The changing role of sustainability in business – from brand reputation and compliance to business transformation.
Sustainability teams are increasingly being asked to demonstrate business value. Not only do they have to collect and report on ESG data and plan and implement a sustainability strategy, but they also have to understand how this integrates with the overall business values and strategy.
This requires tighter integration with all parts of the business and going beyond collecting data for ESG reporting. It requires educating employees and driving action based on insights from the data collected.
To top it all, they are often required to perform without formal authority and frequently rely on their relationships and influence over other departments to collect data and implement actions.
In this article we highlight:
Fourt pathways to integrating sustainability into business operations.
- Embedding Sustainability into Supply Chain Management
- Climate risks and Enterprise Risk Management
- Identifying Opportunities for Greener Products and Services
- Facilities Management: Reducing operating costs through emission reductions
Based on the focus of your business operations, one or more of these might be the right fit for your company.
Embedding Sustainability into Supply Chain Management
Supply chain management is an interconnected web of several issues that require holistic systems thinking at the corporate level.
Key drivers of a strong supply chain management strategy include:
- Regulatory compliance – including Scope 3 emissions reporting, CSDDD, extended producer responsibility laws
- Risk mitigation – including climate risks, geopolitical uncertainties, resource availability
- Cost efficiencies – tariffs, logistics optimization, waste reduction
- Brand reputation & consumer expectations – aligning ESG goals with corporate values
Strategies for integrating sustainability into supply chains
Sustainability teams can work with procurement teams, adding sustainability metrics to the criteria used for supplier selection. They can also improve supplier engagements, co-develop sustainability initiatives with suppliers, and provide incentive programs to drive improvements in the supply chain. The integration can help diversify supply chains, reduce emissions in the supply chain, and help design circular supply chains that prioritize recyclable and reusable materials.
Supplier engagement can help identify risks and opportunities in the value chain that can be used to drive innovation, mitigate risks, and create business value, to identify new opportunities. Companies that embed sustainability into supply chain decision-making reduce risks, drive efficiencies, and create business opportunities.
Climate risks and Enterprise Risk Management
Climate change introduces both risks and opportunities for businesses. Enterprise risk management needs to include climate-related risks and opportunities:
- Physical Risks – More severe weather events impact operations, supply chains, and infrastructure
- Transition risks -The shift to a low-carbon economy affects business models, regulations, and consumer preferences
- Opportunities – Companies can capture emerging market demands, like the move from plastic to paper-based packaging, locally sourced inputs, electrification and consumer preferences for greener products
Identifying Opportunities for Greener Products and Services
Empowering product teams to consider circularity can drive innovation and create new revenue opportunities.
- Sustainable Design: Prioritizing recyclability, resource availability, and extending product life through repairability.
- Reverse logistics: Implementing take-back programs for refurbishment, recycling, and material recovery to create closed loop systems.
- New business models like sharing and leasing products – moving away from ownership to service-based model.
Jabil’s sustainability report provides an an excellent example of how energy-efficient alternatives can inform acquisitions and overall business strategy and operations.
“Liquid cooling chips and electronics have become a more effective and energy efficient alternative to air cooling in many applications. To help meet this demand, Jabil has acquired Mikros Technologies, a leader in engineering and
manufacturing of custom liquid cooling solutions for thermal management.”
Sustainability can improve brand reputation and generate revenue by creating new products and services that capture the market for greener products.
Facilities Management: Reducing operating costs through emission reductions
Corporate real estate decisions are evolving due to hybrid work trends, aging infrastructure, and regulatory shifts. Data collected by sustainability teams for Scope 1, 2, and 3 emission calculations and climate risk disclosures can provide data-driven insights to reduce emissions and operating costs through energy efficiency solutions.
- Climate risk assessments – Ensuring resilience against extreme weather events
- Scope 3 – Business travel emissions -Optimizing office locations based on key client locations and travel costs
- Scope 1 and 2 emissions – Energy efficiency – Reducing carbon footprints and operational costs
- Regulatory landscape – Compliance with building performance standards
By integrating sustainability into facilities management, companies can align financial and sustainability goals for business resilience and reduce operating costs.
Turning Challenges into Opportunities
We recognize the challenges that sustainability teams face in today’s business environment and encourage them to look for opportunities and business value. We remain committed to supporting these teams to create systemic changes that move business models from:
- Linear to circular models – reducing waste, increasing resource efficiency
- Extractive to regenerative – Shifting from depletion to renewal
- Fossil fuel-based to renewable energy – driving the energy transition
Companies that embrace these transformations will future-proof their business models, drive innovation, and position themselves as sustainability leaders
