Sustainability: Are businesses doing enough?
With COP26 in full swing, environmental issues are once again top of mind for many. As we have seen in 2021, Canada is particularly feeling the effects of climate change. This year our West Coast experienced a heat dome that has been blamed for the deaths of almost 1,000 people and more than 1 billion marine animals. Some areas have suffered from extreme drought while others have seen excessive rain and flooding.
On August 9, the United Nations’ Intergovernmental Panel on Climate Change (IPCC) warned of dire consequences to countries that continue to ignore the reality of climate warming in their latest report.
In reaction to the IPCC report, Environment Minister Jonathan Wilkinson stated, “Canada is warming at nearly twice the global rate. Parts of western and northern Canada are warming at three times the global average.” Wilkinson also stated that scientists have made a clear link between climate change and more frequent and powerful weather events, including the heat waves, wildfires, flooding and sea ice loss we are seeing in Canada.
Companies react to climate change
The IBM Institute for Business Value recently polled more than 1,900 executives from retail and consumer packaged goods (CPG) businesses around the world to get their take on how important addressing climate change and sustainability is for their business. Ninety percent of the companies polled said that by the end of 2021, they will be working on sustainability initiatives across their enterprise.
One of the debated points in Canada’s recent federal election was that making sustainability targets and sticking to them are not easy. For governments, these targets are difficult to define and achieve, and every political leader has a different strategy.
It’s no different for businesses, and in some ways even more challenging as standards are not always agreed upon. The retailers we spoke to grapple with the process of clearly defining sustainability metrics. Our study revealed that less than 1/3 of retailers and CPG companies surveyed have defined ways to measure their sustainability goals.
Sustainability is the new business imperative
Both consumers and regulators are pressuring businesses to step up and address environmental issues. What was once an optional business strategy has now become a business imperative where enterprises must demonstrate that sustainability is a priority. The global pandemic seems to have increased the pressure.
Two years ago, most consumers (63%) were willing to pay up to 30% more to support brands with a purpose, but only 8% were willing to pay more than a 100% premium. Today, almost half (43%) of consumers are willing to pay at least a 100% premium to support brands that are sustainable and environmentally responsible. That is not something that retailers and CPG can ignore.
As companies have built these priorities into their business plans, they are beginning to view sustainability as a viable path to growth and improved business operations. In fact, 7 in 10 retail and CPG executives believe their sustainability development goals can now improve operational effectiveness and agility.
Sustainability goals are more achievable with hybrid cloud and AI
Recognizing the need to achieve sustainability goals and determine measurable impact, many companies have turned to IBM for help. They need sustainable solutions, built on efficient hybrid cloud environments, which run technologies like AI-powered automation and blockchain.
To help organizations plan, measure, and achieve their business outcomes and sustainability goals, IBM has expanded IBM Garage services, specifically designed to help clients become more sustainable enterprises. IBM has also partnered with a broad ecosystem of sustainability partners to develop technology platforms that can help make the retail and CPG more sustainable.
Next steps for Canadian enterprises
You don’t have to go this alone. Check out these resources to help you move to the next phase of your sustainability plan.
COP26 Resilience Hub. Access to over 100 events, activities and networking opportunities.
How do you build a sustainable business and future
https://www.ibm.com/ca-en/campaign/sustainabilityWhy do we need global ESG reporting standards?
What a sustainable future for looks like in Quebec
Making sustainability part of your core business strategy
Recommended COP26 Sessions – https://cop-resilience-hub.org/
By Dave McCann, Managing Partner & Canadian Leader, IBM Consulting