Australia lags the global field when it comes to a greener enterprise. By embracing four key areas for strategic transformation, local leaders will quickly catch their international peers.
Green is no longer a buzzword. Now an essential ingredient for every business that wants to build long-term viability, Australian organisations are unfortunately behind the global maturity curve. But we see a clear path to catch up to international peers.
Cognizant worked with Oxford Economics on a survey of 3,000 executives across 16 regions and 11 industries to understand the state of sustainability in the enterprise. You can download the full report here. With 250 of the participants from Australia, we identified four key areas where Australian business should focus to improve their approach to sustainability: strategy, power, structure, culture and data.
Align sustainability and business strategy
Less than half of Australian respondents agreed that environmental strategy was fully integrated with business strategy. It is common for sustainability strategies to be disconnected in this way, and we see echoes of the early digital era when digital lived separately from core business strategy.
Until there is full integration, businesses will fail to identify and leverage the opportunities associated with innovation that is being driven by modernisation aligned with sustainability practices. We advise companies to unite their sustainability and corporate strategies, starting with the board of directors and other top executives on the merits of doing so.
Rebalance power structures
For these sustainability strategies to take hold, senior leadership must have clear accountability for meeting sustainability goals. What’s more, those with responsibility for sustainability targets must also be empowered to make the bold decisions and disruptive changes required.
Again, survey results see less than half of Australian respondents saying that organisational structure has been adapted to improve sustainability performance. Australian CEOs were 8% more likely than the global average to be responsible for sign-off on sustainability plans while not being directly accountable, while Australian sustainability leaders were 8% less likely to be responsible for sign off.
The pressure is on sustainability leaders to deliver outcomes, and yet they are rarely empowered to have a seat at the strategy and budget table. Leadership models need to evolve, and by striking the right balance in distributing responsibilities and accountability, businesses can improve the quality of their sustainability outcomes.
Underpinning all of this is the general state of Australia’s ESG regulatory system. Because Australian organisations are not compelled to comply with a mandatory set of regulations, the leadership model has had no reason to evolve. Is it time for a regulatory rethink on the requirement for transparency on climate action?
Nurture a culture of sustainability
Alongside structural adjustments in the C-suite, a wider culture of sustainability is essential for employees to take the environmental mission seriously in the business decisions they make.
Most Australian corporate leaders agree they have a strong culture of environmental sustainability within their company and that employees are aware of sustainability efforts. But awareness needs to be transformed into clear, actionable guidance to become a true culture of sustainability. Australia is lacking in this regard, as it is less inclined than the global average to have established codes of conduct for positive environmental behaviours, as well as a lack of incentives for employees to take personal action.
The entire workforce needs to share responsibility for realising sustainability goals and be motivated to meet them. While sustainability ambassadors are vital, it will take a wide array of people in the organisation to build, share and monitor baselines, targets and plans.
Get your data analytics in place
Compared with the rest of the world, Australian businesses give the least weight to data analysis, reporting and performance management as essential components when implementing sustainability strategies. However, data and analytics are a logical starting point for businesses to improve their strategic outlook.
Getting measurement right is a critical step on the journey to understanding baselines as part of setting transparent targets and monitoring progress towards them in real-time. Just 41% of Australian survey respondents said they can report timely, reliable data on their performance toward sustainability initiatives. But those that can are unlocking new opportunities for the future.
At Cognizant, we have worked with Orica, a leading mining and infrastructure solutions provider with global manufacturing capability, to create a unique digital platform that shows real-time reporting of its greenhouse gas emissions and how its abatement technologies are working.
The platform captures and curates Orica emissions data to track its progress transparently. This feeds into the company’s Australian Carbon Credit Units program as part of Orica’s commitment to decarbonisation and its access to green loan schemes.
A greener future for every business
Not every business needs to lead from the front, but there are now many opportunities to learn from best practice and model your own path forward. Read the full version of our Deep Green report to see the bigger picture on bringing data, technology and collaboration together to drive the next phase of sustainability in business.
