Companies with more mature sustainability programs enjoy higher profit margins, generally a full 2%
Date: Tue, 04/07/2009 - 18:03 Source: Atos press department
Proactive environmental strategies deliver business value through cost reduction, new revenue streams and improved competitive positioning while at the same time reducing the environmental footprint
European research launched by Atos Origin, an international information technology services company, and IDC, a leading global provider of market intelligence reveals that companies with more mature sustainability programs enjoy higher profit margins, generally a full 2% or higher than industry margins. The research based on a survey of 165 senior executives in the manufacturing and retail sectors clearly demonstrates that the business case for environmental excellence is real. Even in the current economic climate, the survey indicates that companies are planning to stay the course as they expect to reap above average returns as a result of their sustainability efforts. Information technology is identified as a key tool for driving sustainable initiatives with 70% of those interviewed saying that IT will play a role in reducing their businesses’ environmental impact.
Other findings include:
• 46% companies are running or planning to run environmental projects that are justified by cost reduction.
• About 25% of companies have now moved from reactive approaches to proactive environmental excellence strategies thus showing an increasing level of maturity in their path towards environmental excellence
• 5% of businesses have cross-functional teams highlighting that sustainability ownership is still very siloed
“Organizations, which embed environmental sustainability at the core of their strategy and operations, future-proof their organization in these uncertain times,” declares Thierry Breton, CEO of Atos Origin. ”Atos Origin is committed to implement sustainable best practices throughout its organization and in its business and the Group is focused on accompanying its clients on their journey toward environmental excellence.”
The report highlights the following key conclusions:
• Sustainable organisations reap business benefits
Sustainable initiatives deliver immediate business impact - lower costs, higher revenues, more efficient assets, competitive advantage; and also maximise brand, customer and investor value, whilst simultaneously contributing to environmental sustainability.
• To succeed organisations must walk the talk
Sustainability must be embedded within the very DNA of an organisation so that the business model becomes future-proofed. A Maturity Model can be used to evaluate the existing progress efforts. Most companies are anchored in a state of responding to external requirements such as regulatory compliance. However the report’s findings show that leading companies are now moving from reactive approaches to proactive environmental excellence strategies.
• Operational transformation necessary to achieve competitive advantage
The transition toward an optimized environmental strategy entails a crucial "zone of transformation", where companies focus on operational transformation, including improving the full product life cycle, from product design to end of life. Those who do not making an effort to move through this stage, risk putting themselves in a position of competitive disadvantage.
• IT is instrumental in reducing businesses’ carbon footprint
Effectively implementing operational transformation requires consideration of the people, process and technology. Technology has a key role to play, especially in the areas of supply network modelling and optimization, procurement and supplier relationship management and product life-cycle management.
The report focuses on the manufacturing and retail sectors and includes a survey of senior managers and executives of 165 European companies and in-depth interviews with 12 European companies and industry associations. It is expected to serve as a benchmark for European companies to see what sustainability strategy best fits their situation. A proper sustainable strategy is an indispensable tool in order to survive in today’s market conditions.