Sustainability in Growth Markets

Is an analytical culture necessary to support environmental sustainability efforts in growth markets?

Today, the Earth’s ecological footprint is 23% over capacity.* The growing gap between human demands on the environment and our planet’s ability to meet them necessitates that organizations monitor, and measure their carbon footprint. This is particularly true in high growth countries, where currently, growth is still measured in purely financial terms that do not account for the cost of environmental degradation. After reviewing the national agendas of over 30 growth markets, only 5 (ANZ, China, Austria, and Philippines) cited environmental issues among their top priorities. For growth markets to prioritize sustainability, they must monitor and manage their environmental impact in a way that directly correlates it with profitability. Sustainable practices will only become attractive to growing organizations in these countries if they contain cost cutting or revenue enhancing incentives. But for the relationship between sustainability and profitability to become clearer, sustainable business practices must be just as measurable as the financial gains they produce. If one thing is apparent from the absence of sustainability as a priority item in most of these countries, it is that the limitations of our planet's natural resources have yet to be given the importance they deserve.

To comprehensively measure an organization’s carbon footprint, analytics must be applied across the company’s value chain; extending beyond its operations to those of its suppliers, customers, and even its disposal practices. Existing product life-cycle management software (PLM) is only a partial solution because business leaders use it as a one dimensional “measuring stick”; rarely using it to influence decisions that extend beyond organizational boundaries.

Such all-encompassing carbon footprint measurements require an analytical culture. The pervasive use of analytics throughout a value chain enables a carbon footprint measurement comprehensive enough to correlate with long-term financial performance. Nowhere in the world are such implementations more important than in growth market countries, where the growth in demand for natural resources is expected to increase the fastest.