What Does 2023 Have In Store From A Sustainability Perspective

This article is written by Mike Barry, Strategic Advisor, speaker and commentator on Sustainable Business

We could look back on 2022 as the year when our short-term challenges just got worse. Companies who’d survived the privations of the Pandemic hit by supply chain inflation, labour shortages and rocketing energy bills.

Yet we could also see it as the year when a new set of systemic challenges (and opportunities) emerged too as the climate crisis became real for people across the world. Record heat in Western Europe; record flooding from Australia to China, West Africa and the Southern United States; record droughts in Western Europe and the Southwest of the USA. Western Europe saw 20000 excess heat related deaths this summer, whilst wheat yields tumbled as temperatures soared from the Indian Sub-Continent to France and Canada even as Russia’s invasion of Ukraine reduced supplies.

Of course, 2022 was a potent amalgam of both of short term and long term pressures and 2023 will be no different. Its easy to see them as two very different challenges. One a matter of short term survival for your current business model; the other a long term transformation to a new low carbon one. What unites them both is that they demand that companies make ‘big calls’ – on both the granular management of today’s cost base as well as the transformation of business models; products and services; and value chains to slash carbon footprints.

Neither of these can be done on a whim. Yet a new survey from SAP showed that whilst 90% of UK companies make a link between becoming more sustainable and their future profitability as many as 40% of UK businesses rely solely upon assumptions and estimates, not facts, to screen their supply chains, while one-in-three (33%) do so when working to address climate change -  90% Of UK Leaders Connect Long-Term Profitability With Environmental Sustainability, But Failings With Data Provide Stumbling Block To Growth - SAP UK News Center.

That is simply not a viable commercial strategy. A complex world demands deep insight; robust decisions; tight control; and transparent performance for multiple stakeholders from investors to regulators, customers, consumers, colleagues, and business partners.

Let’s understand what we’ll see in 2023:

People want to make a positive difference - 71% of people want to work for a company that makes a positive difference - IBM Survey: 71% job seekers want to work for environmentally sustainable companies after pandemic - The CSR Journal and 32% of millennials have shifted their behaviours to be substantially more sustainable - Recent Study Reveals More Than a Third of Global Consumers Are Willing to Pay More for Sustainability as Demand Grows for Environmentally-Friendly Alternatives | Business Wire

Energy use and cost has to be cut - We use energy everywhere it’s at the heart of so many aspects of a company’s cost base. For example, food production uses energy to make fertilizers, pesticides and packaging; for farm and logistics vehicles; to heat and cool food; to power farms, factories, shops and cafes. But it is so embedded in the food system that it is hard to ‘see’ across extended value chains. We need analytics to ‘find it’ and data to track reductions in its use and the associated cost savings. We also need data to track every aspect of mobility in a business from logistics to business travel.

Proof needs to be provided - We live in a world that expects hyper-transparency. Large retailers like Tesco and Zalando are demanding proof that their suppliers have cut their carbon and plastic footprint substantially if they want access to their shelves. Similarly, companies want increasingly to make green claims about the products and services they sell but with regulators watchful for ‘greenwash’ in the marketplace they need more and more data to substantiate their claims.

Scope 3 needs to be managed - Investors are demanding that large corporates become Net Zero for their carbon emissions, particularly across what’s known as their Scope 3 – their extended global supply chains and networks of business partners or companies they finance, often numbering in their 10000s. Measuring this huge and complex carbon footprint cannot be done via emails and spreadsheets, it demands advanced approaches to big data and artificial intelligence to gather, manage and interpret huge datasets. Companies like Walmart, Amazon, Arla, Mars, Unilever and Morrisons have built sustainability support hubs for their suppliers.

Transformation needs to be prepared for - Companies are having to make big bets on shifting their business models. Does an oil company become a renewable energy company? A diesel car manufacturer an EV one? A meat business pivot to plant or even cellular based alternatives? Identifying when and how to make the change and then deliver it demands consumer, policy, financial, supply chain data on a staggering scale to underpin decisions that have multi-billion-dollar implications.

Navigating short term survival and long-term transformation needs to be based on comprehensive, robust, real time data sets that are gathered, interpreted and shared consistently and efficiently across the economy.

Now all of this can feel very daunting for an SME dealing with existential headwinds but there is help out there! For example, the Zero Carbon Forum for hospitality (Hospitality Sustainability - Zero Carbon Forum); Make UK for manufacturers (Net Zero | Make UK); SAP’s Thrust Carbon - Thrust Carbon for Concur Travel - SAP Concur App Center and Choose - CHOOOSE Climate App - SAP Concur App Center – tools, to provide granular insight on travel’s carbon footprint. Zero Carbon Business Coalition (Zero Carbon Business - find advice on energy saving and net zero for SMEs.

SAP Concur has always been about delivering 4Cs for their corporate customers (Cost, Convenience, Carbon and Care) but traditionally cost and convenience dominated decision making. The Pandemic, the Cost of Living Crisis, Energy Costs and the emerging Climate Crisis feel like a watershed moment where, at last, we take a balanced, rounded view of these 4Cs to how companies travel.