Customers Are Demanding Sustainable Practices From Businesses In 2023

Businesses want technologies that will help them manage costs, grow revenue, and they want choice in how that technology is deployed

Sustainability has become a top business priority in 2022, from the viewpoints of both firms and customers.

Customers demand to know how goods and services are acquired, produced, and delivered as environmental concerns grow. Customers are becoming more and more interested in doing business with organisations that have high environmental, social, and governance (ESG) standards. Intelligent businesses are rising to the challenge with deeds, not just words.

A No Planet B survey found that in India, people are more prepared to pay extra for goods and services (97%) invest in firms (93%), and work for organisations that can clearly demonstrate the progress they are making on environmental and social issues (94 percent).

According to research, since the supply chain is thought to be responsible for 90% of a company's greenhouse gas emissions, the entire supply chain must be taken into account when measuring a company's environmental effect.

What steps are companies doing to fulfil their ESG obligations?

Unsurprisingly, businesses from a variety of industries claim to take every precaution to make sure that their methods for sourcing, producing, and distributing goods are long-lasting. In actuality, however, many are merely beginning. More than one-third of firms are only executing one of the five "needle-moving" sustainability measures, according to the consulting firm's Deloitte 2022 CXO Sustainability Report.

For instance, 66% of the CXOs polled stated their companies are enhancing energy efficiency, and 67% said their businesses are employing more environmentally friendly materials. However, only 49% of the more than 2,000 CXOs polled stated they are creating new environmentally friendly goods, and only 37% link senior executives' pay to their performance in terms of sustainability and the environment.

Window decoration is insufficient. The supply chain is a problem that businesses must handle to increase their financial health. In addition to producing 90% of a company's greenhouse gas emissions, the EY Supply Chain Sustainability 2022 report states that a company's supply chain also accounts for 50% to 70% of its operational expenses. According to this study, "Organizations are looking for methods to create long-term value by embedding sustainability into supply chain operations, beyond risk avoidance and compliance."

How does Technology assist?

Consumers and business executives are looking to technology to help them advance their ESG mandates. According to the No Planet B poll, 96% of Indian respondents think AI will help businesses achieve their environmental and social goals, and 83% think robots will succeed where people have failed.

Businesses require a complete and real-time picture of their inventory, as well as those of their suppliers and distribution partners, in order to solve the enormous problem of transparency and visibility inside their supply chains. They also need world-class analytics to analyse this data. With these resources at their disposal, they may more effectively begin locating and producing goods nearby, reducing shipping distance and fuel expenditure. They can also fine-tune supply chain planning to reduce the overall environmental consequences of their organisation and better utilise warehousing to anticipate or even avert shortages.

We must acknowledge that no company is an island, which is important. To create an effective and moral supply chain, each party must cooperate with its partners and suppliers.

The widespread adoption of cloud computing can improve the environment in addition to its other advantages. According to IDC, widespread cloud adoption could stop more than 1 billion metric tonnes of carbon dioxide from being released between 2021 and 2024.

One cannot stress the significance of taking effective action on ESG. One reason is that customers desire it. Another reason is that governments are enacting regulations swiftly to make sure that every given company backs up its claims about sustainability with actions (and policies). It ultimately serves as a call to action for companies.

Some of the forward-thinking international and Indian firms working in the manufacturing and logistics sectors, such as Unilever, Tetra pak, Safexpress, and Apollo Tyre, are utilizing technology for practical ESG objectives.

The future for 2023

Businesses that employ smarter technologies to optimize their supply chains and other operations can genuinely claim to have reduced their negative environmental impact and can attach that reputation to their brand. Additionally, shoppers that care about the environment will pay attention.

To summarize, businesses want technologies that will enable them to manage expenses, increase revenue, and they want flexibility in how that technology is deployed as we move into the mid- to late 2020s. It goes without saying that they would give preference to cloud providers who make it easier for them to execute their cloud workloads rather than making it more difficult.

(Source - BW Business World)