Our research shows that 86% of companies consider environmental sustainability to be critical or important to their long-term business success. Further, our studies show that digital transformation is crucial to achieving it. But how can companies determine the sustainability impact their technology adoption makes to make a business case for new solutions? This eBook explores the relationship between digital transformation and sustainability, and more specifically, how sustainability impact can be credibly measured and used to make business decisions. The eBook uses and shares highlights from eleven credible, audited case studies from real companies that have improved sustainability through technology adoption.
Please enjoy the summary below. For the full research, please visit our sponsor, Dassault Systèmes (registration required).
Table of Contents
- Digital Transformation’s Sustainability Value
- Why Calculate Sustainability Impact?
- How to Approach Impact Reporting
- How to Calculate Sustainability Impact
- A Sustainability Impact Methodology: Case in Point
- Case Studies
- Recommendations
- Acknowledgments
The Business Value of Sustainability
The ESG Imperative
Sustainability is increasingly recognized as essential to long-term business value. ESG (Environmental, Social, and Governance) is a fundamental pillar of sustainable business success, alongside other business imperatives including innovation, supply chain resilience, and workforce development. Sustainability is now a must-have. Our research on strategies for sustainable business success shows that the vast majority of companies, 86%, consider environmental sustainability to be critical or important to their long-term business success.
Measuring Sustainability Impact
More companies recognize the business value of sustainable practices. A joint United Nations–Accenture study reports that 88% of CEOs say the business case for sustainability is stronger than it was five years ago. But what is the value, how can it be measured, and can it be incorporated into company processes to help companies choose the right initiatives and partner to achieve it?
This research answers those questions. It introduces the importance of digital transformation in achieving ESG benefits and shares a credible, scientific approach to measuring the business value of sustainability impact.
Digital Transformation’s Sustainability Value
Sustainability Demands Digital Transformation
Sustainability is good business, and ESG initiatives require supporting technology. More than three-quarters of companies, 82%, report that technology / digital transformation is important or critical to support environmental and social sustainability. Digital transformation and sustainability can go hand-in-hand.
Difficulty Determining Sustainability Value
While most digital transformation initiatives and technology investments are initiated and justified to achieve a financial return on investment (ROI), it’s important to recognize their ESG advantages in addition to their financial benefits. For example, manufacturers may reduce cost by improving production efficiency while also reducing carbon emissions. Similarly, engineers could optimize designs to enhance performance while simultaneously reducing energy usage and waste. These values should be calculated to complement the financial ROI and improve decision-making based on ESG impacts.
Driving Economic and Environmental Advantages
A joint Rockefeller Asset Management-NYU Stern Center for Sustainable Business analysis reports a growing consensus that good corporate management of ESG issues typically results in improved operational metrics such as return on equity (ROE), return on assets (ROA), or stock price. It’s increasingly valuable to determine the sustainability impact of digital transformation more directly associated with the initiative leading to the improvement. It’s even more valuable to estimate this impact in advance, complementing the financial ROI with a strategic sustainability ROI to help justify the investment.
While companies have significant experience deriving financial metrics, they often lack the ability to accurately and holistically measure the ESG impact of their digital transformation efforts on their value chain. This research explores how to properly determine the value, and reviews case studies that show tangible sustainability impact based on a credible, scientific methodology.
Case Studies
Sample Case Studies
Here is a sample including two of the eleven case studies in the eBook.
Recommendations
Adopt a Sustainability Impact Mindset
Focus on the sustainability value of digital transformation in addition to the financial ROI to achieve business success and resilience. ESG strategy drivers, including internal goals for net zero, customer sustainability demands, and calls for transparency like product passports, have increased. 96% CEOs agree that innovation and technological progress are essential to achieving the global sustainability agenda, and 82% of organizations plan to increase environmental sustainability investment in the next 12–18 months.
Determine Sustainability Value
The case studies demonstrate that digital transformation delivers tangible sustainability benefits. It’s time for companies to invest in a scientifically grounded methodology to calculate and demonstrate the sustainability value of their initiatives. Moving from general statements to scientific calculations is demanding but also a positive step to better articulate digital transformation’s true value. It will require help from a variety of sources, including external experts and their digital solution and service providers. These companies can demonstrate how their solutions are proven to drive both financial and ESG value. Where possible, companies may also be able to leverage the solution provider’s methodology and case studies to calculate their own value.
Use Sustainability Value to Justify Initiatives
Looking to the future, companies should use the sustainability impact approach proactively. They can leverage case studies and company data to choose initiatives with ESG impact in addition to cost, quality, and efficiency improvements, ensuring they achieve both financial and sustainability ROI from their digital transformation initiatives. Getting better at measuring sustainability impacts also paves the way for building resilient, strategic, and robust operations.
*This summary is an abbreviated version of the ebook and does not contain the full content. For the full research, please visit our sponsor, Dassault Systèmes (registration required).
If you have difficulty obtaining a copy of the research, please contact us.
