Embedding Sustainability Software Tools and Regenerative Business Practices Are Critical Levers to Combat an Organization's Burnout

By Rithika Thomas | 3Q 2024 | IN-7524

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The concept of "sustainability" dates back to the industrial revolution when Greenhouse Gas (GHG) emissions were far lower. In the 1990s, with growing concerns of climate change and Bill Clinton's political policy, "sustainability" became a buzzword. Following the Paris Agreement and the Kyoto Protocol in 2015, "sustainability" was given an eco-friendly veneer, and extensively used in marketing language and corporate strategy. Over the past few years, the marketing hype of sustainability has died down due to execution gap and realities of holding companies accountable for their operations, while addressing greenwashing claims. Today, to reiterate its impact and address skepticism, the term has taken on a quantifiable analogy-synonymous with transparency, efficiency, and long-term vision, alongside organizational Return on Investment (ROI) and accountability.

Sustainability as a construct is losing its luster with voluntary reporting, complex Environmental, Social, and Governance (ESG) calculations, and lack of standardized industry-specific methodology. Organizations are reporting and performing the bare minimum to comply. Sustainability software tools are critical to streamlining the reporting process, aggregating siloed data across the business, and aiding with transparency. The true spirit of sustainable operations is captured through ESG metrics that focus on long-term value-driven strategies. This includes enduring societal support, reducing negative environmental impact, and advancing a company's purpose to be a future-proof business. The key drivers of sustainability software tools are listed below:

• Regulatory Landscape: Organizations catering to high-emitting industries are facing increasing pressure to track and report their operations in a consistent and reliable manner. This is resulting in an array of software solution providers catering to ESG reporting and carbon emissions tracking, supporting companies in catching up to impending industry-specific regulatory requirements.
• Climate Awareness of Sustainability Challenges: Heightened awareness of global challenges like climate change, social inequality, and governance issues have resulted in investors and customers insisting on businesses being held accountable for their operational impacts on society and the environment. Reporting through software tools aid businesses with accurately sharing information with shareholders and stakeholders without burdening the employees.
• Cascade Effect for Value Creation: Sustainability reporting software improves performance by identifying and addressing potential ESG exposures. Taking responsibility and identifying areas of improvement results in cost savings, trustworthy reputation, and greater competitiveness in the industry to future-proof business.
• Demand for Connected Ecosystems to Optimize Performance: The surge in the adoption of digital infrastructure streamlines the operation of the service industry, effective resource planning, collaboration, and improved efficiency. Sustainability software requires minimal Information Technology (IT) infrastructure and support. Once implemented, it assists businesses with digitizing workflow, identifying and managing risk, improving operation, and better decision-making.
• Reputation and Branding: Transparency of a company's environmental and social performance indicators contributes to improving their reputation and increased stakeholder engagement with consumers and employees. ESG disclosures and assurances identify businesses that accurately report sustainability metrics, preventing greenwashing.

Forward-thinking businesses are redefining the core business practice to embed sustainability and regenerative thinking from the drawing board stage. The gap between sustainability pilot projects and business operations is widening due to the lack of a company-wide strategic goal. The structure of sustainable business ensures each employee is motivated and compensated through quantifiable, practical, and clear goals. Mapping supply chain and product flows with Life Cycle Assessment (LCA) tools, for example, can ensure a company is relevant, competitive, and aware of its impact from cradle to grave. Lastly, sustainability is not an afterthought, but weaved into every aspect of the operations and product value chain to maximize value, compliance, and profitability.

Sustainability software providers such as Enablon, Domo, i-Point, Makersite, openLCA, Persefoni, Sphera, and Watershed, to name a few, with standard methodologies, calculations, and third-party assurances, support documentation of a company's sustainability goals, thus increasing trust and loyalty. This is invaluable information for investors to make more informed investments and attract new market opportunities in a rapidly evolving marketplace. Additionally, sustainability software tools increase awareness of sustainable business practices through quantifiable metrics, measuring impact and operational savings-raising awareness on its impact.

Please refer to the following ABI Research reports for more information on sustainability software solution providers for ESG, carbon management, product design, and smart building with relevant case studies: The Market for Sustainability Software Solutions Addressing ESG Reporting, Carbon Management, Building Operation and Product Design (AN-5916) and Life Cycle Assessment (LCA) Software Tools and Vendor Analysis (PT-2741).