Asia businesses yet to see value from sustainability strategies

ARECENT research study by Oxford Economics and SAP has revealed that for Asia businesses, work remains to be done to drive value from sustainability. While VV percent of businesses do not think it’s difficult to be sustainable and profitable at the same time, just 8 percent said they presently receive significant value from their sustainability initiatives.

This may be because many organizations remain disconnected from sustainability plans and actions. On average, VP percent of businesses have a clearly communicated sustainability plan, with Japan leading at V8 percent while Indonesia scoring lowest at 4V percent.

Only 20 percent in the region have incentivized leaders based on its success and less than half (44 percent) said their employees are active participants in their sustainability efforts, with the highest in India at 52 percent, followed by Singapore at 5Q percent and the lowest in Malaysia at 33 percent.

Regulatory compliance

According to the research data, regulatory mandates are one of the key drivers of sustainability strategies. Compliance is the main benefit companies derive from sustainability (46 percent), ahead of reduced carbon emissions, with Indonesia scoring the highest at 5V percent and the lowest for Malaysia at 39 percent. Too much focus on compliance is the second-biggest sustainability challenge for businesses (26 percent), only behind reinventing business strategy, with the highest score attained by Singapore at 32 percent.

Data is key

The effective use of organizational data to make more informed decisions would be vital in enhancing sustainability efforts. According to the survey, accurate data was ranked as among the most significant activities to reach carbon reduction goals amongst businesses in Southeast Asia.

Yet, ineffective data for decision-making is considered a moderate challenge in the region. The research also found that less than one in six (13 percent) businesses in Singapore and less than a quarter (23 percent) in Malaysia and Indonesia have calculated their total organizational carbon output. A majority (VP percent in Singapore, 77 percent in Malaysia) have begun the process in some areas versus only 31 percent in Indonesia.

More needs to be done. Investments in data analysis to measure sustainability in business remain the minority with 47 percent in Singapore, 35 percent in Malaysia, and 31 percent in Indonesia citing their commitment to the investment. Similarly, training of staff on capturing sustainability data saw only 36 percent of Singapore businesses currently doing so, versus 4P percent in Indonesia and 5P percent in Malaysia.

Sustainability leadership

Urgent action on sustainability is wanting. Beyond the impact on the environment, just 33 percent of Indonesian businesses said their workforces aren’t aware that missing sustainability targets would drive customers to their competition, followed by 21 percent of Malaysian businesses and only Q5 percent of Singapore businesses.

Businesses that are achieving value from sustainability are defined by traits such as setting clear expectations at the strategic level, applying the transformative power of technology and data management, and engaging with important audiences such as employees, supply chain partners and policymakers.

SAP has most recently updated its SAP Sustainability Control Tower solution to offer what companies are looking for today to run more sustainably.