New SAP Study Shows Sustainability Mindsets Shifting

As world leaders gather for COP27 in Egypt’s Sharm El-Sheikh this week, a new SAP Insights survey indicates that businesses in the Middle East and around the world are increasingly seeing the imperative of adopting a sustainability strategy.

Top motivators cited remain competitive and profitable, alongside growing pressure from customers.

The new SAP Wave 2 global sustainability survey – which builds on the results of last year’s inaugural survey as well as recent collaborative research with Oxford Economics – collected data from 6,669 business leaders across 29 industries and 40 countries from regions including the Middle East.

It was found that more than 60% of business leaders recognized that sustainability has a moderate or strong effect on their long-term competitiveness and profitability.

In addition, customer demand as a sustainability motivator has increased sevenfold in 2022 over the inaugural 2021 survey.

Sergio Maccotta, Senior Vice President, Middle East South, SAP, commented: “The survey found an impressive shift in the importance afforded to sustainability strategies in terms of both perceived value and investment.

"For example, almost 90% of businesses reported that sustainability informs their business decisions.

"Moreover, despite persistent global supply chain disruptions, labor shortages, and inflation, the percentage of businesses investing in the environment for the first time has increased fivefold since 2021.”

Maccotta adds that the survey found 75% of business leaders polled said they would either increase or maintain their current levels of investment. Of those planning to increase investments, 80% were intending to boost spending by more than 10%.

Despite these and other positive findings, the survey indicated that data quality appears to be a challenge for many businesses. Maccotta says: “Although respondents in 2022 were more likely to be satisfied with their environmental sustainability data than they were last year, there is still a long way to go."

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Only 23% of businesses are completely satisfied with their data, the rest point to gaps in the sources, quality, and scope of their data as their top dissatisfactions.

This is one of the reasons SAP focuses on incorporating sustainability metrics into all businesses processes when designing our solutions, in addition to having solutions dedicated solely to sustainability measurements and analysis.”

Lessons from Leaders: 5 Steps to Jump-Start Sustainability Initiatives

Looking to the future, Maccotta says businesses that are facing challenges or growing pains in their sustainability efforts can seek inspiration from the strategies used by environmental leaders.

Here he is referring to a small group of environmental leaders identified through a study undertaken jointly by SAP and Oxford Economics in mid-2022, who represented around 9% of the 2,000 business leaders surveyed.

Business leaders were defined by traits such as setting clear expectations at the strategic level, applying the transformative power of technology and data management and engaging with important audiences such as employees, supply chain partners and policymakers.

The Oxford Economics and SAP study found key challenges emerging where companies could focus to improve their sustainability results in order to move into the environmental leaders category. Efforts to address those concerns fall into five core areas:

Begin with executive sponsorship. Sustainability efforts should start with setting an explicit plan that is communicated and emphasized throughout the organization.

Drive clear, consistent communications. While sustainability efforts begin at the top, the vision must be turned into action by employees. Connecting key teams with clear goals is important to push greater sustainability performance.

Integrate processes, technologies and data. Most businesses have not embedded sustainability into their core strategies, leading to disconnected technologies that double count, prevent strategic planning and leave financial and nonfinancial information disconnected.

Unifying these assets provides visibility into progress and performance.

Extend sustainable practices to customers, partners and suppliers. Energy providers are a key component of sustainability practices, but more than one third of respondents in the Oxford Economics-SAP study did not view using sustainable energy providers as critical to their carbon-reduction goals (36%).

They also did not impose the same requirements on their partners that they put on themselves. Sustainability is a team sport that requires participation across the supply chain.

Understand that data is critical. Capturing and analyzing data provides insight into resources and efficiency. It enables the organization to measure outcomes and raises the flag when improvements are needed. This key component is an area ripe for innovation across industries.

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