Did you know:

High-income countries leave a larger environmental footprint compared to low-income countries.

• In fact, the material footprint per capita in high-income countries is 10 times that of low- income countries.  Despite calls for a phase-out, fossil fuel subsidies return and nearly doubled, triggered by global crises.

More than 600 million people worldwide are projected to face hunger in 2030, and 1 in 3 people, worldwide, struggle with moderate to severe food insecurity.

• In addition, malnutrition persists worldwide, jeopardizing children’s well-being and future development.

The world will exceed 1.5° C by 2035 and faces a 2.5° C warming by 2100. 

• As a result, highly vulnerable regions experience 15x higher mortality rates from disasters compared to very low vulnerability regions.

While each of these statistics are staggering, they are directly correlated to one of the 17 UN Sustainable Development goals – Responsible Consumption and Production, Zero Hunger, and Climate Action, respectively.

As these goals are being pushed through targets, events, publications, and actions, we’ve come to realize that there is an unbalanced scale, in terms of sustainability.  The sheer demand for social responsibility by corporations is exponentially growing as investors, consumers, and regulators are eagerly pushing for reformed change.  In today’s world, sustainability isn’t just about going green.  People – like the environment – are affected by business decisions, and there is more than what meets the eye with sustainability; in fact, there’s a human face.

The Unbalanced Scale of Sustainability

Unbeknownst to most, there is a deep-rooted connection between sustainability efforts and systemic inequality, as inequality has a direct impact on business performance, limiting productivity and innovation, constraining consumer spending and growth, destabilizing supply chains, and triggering political instability.  While the outcomes seem daunting, fortunately, inequality is not a fact of nature, but a product of our systems, which is within our control.

To reduce inequality and provide an even playing ground for companies and consumers, alike, businesses need to take ownership of their essential role.  But, the biggest question is… how do they begin?

At this year’s SAP Sapphire event, Alicia Lenze, SAP’s Global Head of Sustainability Marketing, mentions that “leveling the playing field for all leading companies is a major first step to correcting the imbalance of the scale.  They can continue and maximize on these efforts by ensuring there are equal opportunities and better outcomes available for all.  But, in addition, businesses must push for a more holistic and interconnected agenda, thus ensuring responsible business conduct and mitigating systemic and business risks.  Through their Environmental, Social, and Governance (ESG) goals, companies now have the power to become the driver for long-term, sustainable economic growth.”

Social’s Growing Dominance in ESG Goals

As companies continue to shift and focus on their environmental and ecological footprint, the rise of the ESG agenda within companies’ business strategies is seeing exponential growth.  However, as much as there is an imbalance in sustainability, there’s just as much of an imbalance in the focus on its three major pillars – Environmental, Social, and Governance.  In many cases, Environmental and Governance often take center stage, due to their tangible business benefits, however, we are now seeing an increasing focus from consumers, employees, and investors on the reinforced action for the S, or ‘Social’, pillar within ESG goals.

Courtney Holm, Vice President of Sustainable Future at Capgemini, along with Lanze, mention that “companies can begin this journey by respecting human rights throughout their business value chain and putting respect for human dignity at the center of how business gets done.  From inhumane working conditions to child labor to lack of supply chain transparency, businesses have a responsibility to conduct due diligence to identify, mitigate, and account for how they address their adverse human rights impacts. The responsibility goes beyond the company’s four walls, and, for example, includes your suppliers and their workers in the entire value chain.”

With much at stake with their strategic decisions, companies are investing in more than just their people, their investing in their technology.

Sustainability and Software’s Connection

Technology is a forceful enabler of scale and impact and must be part of the equation to succeed.  It’s become critical that our business systems can deliver the processes and functionality to manage the increasing requirements around ethical sourcing and comply with human rights due diligence to ensure decent work, reduce inequalities, and mitigate risks.  In a recent Capgemini video, Holm states that ‘technology and software is an enabling ecosystem for driving sustainable change inside organizations.’   She’s right – technology can deliver more than just business results, it delivers:

• the needed trust and business accountability,
• enhance an organizations’ ability to identify, prevent, and mitigate human rights risks,
• connect stakeholders across an integrated value chain, and
• enable transparency and accessibility across the complexity of global human- and labor rights regulations and standards.

Through solutions like SAP Business Network Supply Chain Collaboration, SAP Sustainability Data Exchange, SAP Sustainability Control Tower, and Ariba Supplier Risk Management, businesses now have the same flow of accountability, visibility, and traceability to conduct responsible business.

Sustainability’s Bright Future

While embarking on a sustainability journey can seem daunting, there is a sense of optimism, as companies can now be well-equipped to not only change how they conduct business but do it in a way that is beneficial to the livelihood of our society.  The push for accountability, transparency, and visibility into a company’s value chain has opened doors for a digitalized way of operating – one that embraces open dialogue and supports the evolution of social sustainability.   It’s a future I, for one, am excited to see.

To learn more about how to get on the path to a Risk Resilient and Sustainable supply chain, download the Oxford Economics Research.