#12 – You can’t take clean steps with dirty footprints

Although considerable progress has been made, current corporate sustainability and green house gas reporting practices are still suffering from lack of shared standards.

Scope three emission (emissions generated by upstream and downstream suppliers and distributors) often account for the lion share of an enterprise’s CO2-footprint. However, there is no agreed standard as to whether businesses have an obligation to report on them.

Going forward, this will change. As new global standards for sustainability reporting are implemented and emerging technology such as Climate TRACE (which uses satellite data to measure global scope three emissions in real-time) become commonplace, the climate impact of businesses will not only become directly comparable, it will also expand to include the entire product/service value chain, from sourcing to disposal.

To stay in line with tomorrow’s expectations from investors, regulators and society in large; tomorrow’s connected enterprises will need to become experts at vetting the environmental, social and governance (ESG) credentials of partners. For enterprises seeking to take the lead in the transition to a sustainable economy, that will imply going over the supplier-distributer network and continuously making sure to team up with the best. Success relies on making sure that the entire network of partners shares the same level of ambition for key issues like circularity, diversion, inclusion and corporate social responsibility.

3 tips to be prepared

1. Embrace smart technology as an opportunity

Regardless of industry, intelligent automation will enable businesses to radically improve resource efficiency by optimizing operations in real-time. In order to thrive in a net zero economy, tomorrow’s successful connected enterprises should make a habit out of continuously looking for ways of using sensors, data, AI and connectivity to run operations smarter by doing more with less. A quest which for many might not only point in the direction of new partnerships, but also, as in the case of circular- and sharing economies, to whole new business models.

2. Prepare for full transparency

Starting in 2021, companies subject to the new European-wide Non-Financial Reporting Directive will be required to report how sustainable products and services are in relation to the new EU taxonomy guidelines. To stay ahead of the curve, tomorrow’s successful connected enterprises should view this as the first step towards a future where nothing short of full detailed disclosure of sustainable impact will do. By instating a ”zero tolerance for fuzziness” mentality right away, enterprises will be in a better position to continuously identify and act on areas of improvement before they become a liability.

3. Select partners that can meet the demands of tomorrow

As fully transparent reporting on scope-three emissions become the norm, businesses will wake up to the fact that they are only as green as their partners. To succeed in the transition to a net zero economy, tomorrow’s successful connected enterprises will need to ensure that future partners – especially long-term strategic ones – are on board with the plan and share the ambition. Suppliers and contractors that cannot demonstrate a credible plan for how to navigate the transition should be treated with caution, as they are likely to quickly prove a hindrance to future progress.

_____________________________

This article is part of our report: 12 predictions for Tomorrow's Connected Enterprise read the rest of the predictions here:

Tomorrow's Connected Enterprise