Sustainability is a value creator for business and society
Today’s enterprises should no longer choose between doing good in the world and doing better in business. In fact, if there’s anything that our latest Sustainability & Corporate Responsibility report teaches us, it’s that driving positive change in the world helps to create value in business.
Last year, we took a strong step towards integrating sustainability and responsible business into our business strategy. In doing so, we made a statement to our stakeholders that the values of environmental sustainability, digital inclusion and responsible business not only creates impact in society but also contributes to our business performance.
Why do we believe this is the right approach? And how can other enterprises follow suit? I’ll take you through the key arguments below.
If you want to dig deeper, read the latest Sustainability and Corporate Responsibility Report.
The new direction for business
When I look toward my children’s future, I can clearly see that the definition of business is evolving. According to the Edelman Trust Barometer, society at large is losing trust in most institutions. Earlier this year, the World Economic Forum Annual Meeting in Davos introduced a renewed manifesto for stakeholder capitalism which states that, by focusing on stakeholders across the value chain rather than just shareholders, a company have a real impact in changing the world. This is further indication that business can and must play a role in restoring that trust.
I work for a company which has Swedish roots and that ethos of inclusivity and long-term thinking is reflected across our operations globally. The technology we deploy is the most ubiquitous in human history and has transformed sectors of society for well over a century. Throughout our history, we have approached technology development with an understanding of the responsibility it entails.
There is an ongoing shift in the demands and behaviors of customers, consumers, employees, partners, governments, investors and other stakeholders. This has incrementally raised the pressure on companies to act with integrity and in a way which benefits wider society.
However, even beyond these behavioral shifts, there are also clear economic benefits which sustainable practice can inject in today’s business.
Firstly, it can offer a foundation for more efficient operations, and thereby lower the overall cost of operations. And secondly, addressing global challenges like climate change can catalyze innovation that differentiate business models and portfolio development. For example, Ericsson’s focus on product energy performance is supporting our customers to reduce their energy use, reduce their climate impacts and reduce the total cost of ownership across their networks. We call it technology leadership with purpose.
Finding the business value
So how can enterprises adapt to this changing reality? And where can the value be realized?
To facilitate sustainable growth, today’s business must stand for positive impact. For example, I believe in future, it will be difficult to remain a viable brand, whether as a supplier, partner, employer, or with consumers if your business model in some way exacerbated inequality or exploited natural or other resources.
As a business, your starting point should always be to look first at your own operations – who you are as a company, how you run your business, how you transport product, how you travel, how you run things. Time and again, we see that doing the right thing and taking responsibility for actions across the value chain can drive long-term business success.
Today there is a collective urgency across all industries to meet targets of halving global greenhouse gas emissions every decade starting now. Business must play a definitive role if we are to overcome those challenges, and to that end, Ericsson along with other climate leaders set out the Exponential Climate Action Roadmap to show what can be done across sectors.
In order to help companies of any size take climate action – including those in our supply chain, we recently joined with industry and academic partners to launch the 1.5°C Business Playbook, a framework to enable small to medium enterprises to identify value opportunities in their own business and prepare for a transition to this new economy.
In our own approach, this all comes back to our three pillars of responsible business, environmental sustainability and digital inclusion.
The role of responsible business should serve as the foundation of today’s enterprise. Not only can it allow a company to operate their business as well as they possibly can, but it can build trust among stakeholders.
Technology today is deeply rooted across society. As such, private sector enterprise has a responsibility not only to be legally compliant but to also drive a proactive agenda in areas such as human rights, anti-corruption, occupational health and safety, and responsible sourcing.
The forecasts in our latest Mobility Report point to a fourfold growth in data traffic by 2025. However, despite this tremendous growth, companies in the technology sector can reduce its own emissions in line with a 1.5 degree trajectory in the Exponential Climate Action Roadmap.
In this pursuit, digital technologies offer the potential to accelerate climate action more profoundly than any other solution and can be a real value differentiator for our business. The deployment of energy-efficient 5G technologies, the Internet of Things (IoT) and artificial intelligence (AI) can offer new ways forward within energy, manufacturing, agriculture and land use, buildings, services, transportation and traffic management.
Mobile broadband networks are one of the most ubiquitous technologies in the history of mankind. They offer unprecedented opportunities to improve social inclusion, economic growth and productivity globally.
Bridging the digital divide, by enabling access to technology solutions and skilling communities to ensure the benefits of communication are available and enjoyed by all, are fundamental to our success as a business, employer and member of society. To amplify this value, we engage with stakeholders through partnerships and employee programs such as Connect to Learn and Ericsson Response, to drive improvement of digital inclusion across society.
By deploying our technology for all, we are contributing to a greater societal value. Our joint research project with Imperial College in London is one example. Here, we learned that, on average, a 10 percent increase in the mobile broadband adoption ratio causes a 0.8 percent increase in GDP. The cooperation continues today with a focus on the correlation between IoT deployment and productivity as well as GDP.
Committed to leading by example
At Ericsson, we’ve been ahead of the corporate sustainability curve for many decades. At the same time, we have been driving business transformation, with a focus on creating value: such as the way we run our company in terms of efficient use of resources and responsible business practices, how we develop and deliver our portfolio and services, and how we engage our stakeholders across the value chain.
We’re bringing this mindset to 5G and to our customers. For example, our 5G radios are already approximately five times more energy efficient (for the same data transferred) than our 4G portfolio (on a baseline of 2017). We also achieved a 32 percent energy saving from delivered radio systems compared to our legacy portfolio (on a baseline of 2016).
We also want to lead by example, by showing how responsible business and sustainability will be critical to ensuring business performance in the long term.
As testament to this approach, we have made it our goal to be carbon neutral in our own operations (fleet vehicles and facility energy usage) by 2030; to reduce occupational health and safety major incidents by a minimum of 30 percent by 2022; and to strengthen and enhance our Ethics and Compliance Program to develop a best in class Anti-Corruption Compliance Program by 2022.
Read our latest Sustainability and Corporate Responsibility Report to learn more about the shared opportunities and challenges in the wider ICT sector.
Find out how we helping to solve global challenges through technology in our 2019 Technology for Good Impact Report.