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Commitment to action: Creating sustainable enterprises

June 3, 2022

Amitabh Sarkar   

Vice President & Head of Asia Pacific and Japan - Enterprise, Tata Communications

Although sustainability has been scaling up the corporate agenda for over a decade, there is a greater urgency for enterprises to step up their commitment. Ahead of World Environment Day, Amitabh Sarkar, Vice President and Head of Asia Pacific, Tata Communications, discusses how enterprises can be more sustainable with digital technology and greener supply chains.

In the latest Global Risks Report released at the World Economic Forum Davos Agenda 2022, climate action failure is ranked the topmost severe global risk. Furthermore, 97% of business leaders globally highlighted that climate change has negatively impacted their companies.

Though protecting our environment will require everyone’s effort, enterprises are in an optimal position to effect substantial changes. In fact, one of the strongest messages that echoed from the UN Climate Change Conference COP26 is that private organisations can and are impacting climate change. This includes financial services institutions pledging to combat climate change to tech companies’ initiatives to reduce carbon emissions.

While having robust sustainability goals is a definite step in the right direction, the world is already at the tipping point for responding to climate change. As a result, enterprises not only need to act urgently but impactfully too.

Environmental sustainability and digital technology go hand-in-hand

Leveraging digital technology to drive sustainability initiatives has become one of the core areas that many enterprises can feasibly achieve within a short time. Due to the pandemic, most companies already have one foot in the door as they have initiated or accelerated their digital transformation journey. By integrating their sustainability ambitions into their digitalisation efforts, enterprises can make significant strides in the fight against climate change.

One area where digital technology can potentially make an enormous impact is in reducing carbon emissions.

“According to Statista, Asia Pacific’s carbon emissions dropped from nearly 17.18 billion metric tons in 2019 to 16.75 billion metric tons.”

This can be largely attributed to COVID-19 restrictions and the proliferation of remote working. The rise of hybrid working models, coupled with changes in attitudes towards travelling, commuting, and consumption globally, can unlock tremendous opportunities for enterprises to reduce their carbon footprints.

For example, many financial services organisations have established a secure and connected digital workplace to support their remote workforce during the pandemic. By leveraging the digital solutions like delivering enhanced customer services through video calls and other immersive digital experiences. Adopting a ‘work-from-anywhere’ model also does not compromise the quality of enterprises’ customer service. In fact, collaboration tools facilitated took customer engagement a level up during the COVID-led standstill. For instance, few leading retailers offered simulated in-store experiences on virtual platforms to remain relevant to customer needs during the pandemic. This trend continued as customers found the experience even more compelling, convenient, and personalised.

Furthermore, the increasing use of the Internet of Things (IoT), Artificial Intelligence (AI) and machine learning makes it possible for enterprises to monitor energy consumption trends and make more informed decisions to improve energy efficiency.

To add, digital twin technology, which leverages data analytics, AI and machine learning, can enable organisations to predict how processes or systems perform. This allows them to track, manage and adjust energy usage, leading to the carbon emissions reduction. On a broader scale, Ernst and Young reported that digital twins could help lessen carbon emissions within our cities by 50% to100%.

“Today, enterprises have realigned their digital strategy and digitalised their operating models in response to the pandemic and this needs to continuously evolve.”

To handhold enterprises on this journey, the Singapore government recently launched the Enterprise Sustainability Programme (ESP) to support businesses’ sustainability initiatives and deepen their capabilities in this area.

Creating a Greener Supply Chain with Responsible Sourcing

To truly embed sustainability as a core part of their business model, enterprises must find partners and vendors that mirror their own sustainable values and responsible practices. According to McKinsey & Company, up to 90% of an organisation’s environmental impact can come from its supply chain. Therefore, enterprises need to ensure their supply chain continues to be environmentally friendly even as they accelerate their digitalisation efforts.

“Enterprises need to view their technology partners and vendors as an integral part of their business and hold them accountable to the same high standards that they have imposed on themselves.”

Companies should start by assessing each supplier’s compliance with environmental laws and sustainability requirements and implementing processes to regularly evaluate their environmental performance. Sustainability elements need to play a bigger role in selecting suppliers, along with other commercial criteria such as quality and cost.

Additionally, enterprises should consciously source and collaborate with technology providers that deliver low-carbon solutions and services to support their digital transformation journey. Low-carbon products, such as green network appliances, can enable enterprises to lower energy consumption daily. This amounts to significant carbon emission reduction in the long run. For example, according to a carbon value chain assessment carried out from 2019 to 2020, Tata Communications’ low-carbon products and solutions reduced its customers’ carbon emissions by more than 389,300 metric tonnes.

Furthermore, the partners should also have sustainable facilities, such as green data centres, as well as comprehensive methodologies to measure their environmental footprint so that they can continuously work to diminish it.

To make a more meaningful difference to the environment, enterprises must create a stronger link between people, planet, and communities in their business models, and digital technology can provide enterprises with the means to achieve this. As enterprises plan for the future, it is imperative to consider how digital technologies can minimise the cost to the environment and manage their resources more effectively and efficiently. This is key to building a greener, circular future.

To learn more, please read this blog on IoT and digital transformation.