AS we reach climate tipping points and global temperatures rise, consumers are looking to the businesses they interact with for help to do the right thing. The changing regulatory environment is also forcing hands. Investments are being made in decarbonization and offsetting emissions, in circular business models and sustainable and ethical supply chains.
Businesses that are focused on finding environmentally-favorable solutions are seeing greater business efficiency, profit, and growth. Understanding your operating model and how the various layers interact is key to unlocking long lasting, impactful change for your business, your people and the planet.
Confronting climate change. Customers want to interact with environmentally responsible businesses that are working in alignment with their values and helping them to play their part. We also know that to stay in business we need to turn a profit.
Buying in to change. Whether you have been an early adopter, a market leader or have been forced to react, it is likely by now that you will have some form of sustainability activity underway—a business continuity plan and some level of investment to improve your environmental standing perhaps.
Understanding how all six components of your Operating Model layers relate to each other is key to leading the way on sustainability and ensuring real impact and returns on our investments are realized.
Service delivery layer—partnerships are key. The location and means by which your products and services get to market is arguably the biggest area for opportunity. As consumers themselves, businesses rely on other players to be environmentally responsible and ethical as their brands are interlinked.
People and culture—it takes a village. Sustainability and social good becomes a collective responsibility. The second leap to a regenerative business model is “how can I do more good.” The emphasis shifts to long term value rather than short term gain. Transparent and demonstratable values, strategies, and goals related to increased sustainability and climate considerations are also evolving as a key factor in talent attraction and retention. The relationship between sustainability and climate considerations and the recruitment and retention of top talent is increasingly being regarded as more than a challenge—it’s a key business risk.
Governance—the rise of the sustainability manager. The time is now to think beyond disclosure and ensure you have a license to operate. For those with limited resources, business networks can plug gaps and first movers will be at an advantage. If you can support your sustainability leaders and staff to drive change in line with your strategy and goals, you are more likely to remain future focused, protecting and strengthening the resilience of your business and aligning your offerings to support a position of growth.
Performance insights—what gets measured gets done. It is a no brainer that the right incentives are needed to drive the right behaviors from within your organization and your partners across the supply chain. Be clear about the outcomes you want to drive and what takes priority to help raise and resolve conflicts effectively. Make sure goals don’t become their own individual “tick boxes” and processes and technology are in place to enable you to celebrate, communicate and build on your success.
Process and technology sustainability pays if you do it right. The core principles of lean manufacturing and process improvement have been around for years. By identifying and removing waste, you can focus only on what adds value. By focusing on what is seen as value, to your customers and your business, you can run a business that is more efficient and less costly.
Focusing on sustainability can make your business more efficient to run and help you achieve a better bottom-line so you can invest sustainably and ethically for future generations.
In addition to lean processes, creativity is key to solving business challenges. Your investment in people and culture needs to be complemented by processes and technology that enable opportunities to be identified and acted on in the most efficient way.
For first mover advantage, ideas need to be well executed. Over time, the more people demanding sustainable ways of working will bring down costs for all.
KPMG’s Innovation Summit in the Philippines on July 20, July 21, July 26 and July 27, 2022, will feature innovation stories from stakeholders with an emphasis on sustainability, governance and technology, and will take place alongside the firm’s internal Ideation Challenge focusing on promoting ESG initiatives. Registration is free.
The excerpt was taken from the KPMG Thought Leadership publication: https://assets.kpmg/content/dam/kpmg/nz/pdf/2022/06/Unlocking%20impactful%20change