Sustainability transformation is digital transformation
Sustainability, green commerce, and decarbonization are common fodder for media discussion today. This has been a business “problem” for over two decades, with governments pushing carbon tax credits and banning light bulbs. What has recently changed is that smart people enable business transformation.
Tesla is considered a leader here. It sold an electric car, at an appropriate price, that people would buy even if it were gas-powered. Another leader is Social Capital’s Chamath Palihapitiya (the SPAC king). He has focused capital only on companies like Telsa that are creating business value through sustainability. The end result: the market changed. Investors are currently pouring $12 trillion into ESG market capital investments. The business “problem” is now a business “opportunity.”
Saving money through sustainability initiatives now has well-documented paths. The outlook is even more government incentives to transform and adding more headwinds (taxes) to the status quo. To put this in a simpler light—sustainability has now become just another digital transformation project. Investment + Technology = Business Value.
This is good news: digital transformation is something we all understand and are comfortable with. Challenges, while significant, can be overcome. ROI, while different, can be predicted (and even guaranteed). The ancillary benefits are also there—higher-quality working environments for the millennials that will make up 75% of the workforce by 2025. Government incentives can accelerate the ROI curve. The challenge remains the same as any other digital transformation project: inertia and direction.
Like any digital transformation undertaking, the hardest part is getting started. Creating internal risk profiles for sustainability projects usually ends in asking money for no business value—which makes it a non-starter. If you do not have internal resources that understand sustainability you may not understand which goals are achievable. Diverting core resources to work on sustainability projects impacts core business, so who is going to do the work?
Start by finding your focus: you cannot do everything at once, but knowing where to best start and create value is a key success factor. Before you even begin your journey, make sure it’s framed in terms of successful business outcomes. Achieving tangible business value fuels an evergreen approach to sustainability.