How does the lack of a sustainability strategy impact your business? And how can EAM technology help you? Let’s explore the possible outcomes of not having a sustainability strategy.
1. Customers leave
People are fed up with companies that disregard how their business practices impact the planet, with the majority willing to pay more to support environmentally friendly alternatives.
The Global Sustainability Study by Simon-Kucher & Partners surveyed 10,000 people across 17 countries to understand why sustainability is increasingly important in purchasing decisions. It turns out that globally, 85% of respondents report shifting their purchase behavior to support sustainable options—even if it costs more.
Not surprisingly, customers expect enterprises to put their money where their mouths are, backing up claims of environmental consciousness with science and hard facts.
For asset-dependent organizations, this means tracking hundreds and even thousands of enterprise assets to report on various environmental outputs, including carbon emissions, air and water pollution, deforestation, waste management, water usage, and many other measurements.
EAM technology helps the planet and the bottom line, connecting diverse components and providing broad oversight of the entire operation. Along with ensuring asset productivity and other traditional business outputs, enterprises can set specific sustainability goals, track performance, and receive real-time alerts when anomalies occur.
Most importantly, EAM technology enables detailed reporting to prove compliance with regulatory and industry standards—incontrovertible proof of the company’s commitment to sustainability.
2. Hiring (and retaining) people is difficult
People want to take pride in their work and their employer, favoring job offers from companies with an established track record in sustainability practices. 51% of people* report that they won’t work for a company that doesn’t have strong social or environmental commitments.
These numbers only increase within younger demographics, with 96% of millennial employees* requiring that their employers take active steps to become more sustainable over time. With millennial employees projected to make up to 75% of the workforce by 2025, it’s clear that enterprises that want to be an employer of choice will need a strong sustainability ethos.
EAM technology delivers hard numbers a company can use to prove its position and performance relative to sustainability. Along with real-time data, EAM tracks performance over time, comparing present-day results with established benchmarks.
3. Investors won’t invest
Socially conscious investors rely on environmental, social, and governance (ESG) standards to gauge a company’s behavior when screening potential investments. If an organization falls short of its ESG commitments, the investment is redirected to businesses with a positive track record and consistent results.
According to PWC research, ESG has become a make-or-break consideration for leading investors globally:
- 49% of investors express willingness to divest from companies that aren’t taking sufficient action on ESG issues
- 59% of investors say lack of action on ESG issues makes it likely they’d vote against an executive pay agreement (a third of investors have already taken this action)
- 79% state that how a company manages ESG risks and opportunities is an important factor in their investment decision-making
From the perspective of sustainability, ESG standards consider how a company safeguards the environment, including corporate policies to address climate change and other factors.
ESG requirements easily integrate into an enterprise’s digital strategy through intelligent EAM data and reporting. Asset-intensive organizations can share detailed reports and data to help investors evaluate potential environmental impacts, including how the company manages these risks.
Corporate reputations are irreparably damaged
When companies ignore or purposely damage the environment, public and regulatory responses are immediate and intense. Especially if the business fails to meet goals to which it has already committed.
Perceived as greenwashing, customers judge falling short on sustainability commitments harshly, negatively impacting how they experience the company’s products and services.
In July 2022, the Harvard Business Review studied 202 publicly traded large US firms, examining goals and actions related to green product innovation (GPI). The study also incorporated customer satisfaction, social responsibility, and accounting and financial data from vetted sources.
The results? Companies perceived to be greenwashing experience a 1.34% drop in their ACSI customer satisfaction score. While this may seem like a small effect, given the narrow range within which most companies compete, even a small change has significant implications for corporate performance.
With EAM technology, enterprises can easily manage asset performance, delivering on stated commitments and adjusting course proactively to stay on track.
If an environmental incident is due to asset failure, EAM technology provides the business with historical and real-time data to help determine how the failure occurred. In scenarios where negligence is not a factor, reputational damage is often mitigated.
Achieve Your Sustainability Goals with EAM Technology
IFS works with enterprises globally, providing flexible, end-to-end asset management capabilities within IFS Cloud to help them set and achieve their ESG goals.
Watch our sustainability webinar or visit the IFS New View on Sustainability web page to learn how IFS Cloud EAM can help your business.
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