UK businesses suffer ‘sustainability headache’ in planning eco-friendly futures

Businesses in the United Kingdom are well aware of the environmental challenges facing us, but aligning the wish to do better and actually changing corporate practices is no small feat. 

That’s according to a new study published on Thursday by SAP, which says that 35% of UK executives and leaders struggle to “align their eco-commitments with their overall business strategy.”

The research is based on a 7000 participant-strong survey worldwide, including 400 companies in the UK. 

England, in particular, is currently experiencing a wave of protests in relation to environmental change. The Extinction Rebellion movement has been active in London and beyond, whereas in recent weeks, Insulate Britain has forced traffic to come to a standstill on motorways. 

While Prince Charles says that he understands the “frustration” of climate change protesters, there are other ways that the general public can make their thoughts on sustainability known — such as by voting with their feet and their wallets. 

According to the survey, customer demand for improved transparency and sustainable practices is the key trigger for change, cited by 52% of participants. In total, 48% of respondents said the opportunity for future revenue and growth was the main motivational factor. 

However, 35% are not sure how to effectively embed sustainability into business processes and IT systems. 

“Despite the growing public awareness of sustainability issues, and an opportunity to lead regenerative business strategies, a variety of barriers are leading to inaction amongst UK businesses, and therefore damaging progress,” SAP says. 

The company describes the shift from awareness to application as a “sustainability headache,” and this problem starts with data quality. 

Without the right information, businesses can’t create key performance indicators (KPIs) to measure the impact of sustainability changes. According to SAP’s research, 28% of UK business leaders do not feel high-quality data is collected enough, 23% believe it is often out of scope, and 21% say there is a lack of transparency around collection and analysis. In total, 12% lack any confidence in this data at all. 

At a SAP roundtable on Thursday, Professor Peter Hopkinson from the University of Exeter said that to create a circular economy — in which waste is all but eliminated and we keep materials in circulation and in use for as long as possible — a “bridge” needs to be established between data and business. 

While sustainability figures are available on a national level, such as through the UK Office for National Statistics (ONS), there are often disconnects between data sets and what is actually happening in value chains, leading to disparity and a failure to construct true-value KPIs. 

In total, 26% of UK businesses report that they use their own in-house metrics.

Hopkinson says that it is important for businesses to not adopt “plastic straw syndrome” — in which gestures are made to be more environmentally friendly by businesses, but changes are simply cherry-picked to fit a narrative.

The academic says that a “systematic” approach is required, and this requires the creation of standardized KPIs and for businesses to use similar measurements for sustainability. 

SAP says that if business leaders can learn to take advantage of the circular economy and sustainability drives, the ‘green’ opportunity could be worth as much as $36.6 billion by 2025.

“We have a true obligation to the planet,” commented Michiel Verhoeven, Managing Director of SAP UKI. “We’re running out of time on our net-zero goals, collectively, and we need to change our processes quickly.”

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