Enterprise Resource Planning Blogs by SAP
Get insights and updates about cloud ERP and RISE with SAP, SAP S/4HANA and SAP S/4HANA Cloud, and more enterprise management capabilities with SAP blog posts.
Showing results for 
Search instead for 
Did you mean: 
Sustainability is Profitability: How Companies are Turning Sustainable Focus into Better Business Results

Would you believe it if I said that companies that put more effort towards greater environmental sustainability are achieving better business results than companies that don’t? I understand, it can be quite hard to believe at first. How can spending more money, time, and manpower on sustainability equal better business outcomes? Well according to a survey conducted by our friends over at SAP Insights, the 17% of respondents that believe environmental issues are materially impacting their companies’ finance and operations are not only seeing better business outcomes but even seeing higher revenue in the current financial fiscal year.

Of course trade-offs exist, especially for small and medium size businesses. SMBs don’t have the same ability to invest in sustainability as their larger counterparts. However, it’s clear that as SMBs grow, a shift in focus is necessary if they want to compete against each other and see sustainable profit and revenue. This is a top-down issue. Although consumers and governments are requiring more transparency from companies, leadership will play the most critical role. For the companies that are seeing better business results and higher revenue, they cite that sustainability within their company is motivated mainly by board/CEO environmental commitment over government regulations. Having this head start will be critical for SMBs as laws and regulations will start pressuring companies to have reportable data on emissions and environmental impact.

Data is power, especially when it comes to linking sustainable actions with profitability and revenue. The article states:
          “Companies with more data tend to have a more holistic view of their business, which gives them more granular insights into the trade-offs they can make to deliver better overall outcomes.”

The article uses a great example from the consumer product industry. As local governments each begin to change regulations on single use packaging, a company with good data can, “explore the financial effects of creating unique packaging for individual markets to attract more customers, pursue zero waste aspirations, or lower the costs of following local environmental regulations. The company would even be able to predict the most cost-efficient timeframe for developing new packaging rather than letting regulations force the issue”. This exemplifies the importance of having a strong system in place to collect and analyze data, especially regarding sustainable practices.

How does your company interact with sustainability? Are your companies leading the pack or waiting to see how this field continues to develop? I’d recommend checking out the full article here. They go into much deeper detail about the survey and the impacrts of sustainability on tangible business outcomes.

As always, make sure to follow the small to midsize business tag here to stay up to date with everything SMB!

1 Comment