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Just 16% firms integrate sustainability into corporate strategy – finds Kyndryl and Microsoft study

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sustainability strategies

In recent years, sustainability has evolved from a buzzword to a critical strategic imperative for organizations worldwide. Fueled by changes in legislation, political pledges, and the growing demands of environmentally conscious consumers, businesses are now grappling with the challenge of integrating sustainability into their core strategies. The Global Sustainability Barometer Study, conducted in collaboration with Kyndryl and Microsoft, sheds light on the current state of organizational sustainability, evaluating their efforts across key dimensions: strategy, people and technology.

Here are the top findings from the report.

Strategic intentions are not converting into tangible actions

While an impressive 85% of global organizations acknowledge the strategic importance of establishing sustainability goals, the study uncovers a stark reality – only 16% have successfully integrated sustainability into their corporate and transformation strategies with measurable data. A majority, 59%, set goals primarily for external reporting and compliance obligations, reflecting a gap between intention and execution. Shockingly, 25% have yet to incorporate sustainability into their strategies using concrete data and measurable targets.

Responding to the right drivers

As businesses chart their course towards sustainability in the face of evolving market dynamics, committing to achieving net-zero emissions has become a pivotal goal. Nevertheless, strategic motivations frequently exhibit a short-term orientation. While satisfying the preferences of environmentally-conscious consumers is deemed essential for maintaining competitiveness, it is often considered more significant than meeting regulatory obligations. Concurrently, organizations are acknowledging the dual advantages of adopting sustainable practices, which not only contribute to lowering carbon footprints but also result in substantial cost savings.

Despite these recognitions, there is still a notable gap in fully embracing a strategic approach to sustainability that transcends mere compliance. There is a need for organizations to go beyond the basics and actively leverage sustainability initiatives as a means to secure additional funding and explore untapped market opportunities. The potential benefits extend beyond meeting minimum standards, offering a chance for organizations to position themselves as leaders in driving positive change while reaping economic rewards.

Leveraging technology for a sustainable world

Organizations worldwide acknowledge the critical role of technology in achieving sustainability goals, with 80% recognizing its significance. However, a notable gap exists, as only 32% feel they effectively harness its full potential. Urgent action is required to bridge this divide, aligning technology with sustainability ambitions for informed decision-making and data-backed progress evaluation. Many organizations are now seeking external assistance, with 85% leveraging consulting firms or systems integration services to define and initiate their sustainability journeys.

While technology is predominantly utilized for process automation, its full potential in managing data and reporting within sustainability initiatives remains underexplored. Another finding is the underutilization of predictive analytics in sustainability strategies.

Incorporating predictive analytics into sustainability strategies empowers organizations to make informed, data-driven decisions, reduce risks, enhance resiliency, forecast energy consumption, and improve overall sustainability efforts.

AI in sustainability

Overcoming challenges and implementing best practices

Organizations worldwide face consistent challenges, primarily centered on prioritization, resource allocation, and data acquisition to achieve sustainability objectives. The lack of uniform governance, regulations, and standards exacerbates these challenges.

Essential skills shortage poses another persistent hurdle. Organizations struggle with skills such as a deep understanding of the scientific aspects of sustainability goals, translating sustainability objectives into business advantages, and technological expertise for streamlined sustainability initiatives.

To address these challenges and drive growth, the study recommends several best practices:

  1. CEO and Boardroom Alignment: Make sustainability a priority for the CEO and Board, aligning it with finance and technology. More than 50% of organizations assign leadership roles in sustainability functions to their CEO and Board members. In the case of companies with sustainability initiatives exceeding a decade, only 24% aligned fully with finance and 44% with technology.
  2. Technology Modernization: Align sustainability with technology modernization, using automation to improve efficiencies and digitization to support hybrid work strategies. Among the surveyed respondents, 52% leverage automation for improved processes, while 48% digitize workplaces to support hybrid work strategies, and 47% deploy technology to minimize their organization’s environmental footprint.
  3. Integrated Data Foundation: Build a robust data foundation for informed decision-making, with real-time sustainability dashboards available to employees.
  4. Predictive AI for Sustainability: Unleash AI for predictive analytics, expanding its use beyond reporting to assess risks, forecast energy consumption, and anticipate potential disasters.
  5. Employee Empowerment: Empower employees through dedicated resources and internal expertise, fostering workforce development. The study reveals that 48% lack dedicated resources or internal expertise, underscoring the necessity for additional workforce development to ensure a more comprehensive and successful approach to sustainability.

As the urgency for collective action grows, organizations must recognize the need for clear priorities, collaboration between governments and the private sector, and dedicated resources to accelerate their journeys to a greener future. The commitment to sustainability is now a global priority, signaling a positive shift towards a more sustainable and responsible business landscape.


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