The imperative for companies to adopt sustainable practices is being driven not only by ethical considerations but also by the growing recognition that companies can generate business value from sustainable practices. Take the growing consumer interest in sustainable products (87% say they would purchase a product with a social and environmental benefit and 34% are willing to pay more for sustainable products and services) or the mounting evidence correlating resource efficiency with financial performance (reducing resource costs can improve a companies operating profits by up to 60% and, more widely, 90% of studies conclude that good ESG (Environmental, Social, Governance) standards lower the cost of capital).
The latter can be attributed to sustainable practices leading to reduced energy consumption, waste, and resource usage. This translates into significant cost savings over time, making your operations more efficient and profitable. Sustainability initiatives can help mitigate risks - such as climate change, supply chain disruptions, and social issues - and make your company more resilient in the face of unexpected challenges. Then there is tightening environmental regulations from government and regulatory bodies, and the resulting fines and reputational damage for non-compliance.
The collective academic and business wisdom appears to point to one clear finding - having a strong environmental proposition is good for business performance. But building effective ESG practices goes well beyond greenwashing or corporate grandstanding. Rather it requires a top-down approach, spearheaded by leadership, and embraced by all stakeholders.
As executives consider how to embed sustainability across organisational activities, many will find it helpful to factor technology solutions like cloud ERP (Enterprise Resource Planning) into their broader plans.
How NetSuite cloud ERP software can help
Starting with the infrastructure itself, NetSuite uses a cloud delivery model that removes the need for customers to maintain their own servers and server rooms, reducing energy and power costs by as much as $100,000 per year. When it comes to electricity consumption specifically, NetSuite saves its more than 36,000 customers nearly 600 million kilowatt-hours (kWh) per year. That is roughly the average annual electricity consumption of 56,000 homes. The company also eliminates the production of more than 423,000 metric tons of carbon dioxide per year.
Supply chain visibility and efficiency
The supply chain is responsible for the bulk of an organisation’s environmental impact (McKinsey put it at more than 90% of most consumer goods companies’ environmental impact). Therefore, making changes to the supply chain rather than other business operations will have the most impact. NetSuite supports both conventional supply chain management’s goal of speed, cost and reliability of operations, and sustainability's s goals of upholding environmental and societal values. Utilising the supply chain management capabilities, you can prioritise efficiency and make informed decisions about sourcing, production, inventory management and transportation that aligns with both. For example, you can minimise waste and realise major time and cost savings by optimising inventory levels and reducing excess or obsolete stock. Or use intelligence and pre-defined rules to ensure products are sent from the closest distribution centre as opposed to one on the other side of the country.
SuiteApps to support environmental goals
NetSuite provides a comprehensive view of your company's data, which can include environmental and social metrics when using NetSuite extensions and apps. For example, customers can choose to connect with applications that automate the benchmarking, tracking, and reporting on Scope 1, 2, 3 emissions, carbon credits, carbon offsets, sustainability and ESG initiatives. With accurate data on an organisation's environmental and social impact, it is far easier to identify areas where sustainability improvements are needed and set clear goals to make them happen.
Steps to achieving sustainability
Start by conducting a comprehensive assessment of your current environmental and social impact. Identify key performance indicators (KPIs) that align with your sustainability goals.
Set clear, measurable sustainability goals for your organisation, ensuring they are specific, realistic, and time bound.
Ensure that sustainability considerations are integrated into your company's overall strategy, from product design to procurement to operations.
Training and engagement
Train employees on sustainable practices and engage them in your sustainability journey by, for example, encouraging innovative ideas from your team.
Regularly monitor and evaluate your progress toward sustainability goals. Use NetSuite's reporting tools or SuiteApps to track and communicate your achievements.
Sustainability is fast becoming both a business imperative and ethical responsibility. As a business leader, embracing sustainability not only benefits the planet and society but will also ensure the long-term success and resilience of your company. Leveraging technology like NetSuite equips companies with the necessary tools to make environmentally responsible decisions while benefiting their overall business through cost savings, increased efficiency, and enhanced reputation among environmentally conscious consumers.