What Is Corporate Sustainability?
Despite surging investor interest, surprisingly few companies are making real progress towards their environmental, social, and governance (ESG) goals. That is, if they even have initiatives in place. Taking ESG practices seriously could set your organization apart from the pack.
ESG initiatives matter — this type of corporate sustainability practice is a pathway to generating long-term value growth. And a trusted Business Spend Management (BSM) platform can help you implement ESG initiatives cost-efficiently so you can make every dollar matter.
Driving the change: A market shift toward sustainability
Investors care about ESG. If you don't adjust and adapt to the shift in investor priorities toward ESG, you stand to lose market value and funding opportunities. It's not just in the business world — consumer attitudes are also shifting towards a preference for sustainability.
Understanding why ESG matters begins with understanding what it is. The following are the key components of ESG initiatives:
- Environmental: This component focuses on energy consumption, waste generation, and the consequences of your practices for life on Earth. A major example is carbon emissions.
- Social: Relationships, reputation, and the place your business has in society fall under the social component of ESG. For example, this includes the way you handle labor, public relationships, and your interactions with social institutions.
- Governance: Perhaps the most familiar to a business-administration professional, governance is about how you run your organization. It's about long-term internal governance, risk prevention, and compliance, to name a few key points.
Generally, though, you could think of an organization that scores well for ESG investors as one that displays a combination of environmental efficiency, strong social capital, and forward-looking governance. To quantify that, you'll need to dive deep into your operations.
Although the goal is usually operational excellence in every aspect of ESG, in practice, successful ESG often comes down to your organization's priorities and your industry’s overall sustainability standards. Outperforming your competitors in even one of these categories could give you an advantage in perception and valuation over an organization that disregards ESG.
Measuring sustainability and making focused progress
Most companies are adopting ESG initiatives in one form or another. If your organization is among them, you've probably encountered some of the challenges of putting these ideas into practice. So how can you make and show progress?
One way forward is to adopt a standard. Various standards measure the different aspects of these initiatives: the Sustainability Accounting Standards Board, Global Reporting Initiative, and UN Global Compact, for example. Learn more about the different standards here and choose the one that makes the most sense for your business.
Another way to show proof of your sustainability initiatives?
Follow the money. Looking at your business spending practices can become the key to taking action. BSM helps quantitatively demonstrate your organization's sustainability advantage to potential investors, allowing you to generate long-term growth while helping you pursue ESG initiatives.
One hurdle here is maintaining accountability. You need to accurately measure ESG data to track the progress and impact of your initiatives. While enterprise resource planning (ERP) suites might collect this information, Coupa's BSM is different. For us, ESG is more than an extra feature — it's how we do business. Our customers have achieved various complex goals by using our platform, such as:
- Quickly reducing costs and improving margins
- Assessing and mitigating risks proactively
- Accurately forecasting threats to sustaining business practices
- Improving agility and navigating unforeseen disruptions
Our vision is a world where leaders and companies unite to make every business dollar spent more effective, equitable, and sustainable. That is why our BSM software makes it simple to navigate these complex, multi-factor issues — following the money to a more sustainable future.
Zooming in on supply chain sustainability
Prominent recent laws raise the bar for due diligence when it comes to identifying, preventing, and minimizing the business practices that harm people or damage the environment. If your organization aims to avoid contributing to dangerous, unjust systems, such as modern slavery or wasteful supply chains, then you need complete visibility into your global logistics operations.
The challenge is twofold here. First, in a rapidly changing business environment, it's difficult to maintain a single point of reference for your supply chain. Supply chains used to prioritize cost and service above all else. But now, with complex factors like ESG and risk, that equation is shifting.
That's where BSM comes in, empowering you to track critical metrics across a complex global supply system — without an extensive onboarding or conversion process every time you acquire or merge with another entity.
Second, many tools lack the specificity to help you truly pursue your core goals. A classic example is combining carbon offsets with carbon reduction for overall net-zero metrics.
Offsets aren't bad, but by themselves, they do not create the type of radical progress that establishes your organization as a world leader. True progress in slowing the worst effects of climate change comes from reducing what you can and offsetting the rest while working toward zero carbon emissions.
Through thoughtful supply chain design and planning, the right BSM technology can help you measure and reduce your carbon footprint while also making clear progress toward other key ESG performance indicators. Furthermore, knowing your own supply chain emissions can help you position yourself to your customers in a way that’s beneficial for your brand and business. The right BSM platform also provides the depth and breadth of data that you need to follow your guiding principles while navigating constant change.
Take control of corporate sustainability
ESG initiatives represent your first step towards a more equitable, more sustainable future. Coupa is here to help you take control of your journey with complete, end-to-end visibility and insight into all of your business spend.
See why 3,000+ customers trust Coupa’s user-friendly platform for their business spend management.
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