How many of you even knew Earth Day was on 22nd April? And even if you did, did you care?
If there is one lesson we will eventually take from Covid, it’s the paranoia that government and business leaders’ now live with: a constant fear of being caught cold by a crisis like this, ever again. This paranoia must spur them to preventative action rather than a reliance on their ability to deliver rapid treatments. Those treatments of the symptoms simply paper over the deepest cracks of the causes – problems that remain unsolved despite all the debt we’ve incurred.
Barring future pandemics and world wars, which seemingly can be treated by throwing extraordinary amounts of money into science and military coffers, the next looming crisis is that of a climate meltdown. This offers the opposite problem – where the only cure is through smart and painful prevention, not quick-fire, after-the-crisis inoculation.
Sustainability must become a native part of businesses, policy, and our day-to-day lives
This means people need to be educated, they actually have to listen and then change their behaviors. No-one really took the threat of nuclear war seriously until the horrors of Hiroshima and Nagasaki were experienced. The world was able to recover from the horrors of ‘limited’ nuclear war, the experiences, hopefully, proving to be preventative for many more decades to come. But there is no second chance if we continue to destroy our planet. There can be no “lessons-learned” when the world runs out of water…. Sadly, our recent study of 150 C-suite executives across the global 2000 shows us that sustainability only ranks fifteenth as a “fit-for-purpose” measure – no change at all from pre-Covid times:
In this vein, we had our roaming story-teller Nischala Murthy Kaushik spend time with analyst Josh Matthews, who spends a lot of time thinking through how we tackle sustainability and climate change, in addition to spending his spare time as a counsellor on Cambridge City Council in the UK…
Nischala Murthy Kaushik (CMO, HFS): Let’s start with the basics, Josh… What is the definition of ‘sustainability,’ and why is it important in 2021?
Josh Matthews (Assoc Research Director, HFS): The best place to start by checking out the UN Sustainable Goals. These 17 Goals cover all the ambitions we should have as a planet, whether its tackling climate change, lifting people out of poverty, restoring and protecting biodiversity, or eliminating inequality. These challenges don’t stand alone—they’re heavily interconnected. These are all challenges we still face in 2021. These are all challenges we’re likely to face for decades to come. There’s so much under the sustainability umbrella—but can broadly be split into environmental, social, and governance (with a financial sustainability element) factors; many (businesses especially) refer to “ESG” as a way of indicating that sustainability is about more than just climate change, and how tightly intertwined all 17 Sustainable Development Goals are.
Nischala: The theme for 2021’s Earth Day (22 April) was “Restore our Earth”. How does the theme of sustainability really help in restoring our Earth?
Josh: There’s a scientific and internationally agreed need (The Paris Agreement) to reach net-zero globally by 2050 to have a chance of avoiding further irreversible global warming and climate and ecosystem breakdown. If we don’t reduce our emissions to net-zero by 2050, we’ll have lost any chance of avoiding global warming above 1.5 degrees (since pre-industrial times). This will not only cause extreme and erratic weather and make more of the planet uninhabitable, but it will also continue to break down natural ecosystems: oceans and reefs, polar regions, jungles and forests, and so many more. Biodiversity will disappear as habitats, and food chains will collapse. Restoring our Earth means avoiding this. But it also means actively improving biodiversity (and the planet in general) from where we are now—not just stopping the harm.
Nischala: Do discussions around sustainability come up in your interactions with clients? what are their top-of-the-mind questions and challenges?
Josh: Yes they do, Nischala, Many enterprises across the globe are committed to sustainability in various forms (for example, become net-zero carbon or committing to a target like 2030) and some demonstrate it through company policy or corporate level programs with a dedicated leader to drive this charter. As we emerge from the COVID-19 pandemic – sustainability and achieving more than just shareholder profit are becoming critically important for enterprise leaders (see Exhibit 1). Many, however, are struggling to translate their intent to action and impact. Many know that their customers are looking for sustainability in the products and services they buy—but still manage to stick with the status quo or not go far enough.
Our conversations with service providers do not fill us with a whole lot of confidence that the majority of enterprises are making the changes they need to make—despite marquee use cases and headline enterprises who have seized the sustainability narrative (Unilever is a good example). There is hope, however, as these same service providers hold the keys to making sustainable transformations happen – as they do in digital transformations. They can bring the strategy and design consulting, implementation, managed services, and technology to help businesses move along a pathway to sustainability.
