Of course, technology alone would not be enough for success, so the CEO must pay similar attention to attracting and retaining talented and dedicated professionals.

CEOs rank sustainability among their top priorities, which they see not only as a business necessity, but also as an opportunity, according to IBM’s global survey. However, the lack of insights obtained from reliable data and the difficulty of measuring the return on investment hinders companies from achieving their green goals.Around half of the CEOs worldwide consider sustainability to be one of the most important priorities of their organization, which is a significant increase compared to the 37 percent measured last year – stated in this year’s study by the IBM Institute for Business Value (CEO study, Own your impact: Practical pathways to transformational sustainability), to which conducted a survey with the participation of more than 3,000 company managers in more than forty countries and 28 industries. However, in this year’s, now 25th, round of the survey, which is repeated annually, more than half of the respondents rank sustainability as one of the biggest challenges of the next three years, primarily the lack of reliable data and analytical insights necessary for decision support, the difficult to demonstrate return on investment, and the necessary transformation of operations due to the complexity of the technology. While almost all of the respondents (95 percent) reported that they had reached at least the pilot project stage with the implementation of the sustainability strategy in their company, less than a quarter of the CEOs (23 percent) could say that they had already put their strategy into practice throughout their organization. All of this gives a clear impression of the seriousness of the obstacles standing in the way of green aspirations. – War, inflation, shortage of professionals and the aftermath of the Covid-19 pandemic, the health crisis, CEOs are doing their work in an unprecedentedly complex environment – said John Granger, senior vice president of IBM Consulting, when the study was published in May. – Despite all these challenges, company managers are not giving up on increasing sustainability, they are increasingly ranking it as one of their top priorities. However, many of them do not sufficiently appreciate the extent to which data and technology can bridge the gap between strategy and tangible results, the impact achieved.

Green driving force

In this year’s IBM survey, 48 percent of CEOs stated that increasing sustainability will be one of their company’s top priorities in the next two to three years – while last year roughly a third of the respondents said the same. There can hardly be any complaints about senior management commitment. Nearly 70 percent of CEOs said that they are directly involved in defining the sustainability strategy in their company. The vast majority of respondents (80 percent) are convinced that investments aimed at increasing sustainability will help their company achieve better business results in five years’ time, and 45 percent believe that sustainable operations will accelerate business expansion.

Although all this points in a positive direction, the change of attitude and the creation of strategies are only the first step, and it is clear from the answers of the CEOs that further progress on this path is hampered by obstacles, while the companies are urged by a wide range of stakeholders to increase their sustainability. Compared to last year’s 32 percent, this year already 51 percent of the respondents classified sustainability as one of the biggest challenges of the next two to three years, including legal regulations and compliance (50 percent), cyber threats (45 percent), transformation of the technological infrastructure (41 percent ) and supply chain disruptions (38 percent) were also ahead of the ranking. CEOs are under the most pressure to increase sustainability from corporate board members (72 percent), investors (57 percent), ecosystem partners (49 percent), regulators (49 percent) and governments (46 percent) – which several circumstances make it difficult. According to almost 60 percent of the respondents, the achievement of sustainability goals is mostly hindered by the fact that it is not clear how the return and business benefits of investments in this direction can be demonstrated. Almost half of the company managers (44-43 percent) mentioned the lack of data necessary to base decisions and the insight that can be gained through their analysis, as well as legal regulations, among the biggest obstacles, but according to more than a third of the respondents (35 percent), increasing sustainability in their company is due to technology it is also hindered by its complexity. Despite all the difficulties, CEOs are not only talking about increasing sustainability, but are actually doing it. According to their answers, their sustainability investments expressed as a percentage of revenue have more than doubled in the last five years. Almost two-thirds of those surveyed (64 percent) are also sure that their company will achieve its goals in this area, and only a fifth of them (20 percent) believe that the sustainability goals announced by the government for their industry cannot be met.

Transformation Action Plan

It has never been more timely for CEOs to treat sustainability as a fundamental aspect of business, IBM pointed out in its study. It is clear that environmentally conscious organizations can expect success in the long term – so now is the time to act. However, increasing sustainability is not easy, if the task were easy, then everyone would have already reached the designated goals. CEOs experience difficulties, yet some of them make real progress and achieve results in this field. One of the secrets of their success is obviously strategy. The authors of the survey pointed out that organizations that clearly define their sustainability strategy, under the guidance of dedicated managers, manage the changing requirements and expectations of legal regulations and stakeholders – investors, partners, customers and consumers in general. From the responses of CEOs who described their investments in more detail along the lines of the relevant questions, the study identified four characteristic approaches to sustainability. Among them, the transformative approach is the most mature, which sees sustainability as a business opportunity, transforms the company’s operation in all aspects – in which it relies on open technologies and innovative partner ecosystems – and rethinks value creation with hybrid cloud, analytical, automation and other advanced solutions. With an operative approach, companies make investments in one area at a time, optimize processes with smart technologies, and primarily try to become more sustainable by increasing the efficiency of operations. Compliance organizations invest in meeting legal requirements for sustainability, and technology is mostly used for monitoring. Although they feel the pressure on them, the companies assessing the situation have not yet implemented investments aimed at sustainability, they see it mainly as the cost, and the delay in the developments is explained by the lack of the necessary technological skills and expertise.

In its study, IBM therefore also outlines an action plan with which companies can start on the path of transformation necessary for sustainability. As a first step, the CEO must take personal responsibility for the development and implementation of the company’s sustainability strategy, and then he must ensure the creation and continuous maintenance of the technological foundations necessary for this – including the foundations necessary for management, coordination, cooperation, joint innovation, agility and data-based decision-making. It is advisable to invest in open, interoperable technologies with which data, software and innovative solutions can be quickly scaled and extended to the organizational level. Of course, technology alone would not be enough for success, so the CEO must pay similar attention to attracting and retaining talented and dedicated professionals, as well as to ensure that they are given an active role in the implementation of sustainability initiatives. All this applies not only to subordinates, but also to middle management level. In a similar spirit, the company should also expand and transform its circle of partners, because by complementing and strengthening each other’s capabilities, they can move faster towards their common sustainability goals. While he is expected to produce results, the CEO can be sure that circumstances will constantly change. The transparent measurement of progress and performance is therefore just as important as setting long-term goals. IBM advises companies to think big and start small, but scale their transformation quickly so that they can convincingly demonstrate the value of sustainability to all stakeholders.Hardware, software, tests, interesting and colorful news from the world of IT by clicking here!

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