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Sustainable
Business
Transformation
After globalization and digitization, companies are facing a third wave of transformation within a few decades: the one towards a sustainable economy (sustainable business transformation). In the face of the urgent need for action, and the resulting dynamics or requirement and reporting obligations, sustainability has the potential to be a gamechanger for organizations of all sizes and from all sectors.
Ahead lie new regulatory obligations, legal requirements, and a massive change of processes, technologies, and mindset – but also countless opportunities for companies. Leaders who act strategically meet these challenges decisively and proactively, while also seeing the potential for themselves and their organization. They actively drive this transformation and seize the opportunity to lay the foundation for their future success.
Positioning as a responsible company
Unlocking new potential through sustainable, innovative products and services
Strengthening of customer relationships and development of new client groups
New partnerships and networks
Increasingly appealing for investors with easier procurement of external funding due to a good sustainability rating
Improved employee motivation due to a good reputation as a fair and responsible employer
Easier acces to governemnt funding
Immediate and long-term savings and cost reduction
Stable supplier relationships along the entire supply chain
New business and coorperation models with new actors, processes, and value chains
New legislation and regulations (e.g., CSRD, LkSG, SFDR, environmental law)
International standards (e.g., GRI, ESRS, ISSB)
Other initiatives (e.g., SDGs, UN Global Compact, DNK)
Investor requirements (ESG)
Customer demand / preferences for sustainable product
Competitive pressure
Partner and network requirements
Expectations by employees, friends, and families
Public pressure (NGOs, media etc.) and raising awareness
Technological progress (e.g., digitization)
Scarcity of resources/ raw materials and bottlenecks
For many companies, Sustainable Business Transformation begins with compliance: from adhering to regulations, laws and standards, to meeting reporting obligations and sustainability reports. Companies must compile basic figures, data, and facts, create an information basis for sustainability, and introduce suitable tools for data analysis.
However, to establish long-term functioning structures and avoid getting lost in countless individual activities, strategic embedding of sustainability is inevitable. This includes analysing the company’s own impact, identifying key levers, and defining initial goals along material sustainability topics. Based on these foundations, targeted strategic measures can be derived and prioritized in a meaningful way to ensure optimal use of internal resources and to focus efforts on relevant areas of action.
Nevertheless, transparency, internal and external communication, and effective change management are equally essential for a successfull sustainability strategy. Organisation, processes, and the mindset of those involved must follow the transformation and be aligned with the sustainability efforts.
This includes raising awareness among employees and building the necessary expertise, amongst other things in the field of complex data analysis (data science, artificial intelligence, machine learning) – all components of comprehensive sustainable management.
As organizations and information management mature, the insights into interrelations and causes increase, leading to ideas and approaches that go beyond reporting and actively change products and processes. The company gradually evolves into a sustainable operating organization. Agile project management and creative innovation techniques, such as design thinking and future design, accelerate this development.
Successful (i.e., effective and efficient) sustainability management relies on facts, i.e. data and information. These not only serve the reporting of sustainability indicators in the past and present, but also allow the identification of patterns and causal relationships. Therefore, new approaches for optimizing and improving can be realised.
Based on this, measures can be derived and prioritized, investment needs estimated, and a roadmap regarding small optimizations and larger projects can be implemented to gradually steer the company towards sustainability.
Optimization of resource efficiency in production and business processes
Assessment and targeted selection of suppliers and partners
Internal process optimisation to meet compliance requirements
Integration of sustainability factors into incentive schemes
Measures to promote gender equality and diversity
Implementation of social standards and requirements
Improvements in occupational health and safety
Preparation of sustainability reports
To collect high-quality data and information, professional data and information management is required in addition to the expertise in business, production, and operating processes (including their specific sustainability aspects). Data must be collected at all relevant locations in the company, processed based on the specific targets, and integrated in a way that it can be efficiently used as a basis for decision-making.
The effective use of data and information requires appropriate analysis tools from “simple” reporting to innovative machine learning and artificial intelligence. However, organizations and people must be provided with the knowledge and skills to use these tools effectively and meaningfully.
Data and digital technologies are an essential foundation for sustainable business. However, their impact on humans and the environment can vary depending on the specific applications – ranging from obvious factors, such as resource consumption of server operations, to more complex challenges, such as ethical algorithms.
To reduce the risk of such damage, we need digital governance to regulate the handling and use of data and algorithms. When using artificial intelligence, we must pay attention to its trustworthiness and compliance with ethical rules.
Furthermore, the IT tools in use must also not increase the cost of sustainability, e.g., due to high consumption of electricity or other resources.
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