Sustainability is the new growth strategy

Is the role of sustainability changing within companies? A combination of existing structures being questioned and lower technology costs for sustainable investments now paves the way for sustainability as a growth strategy rather than a risk mitigation function. Growth in a sustainable manner…  

Since the introduction of corporate sustainability, it has been considered an extra cost for risk mitigation and making “compensating” positive impact. Now, as the world has reached a tipping point of volatility, mainly due to climate change but also by emergence of COVID-19 and the war in Ukraine, the applicability of existing corporate structures is under question as these poses high risk to the existence of our planet. In parallel, the technology cost for sustainable investment has reached parity in comparison with non-sustainable alternatives.

The combination of these forces is turning sustainability into a growth strategy for corporates. Companies can still grow, even faster than before, and become highly profitable without compromising the ability of future generations to meet their needs. The enabler of such growth?  IT and digitalization.

Developing sustainability strategies

The role of corporates, as the change makers in our societies, in sustainable development is inevitable and critical [1]. The challenges associated with developing corporate-sustainability strategies have received some attention over the past decade [2]. It has been argued that to truly incorporate sustainability into corporate decision making and culture, it’s essential to develop new governance strategies to fully involve stakeholders, so as to positively impact sustainability from the three main perspectives of society, economy and environment [3].

Recent study at Cognizant called Deep Green have highlighted the importance of five key actions on corporate sustainability desired by top executives around the world:

1.     Boost sustainability investments
2.     Elevate Internal Initiative
3.     Expand your sphere of influence
4.     Explore the deeper application of technology
5.     Evolve power structures

On the sustainable interaction of corporates with the community, it has already got transformed to long-term mutually beneficial commitments beyond philanthropic donations [4] [5]. However, one aspect which has not received the same level of attention is the way in which corporates grow even faster by means of investing in sustainability initiatives.

The evolution of sustainability’s role in corporates

In 2000s, the role of sustainability was more connected to CSR (Corporate Social Responsibility). The corporate used marketing agencies to tailor the right message around their activities. However, by increasing the regulation, the role of sustainability evolved in 2010s to become a risk and compliance challenge. At that time, strategy consulting was needed to form right strategies to address risk and compliance topics from sustainability.

Then in 2020s, we observed a huge change in the role of sustainability in the corporate world. Be the emergence of COVID-19 and also the war in Ukraine, almost all the recovery plans of the already depreciated economies around the works were set around sustainability. That’s the time when sustainability is being seen as a growth strategy for the recovery from bad economic situations.

Cognizant unlocks sustainability opportunities

To address the growth plans, corporates need new empowering solutions. Developing, implementing and maintaining such solutions become a task for the system integrators – such as Cognizant.

Our sustainability services empower clients to navigate the complex landscape of environmental, social, and governance (ESG) challenges in today’s business world. With a commitment to sustainability and responsible business practices, Cognizant assists its clients in crafting comprehensive strategies that not only mitigate risks but also unlock opportunities for growth. Our services encompass a wide array of solutions, from ESG reporting and compliance to sustainable supply chain management and carbon footprint reduction.

Cognizant’s expertise helps clients align their business objectives with sustainability goals, fostering resilience, reputation enhancement, and ultimately, a positive impact on the planet and society at large. Through innovative approaches and data-driven insights, Cognizant is at the forefront of driving sustainable transformation for its clients, making a meaningful contribution to a more sustainable future.

Data management is key

The development of sustainable societies is influenced by and affects corporate sustainability. The interdependence of the areas which are used to be independent is now even more trivial [6]. And the role of data handling in this evolution is inevitable. The current revolution of artificial intelligence (AI), which has the potential to highly benefit society, has also revealed the numerous hazards associated with irresponsible use of the technology [7].

Although profiling and automated decision-making algorithms have the potential to provide enormous opportunities to corporates, it’s of utmost importance to follow ethical and transparent guidelines in these applications [7]. This becomes particularly relevant in the context of public emergencies, such as that of the COVID-19 pandemic. Therefore, we argue that a transparent and ethical handling of data and AI-based tools is an integral aspect for corporate sustainability.

Learn more and get in touch with our team of sustainability experts

From insights to implementation, Cognizant offers sustainability advisory services and solutions using a strong ecosystem of partners. We help organizations become planet stewards, reduce their environmental footprint and turn sustainability commitments into achievable milestones. Visit Cognizant's Sustainability Services page to learn more. 

References

[1] N. Agarwal, U. Gneiting, and R. Mhlanga, Raising the bar: Rethinking the role of business in the Sustainable, Development Goals, Oxfam, 2017.

[2] M. K. Linnenluecke and A. Griffiths, "Corporate sustainability and organizational culture," Journal of world business, vol. 45, no. 4, pp. 357-366, 2010. 

[3] "Stockholm Resilience Centre’s (SRC) contribution to the 2016 Swedish 2030 Agenda HLPF report (Stockholm University, 2017)." 

[4] S. Kantabutra and N. Ketprapakorn, "Toward a theory of corporate sustainability: A theoretical integration and exploration," Journal of Cleaner Production, p. 122292, 2020. 

[5] Karnama, Ahmad, and Ricardo Vinuesa. "Organic growth theory for corporate sustainability." Sustainability 12.20 (2020): 8523

[6] A. Karnama, J. A. Peças Lopes, and M. Augusto da Rosa, "Impacts of Low-Carbon Fuel Standards in Transportation on the Electricity Market," Energies, vol. 11, no. 8, p. 1943, 2018.

[7] R. Vinuesa et al., "The role of artificial intelligence in achieving the Sustainable Development Goals," Nature communications, vol. 11, no. 1, pp. 1-10, 2020.