When the European Commission back in 2019 officially launched its Green Deal Initiative, plans were to guarantee a safe, green, and digital transition to all of the EU. The ambitious targets are to make the EU the first carbon-neutral continent, reaching net-zero emissions by 2050.
Ensuring efficient use of resources in Europe calls for efforts to transform our production and consumption systems, massively rethinking how we do business and value the goods, services, and resources on which we depend. Companies play a crucial role in this: they have the power to make strategic changes to address societal issues and preserve the global environment.
Transforming a traditional business into a sustainable one is an urgent task to improve decision-making, positively impact the environment and achieve equitable and sustained economic growth. To this end, two practical ways in which companies from the private and public sectors can incorporate sustainability into business are:
- Transitioning into a double materiality model;
- Incorporating a circular economy system.
Develop a double-materiality business model
Companies should transact to a double-materiality business model, which takes into consideration not only the impacts of the environment on the company but also the impacts of the company on the environment. Furthermore, double-materiality requires prioritizing aspects such as biodiversity, the sustainability of supply chains, and the social effects caused by a company’s activities. The double-materiality business model makes it possible in the long term to achieve sustainable economic growth and foster companies’ longevity while generating a social impact that is in harmony with natural resources. If you are looking for a place to start, digital tools can be an asset in this sense. Habität, a tool by NTT DATA, was created to monitor companies’ use of workplaces, promoting sustainability and cost-efficiency. As a result, the IT solution can help a company’s footprint on the environment become smaller and lighter while ensuring that the business becomes less vulnerable to climate impacts.
Switch to a circular economy’s business system
Companies have to change the traditional production model toward a circular economy model, which makes it possible to generate an environmentally responsible business. To achieve this, it is necessary to shift from unsustainable resource production, consumption and disposal patterns to sustainable waste reduction, reuse, and recycling practices. The benefits of adopting a circular economic model range from boosting Europe’s economic growth (+0.5% of GDP) to creating 700.000 new jobs by 2030. “Companies using digital technologies to support their sustainability objectives and circular economy initiatives will have an enormous competitive advantage”, says Cristina Calderón Iglesias, head of Green Deal at International Organizations at NTT DATA. “As with any other innovation, it comes with an investment, but building a successful circular business model will reduce cost, generate superior margins and build resilience, all while benefitting the environment”.
Profit from sustainability
Transitioning from a business-as-usual model to a sustainable one involves incorporating metrics that assess nature's contribution to the business. This will provide companies with a holistic perspective that considers environmental, ecological, and social costs in the companies' production and consumption costs. It is time for companies to create a safe operating space in which financial, social, and natural factors are integrated into an operational model whose ultimate goal is to create a sustainable business model that contributes to achieving a climate-neutral society. Although the commitment required of companies is enormous, in the long run, it ensures the company's adaptation and sustained growth in the face of an increasingly demanding but opportunity-rich market.
If you are interested in learning more about transitioning from business as usual to sustainable business, read the full report here.