Results from a recent study conducted by SAP have revealed that organisations in the Asia Pacific and Japan (APJ) are increasingly viewing sustainability initiatives as a strategic priority. This shift in perspective is reportedly directly influencing these businesses' overall performance and driving investment decisions.
According to the study, over half (51%) of APJ businesses intend to increase their investment in sustainability within the next three years. This figure indicates a marked rise from last year's 39%, suggesting an accelerated adoption of sustainable business practices in the region's corporate sphere.
However, data acquired in the study also presents that 36% of APJ businesses continue to face challenges in justifying the return on investment for sustainability initiatives.
The researchers at SAP discovered that an impressive 71% of businesses within the APJ perceive a direct correlation between sustainability and their competitiveness in the market. Furthermore, 68% of businesses analysed in the study linked sustainability with the profitability of their organisation.
In light of these figures, an increasing number of APJ businesses are considering sustainability as integral to their operations.
Gina McNamara, Regional Chief Financial Officer, SAP Asia Pacific & Japan, asserts that sustainability and financial performance of a business are closely intertwined.
"Sustainability can no longer be considered separately to the wider financial performance of the business because it is increasingly clear that more sustainable organisations are more successful organisations," McNamara shared.
Despite the substantial advancements being made, hurdles persist. Alongside the significant challenge of substantiating return on investment, APJ businesses are also confronted with the lack of distinct environmental impact strategies (36%), the uncertainty stirred by COVID-19 (34%), and a prevalent lack of expertise (33%).
Exploiting the value of sustainability data is a primary focus for APJ businesses looking to substantiate their return on investment in sustainability. A small 23% indicated contentment with the quality of the sustainability data they have available, reflecting a decrease from 27% the previous year.
No longer can our decisions to better both our planet and businesses be cast into doubt due to incomplete sustainability data," cautioned McNamara. "The key is to record and report accurate, granular, and auditable sustainability data and integrate it with financial data to make the right business decisions."
About three quarters (75%) of APJ businesses presently leverage sustainability data to guide strategic and operational decision-making. Also, a substantial proportion (72%) require their suppliers to provide sustainability data and 69% similarly demand environmental impact data from associate entities, such as logistics and fulfilment partners.
"The benefits of integrating sustainability data and outcomes into the core business are clear," McNamara concluded. She insists that more work remains to be done and recomends collaboration with tech partners like SAP to aid business in accurately recording sustainability data, which would ultimately drive competitiveness, profit, and revenue.