More companies than ever are focusing on sustainability. Alister Dias, Vice President, Google Cloud Australia and New Zealand, takes a look at how intentions may not translate into desired outcomes and suggests some possible solutions to improve ESG success.
Amid the increasingly negative impacts of climate change, Australians are calling for real action from businesses to reduce their impact on the environment.
With 40% of consumers believing that a company’s social and environmental efforts are very or extremely important when purchasing a product or service, changing customer attitudes are beginning to impact the bottom line. This growing public concern about climate action is pushing business leaders to explore green ways to improve sustainability outcomes.
Recent research by The Harris Poll for Google Cloud found that environmental, social and governance (ESG) initiatives are a top priority for global executives, with 80% of 1,500 executives surveyed giving their organizations an above-average score for sustainability efforts .
But there is a discrepancy between this above-average grade and reality.
Despite rising spending and 86% of executives surveyed believing their efforts are driving sustainability, two-thirds question the genuineness of their organization’s sustainability initiatives. Additionally, only a third of companies have measurement tools to quantify their efforts.
As progress is made, the uncertainty that emerges begs the question; What is the true impact of these sustainability efforts and what is preventing organizations from turning intentions into action?
Obstacles such as cost, lack of understanding and conflicting business priorities all affect a company’s ability to execute on a climate strategy, but the biggest obstacle 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 leaders believe will have the greatest impact in addressing sustainability challenges – with 78% citing technology as critical to sustainability efforts.
With cloud computing estimated to save one billion tons of carbon emissions by 2024, moving to the cloud is a choice companies can make to increase sustainability.
Operating in the cloud enables sustainability advances in a number of ways, including improving visibility into the carbon footprint of corporate operations through cloud-based products. For example, Google Earth Engine, the end-to-end sustainable procurement platform, and TraceMark collect supplier data and rank suppliers based on their environmental impact. In this way, companies are empowered to make greener sourcing and sourcing decisions. Other ways the cloud drives sustainability goals include quantifying the environmental impact of abandoning physical data centers and migrating to the cloud, or reducing the energy consumption and carbon emissions caused 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 delivering sustainability solutions that fit their unique use case. For example, Google Cloud, which operates the cleanest cloud in the industry, is developing solutions that help businesses across all industries take immediate action by decarbonizing digital applications and infrastructure.
Companies are under pressure to set ambitious ESG targets, with climate-related disclosures being among the most immediate. The future is now when it comes to implementing digital solutions to achieve these goals, and the C-suite is ready.
Driving business outcomes through ESG
A common misconception at board level is that sustainability initiatives are costly to implement. But by using the right technology, sustainability efforts don’t have to cost the bottom line. Shifting to the cloud can actually have a positive impact on revenue by reducing spend on 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 achieved 4.7 times higher operating margins and lower volatility than companies with low ESG performance over the same period.
Leveraging cloud technology can not only help companies meet ESG goals, but also help drive innovation and improve business performance. The impact is obvious and fast, easily accessible ESG and sustainability data is more important than ever.
Why measurement matters
A company’s ability to report on ESG and sustainability efforts is critical to validating success, and the ability to accurately measure results helps companies hold themselves accountable as they translate intentions into action.
With The Harris Poll finding that 58% of executives believe their organization overvalues sustainability efforts, even though only a third of organizations have used tools to measure sustainability, it’s clear that organizations aren’t quite sure how to quantify progress.
In the cloud, companies can access tools like Google Cloud’s Carbon Sense tool suite to measure, report and reduce carbon emissions and automatically recommend carbon reduction actions.
Leaders are beginning to recognize the role the right to technology can play in defining, achieving and measuring ESG and sustainable practices.
While the issues our climate faces are challenging, we must act quickly to address and overcome them. By leveraging the cloud, the C-Suite can significantly accelerate their organization’s journey toward sustainability and a greener future.
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