Environmentally forward companies invest more in digital use-cases!

Sustainability is among the most important levers that companies need to consider for a comprehensively successful business. While initial drivers for digitalization and cellular connectivity are often related to increased efficiency and improved customer satisfaction, decision-makers across industries recognize that the true long-term value lies in the sustainability triple-bottom line. In our first report in this research, it is highlighted that the importance of social sustainability was acknowledged by decision-makers. This showcases the recognition of the triple-bottom line perspective, suggesting that environmental issues are not the only concern when discussing sustainability. The  McKinsey report “Achieving sustainable profitable growth with ESG” claim that companies committed to sustainability initiatives tend to have higher financial performance, driven by factors such as cost savings, enhanced brand reputation, and access to new markets.

In this study, the above-mentioned link between sustainability and financial performance is also clearly visible. Across the six studied digital use-cases, sustainability front runners are much more likely to invest heavily in these use-cases than their sustainability laggard counterparts, see figure 8. There are more than 4 times as many sustainability front runner companies that invest more than 50 percent of their IS/IT budget in these use-cases, than amongst the sustainability laggards!

Figure 8: Share of decision-makers that state their companies´ current use-case investment makes up more than 50 percent of the total IS/IT budget across two groups of companies; sustainability-laggards and front runners.

Sustainability, profitability and digitalization go hand in hand. Enterprise decision-makers see the need to include sustainability in their strategy to create a positive impact and reduce risk to the environment and employees. At the same time, these sustainability related investments are almost always benchmarked against other investments, and thus subjected to the same financial scrutiny.

It is therefore rather interesting that, on an overall level, no less than 75% of decision-makers in financially successful companies completely agree that their company is environmentally sustainable, while less than half in non-successful ones say the same thing.

More specifically, as many as 74% of decision-makers in financially successful companies say they always minimize their waste, but amongst the less financially successful companies it is only half that do it.

A similar pattern can also be seen with regards to putting efforts into energy consumption reductions, where financially successful companies are more likely to see the reduction of energy consumption as well as the decreased commuting as key sustainability benefits of increasing usage of the studied digital use-cases than less financially successful companies.

Today 65 percent of decision-makers say their respective companies always, or almost always perform ESG (Environmental, Social, Governmental) reporting, and only 2 percent say they never, or almost never do it. This indicates that the importance of sustainability reporting is increasing. Additionally, when asked what areas their respective companies would invest in, should additional funding become available, investments in both social and environmental sustainability enhancements were listed amongst the top 5. Roughly 8 in 10 decision-makers mention both employee training and environmental initiatives as preferred areas of investments. One would perhaps think that the interest to invest decreases amongst those that have come the furthest – but that is not the case. In fact, over 9 in 10 decision-makers in the most sustainable companies are stating that they will invest in sustainability and environmental initiatives in case of additional budget.

It is safe to conclude that the most environmentally sustainable companies, guided by their long-term vision, are taking the lead in digital use-case investments.