Nischala: Has the election of Joe Biden as President of the U.S. made an impact, Josh?
Josh: Absolutely. And this is apparent in our service provider and enterprise conversations. There has been progressive regulation promised for some time across the world – and a desire for this from service providers and enterprises who are trying to be leaders in tackling climate change and pioneering all forms of sustainability. Investment in green technologies, infrastructure, jobs, and all manner of routes is beyond welcome – and other countries need to see this as a defining moment – where things change – and sustainability is no longer a future problem. Like enterprises, governments need to nail down roadmaps to decarbonize and reach net-zero. They also need to do the same in tackling all forms of sustainability. Technology and strategy, combined with implementation, need to come together.
Nischala: What trends around technology and innovation are you seeing in the world of sustainability?
Josh: Technology and innovation have two sustainability angles:
Firstly, they can both help businesses, governments, and individuals be more sustainable: AI and analytics (including in consumer apps) can improve decision making and optimization (of energy use, for example, which has a cost and carbon emissions benefit) and combinations of the internet of things (IoT) and cloud platforms can help measuring, monitoring, reporting, and optimizing of emissions. There are so many more examples.
Secondly, technology and innovation come with an associated carbon footprint which must be addressed. The electricity that powers computing and data storage must be decarbonized, and its consumption must be reduced. To address this, companies are sourcing more and more renewable energy to power their datacenters (or even producing it themselves) alongside improving their efficiencies. The supply chains which create technology products must also become more environmentally friendly (the mining of metals for batteries, for example), socially responsible (by eradicating modern slavery, to name only one challenge), and transparent (so that customers can have confidence that the first two points have been met, alongside their other requirements).
Nischala: What is it that large organizations can do to support the case and cause of sustainability actively?
Josh: Sustainability must become native to businesses. It must be an integral part of every decision from the shopfloor up to the CEO’s office. If there’s one concrete action to take away from this, it should be building a roadmap to decarbonize their carbon footprints. Measure your current footprint, and then plan how you’ll reach net-zero by 2050 at the ABSOLUTE LATEST (as far in advance as possible!). This includes your own direct and indirect emissions, but also those throughout your supply chains (often ). For example, direct emissions can be reduced via process optimization and redesign, indirect emissions could be decarbonized by sourcing more renewable electricity, and procurement processes can be adapted to ensure suppliers meet the highest sustainability standards to improve scope 3 supply chain emissions.
Nischala: Are there any specific initiatives that you are doing at HFS towards this cause?
Josh: HFS has been talking about sustainability, and importantly the sustainability services ecosystem, for some time. Businesses and governments know they need to become sustainable—but many don’t know where to start or how to put plans into action. Service providers are the ones who’ll make this change happen—as we’ve seen them do through digital transformation work—through consulting and design, implementation, ongoing management of operations, and technology. The sustainability services ecosystem, however, remains fragmented and poorly understood by providers and enterprises (and governments). Keep watching the HFS Research space as we change this throughout 2021. The sustainability ecosystem needs to be mapped, defined, understood, and coordinated. This must happen soon so that service providers can bring their enterprise clients and partners along on their journeys.
Nischala: What is it that we can do as individuals to support this cause, Josh?
Josh: There’s so much, Nischala – and even small changes aren’t wasted. Some of the most important would be: walking, cycling, and using public transport to cut down on car use (and if possible switching to an electric car, or car-sharing); reducing meat consumption and generally shopping for the most sustainable options (locally sourced, low plastic, etc.); reduce, reuse, and recycle as much as possible; retrofitting homes (although expensive) lowers heating/cooling costs as well as carbon emissions.
Nischala: What are some of the best global online resources for anyone to read if they want to understand more?
Josh: We’ve been sharing plenty of our favorite resources and research over the last week or so (and HFS’ own research, of course!), and obviously so much more is out there. But my top 2 picks would be:
- United Nations (including the Sustainable Development Goals)
- Cambridge Zero (a new policy unit within the University of Cambridge)
Nischala: Thanks for sharing your views and knowledge on this critical topic, Josh! We’re all eager to see our industry taking more action to drive sustainable actions.
HFS analyst Josh Matthews