Greater sustainability helps our eco-system – but analysis shows that businesses adopting environmentally optimised technology can significantly improve performance across key metrics.
Far from being an ethical or regulatory overhead, sustainability is actually a business game changer. Those enterprises who understand this are reaping the rewards.
Companies that lead on environmental, social and governance (ESG) factors outperform their competitors, generating operating margins 4.7 times higher than their peers and 2.6 times more value for their shareholders, according to research by Accenture.
The business resilience and adaptability needed to grow during uncertain economic times is in fact incredibly similar to the qualities needed to transition to new sustainable business models.
Add the smarter use of data to this virtuous circle and businesses can satisfy the demands of shareholders and stakeholders, ushering in a new era of business performance, energy efficiency, resource sobriety and laser-like customer-centricity.
There are three ways cloud technology enables smarter data use and drives sustainable transformation:
Harnessing data insights
Enterprises must measure and understand their ESG impact before they can take action. Carrying out the necessary modelling (to calculate CO2 emissions, for example) can be challenging, however. This is due to the intense compute power needed to make sense of structured and unstructured data and also due to a lack of data analytics talent.
Leading cloud technology firms now have the resources to bridge these gaps, capturing and creating ecosystems of data and using artificial intelligence (AI) and machine learning (ML) to transform them into rich actionable insights.
SWISS International Air Lines, part of the Lufthansa Group, adopted this approach. It used Google Cloud and Google Analytics Hub to optimise its operations. As a result, the airline increased efficiency, customer satisfaction and sustainability, saving one million Swiss Francs in just 14 weeks.
“Sustainability is a data problem,” says Justin Keeble, Global Sustainable Director of Google Cloud. “We need data we can trust and we need it at the resolution that we can make informed business decisions – allocating capital, purchasing, operational, product design or putting it in the hands of consumers so they can make better decisions.”
Sustainable business transformation
The pursuit of efficiency and cost effectiveness is also driving sustainable business transformation. Firms are using data to:
- create a clear picture of their suppliers’ environmental impact,
- uncover new ways to improve their own processes,
- reveal business opportunities.
There are numerous examples of this in action, ranging from UPS, which used Google’s Smart Analytics platform to cut fuel consumption by $10 million gallons a year, to Carrefour’s assortment recommendation tool which uses solutions from Google’s AI/ML portfolio to tailor store offerings to local demand, dramatically reducing waste.
“We’re entering a new era of sustainability-driven business transformation,” says Jennifer Werthwein, Sustainability Program Manager, Google. “Companies that embrace sustainability as core to their business will be the ones that move ahead.”
Intelligent infrastructure
Making the switch from on-prem to cloud may seem a difficult cost to justify during uncertain economic times. On closer consideration, however, intelligent infrastructure can reduce overheads, provide new flexibility, trigger innovation and shift budget from CAPEX to OPEX. It can also bake-in greater sustainability, cost effectiveness and resilience.
Google Cloud, for example, enables customers to reduce the carbon footprint of their IT operations by running on a sustainable cloud platform. It also turns insights into smarter choices on where, when and how to run and build IT infrastructure. Google data centres are also twice as energy efficient as a typical data centre and deliver five times more computing power for the same amount of electrical power.
“Meeting the challenge of climate change requires us all to move toward sustainable practices as quickly as possible,” says Jennifer Werthwein, Global Account Executive, Automotive, Google Cloud . “Technology leaders are critical to driving sustainability initiatives – by developing digital infrastructure, services, solutions, but also by utilizing cloud technology to build data platforms to accelerate the sustainable business strategy.”
Sustainability as a performance driver
Rather than being viewed as a cost, sustainability should be seen as a business advantage, closely aligned to, and driving other key enterprise goals. Sustainability helps to futureproof operations and drive real value for organisations. It also leads to operational efficiency, lower costs, less waste, and increases the ability to comply with regulations. Without the smarter use of data, however, none of this is possible. This is because the ability to turn rich data insights into action is key to achieving sustainable change.