carbon emissions beginning next January, and more disclosures may soon be required around the social aspects of the supply chain.
“If you truly want to be a leader, and lead the sustainability change, I think it's very important for you as an organisation to focus on the international standards that are leading the way in terms of decarbonisation of value chains and improving social equality in value chains,” she said.
And just as companies can drive sustainability along their own supply chains, they can drive it across the entire geographies of their operations, leveraging their economic weight and expertise to raise awareness, provide knowledge, and bring in the technology that supports sustainable business.
Huawei CEO Foo observed that for a company like his, which has growing into the ASEAN region for a long time, it is very important to understand the different maturity levels of socio-economic development in the various ASEAN countries, and to understand the enterprises – seldom large – that are integral to the economies.
“It is of utmost importance to empower these communities by equipping them with the right knowledge and awareness to ensure that ASEAN as a whole can have that level of commitment to sustainability,” he said.