Recently many people and organizations celebrated World Earth Day on June 5. This year, the day felt slightly different. The fog is clearing, and there is clear momentum behind the new era of sustainability. Businesses are now understanding the sense of their responsibility in helping the world tackle the climate crisis. Research indicates that 92% of CEOs believe the integration of sustainability into operations is essential to their business success, and 48% are already conducting this integration.
Reflective of the changes we currently see afoot, President Joe Biden’s inauguration signaled hope for a renewed commitment against climate change. The US rejoined the Paris Climate Agreement, and Biden’s administration brought an accredited climate team into the White House.
At Globant, we believe that in this decade of action, these efforts must go further by embracing digitalization and building a grassroots culture rooted in sustainability awareness. It’s time for sustainability to shift from being a one-off project, or part of solitary corporate social responsibility initiatives, to instead become an integral part of businesses going forward.
This new approach means reevaluating everything from how organizations manage their technology, to how they assess business risks, to how they report their performance to investors. Fortunately we’re already seeing examples of organizations doing just that – BBVA and Enel created a €1.35 billion sustainable financial facility. Enel has sustainability targets that, if reached, result in a financial bonus. If they are not reached, there is a penalty to pay. In the case of Mercado Libre, it sold $400 million of sustainable bonds, in order to support initiatives for financial inclusion, sustainable mobility, energy efficiency, social development and empowerment through education.
Linking sustainability to key financial metrics and results, demonstrates a seriousness to sustainability that we haven’t previously seen in many organizations.
So how can other organizations make this transition, and become truly sustainable? Here at Globant, our Sustainable Business Studio led by Elena Morettini, created a framework in which four key elements are identified to achieve this.
- Heightened awareness. From the C-level, through to every individual contributor, sustainability awareness needs to be at the heart of an organization if there is to be real change. In many cases this will require a cultural transformation. Businesses will require dedicated training and education for executives, and task forces (specialized “green” or “carbon” teams) responsible for driving digital sustainability transformations. Such measures also need to include diversity and inclusiveness – and so we expect to see roles such as the “Chief of Fairness” rise in importance.
- Conscious leadership. Unfortunately, many executives who are not specialists in sustainability, can quickly be overwhelmed with the number of different standards, KPIs, metrics, and even terminology. That’s why it’s imperative for businesses to organize focused sessions providing the tools and knowledge for people to bring sustainability into their specific roles and responsibilities.
- Technology for sustainable business. The concept of “technology for sustainable business” aims to rethink, repurpose, and reinvent digital technology solutions in a way that results in more carbon, energy, and resource efficient processes and industries. A great example is using the emergence of “digital twins” to better calculate carbon emissions among the entire value chain – which can then be used to make carbon pricing decisions. This will enable businesses to plan their carbon budget as carefully as any other budget.
- Digital sobriety. Technology is core to every modern business — yet its use also has a significant environmental impact. Some estimates state that reducing a file by a single kB, that is loaded on 2 million websites, can reduce CO² emissions by an estimated 2950 kg CO²e per month – the same as flying five times from Amsterdam to New York. So expect to see a fundamental shift in how the IT industry applies design, data, and infrastructure to software development in a way that results in reduced energy consumption and increased energy efficiency – for example by following specific software coding guidelines that are more efficient in using vital resources.
The time is now for a sustainable business revolution. Going forward, we don’t believe businesses will be able to survive without taking their sustainability commitments seriously. As a first step, if you haven’t already, undertake a sustainability assessment of your organization. This should cover everything from whether or not you are tracking and measuring your environmental footprint, to whether you are linking sustainability and financial metrics together, to whether your company culture values sustainability.
Find out more about sustainability in Globant’s “Navigating the Sustainable Business Era” report.