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Digital Sustainability – Invest in a net positive approach
Today, most companies talk about and markets what they do related to sustainability. But how do they know what activities gives the most effect or is it so that everything related to sustainability should be labeled as “good”?
For me as responsible for our offerings and sales it´s of my opinion that the sustainability aspect plays a central role in how we choose to position our offerings and towards what market.
Most companies work with their footprint in terms of reducing their emissions and climate impact. I think that is necessary and generally I do believe that organisations’ environmental, social and governance (ESG) work becomes more and more important. We have seen leading institutional investors such as Black Rock write letters to their clients describing a number of initiatives to place sustainability at the core of their investment philosophy. Cybercom's largest owner Formica Capital, a so-called Impact Investor, also invests in companies with a strong purpose and a clear commitment to dealing with global challenges.
How do you know if an investment can be called “green”?
One tool that will help determine this is the EU's new taxonomy. The EU Taxonomy is a tool to help investors, companies, issuers and project promoters navigate the transition to a low-carbon, resilient and resource-efficient economy.
The new taxonomy classifies which investments are environmentally sustainable or not. The European Commission has set six environmental objectives:
- Climate change mitigation
- Climate change adaptation
- Sustainable and protection of water and marine resources
- Transition to a circular economy
- Pollution prevention and control
- Protection and restoration of biodiversity and ecosystems
The purpose is to ensure that the financial sector receives common guidelines for which investments that may be called green. This is how TEG’s final report on the EU taxonomy states it:
“The Taxonomy sets performance thresholds for economic activities which 1) make a substantive contribution to one of six environmental objectives, 2) do no significant harm to the other five, where relevant, 3) meet minimum safeguards (e.g., OECD Guidelines on Multinational Enterprises and the UN Guiding Principles on Business and Human Rights).”
Basically, you only have to contribute to one of six objectives to be classified as “green”, of course without doing significant harm to the other five or crossing any regulatory lines or violate any human rights.
Billions of Euros will be required in investments in areas such as energy efficiency, real estate, transport, etc., in order to live up to the goals of the European Green Deal on a climate-neutral Europe by 2050.
Clients are maturing in sustainability with different needs along the journey. Industries also have different maturity level, different opportunities, and risks of course.
Food for thought: Which companies will benefit most from the green wave, the EU's taxonomy and the massive climate package?
A net positive approach - Moving from footprint to handprint
If your company deliver on several of the EU commissions objectives, you may consider yourself being in the driver’s seat and many organisations have started to realise this. A growing number of companies are already challenging their current business models, shifting focus from merely ‘doing less harm’ to becoming ‘net positive’.
Net positive means adding greater value to society than you take away. It goes beyond direct business impacts on society and the environment that are ‘less bad’: it’s about providing solutions that society needs and thereby becoming a net contributor. Or as we call it, move from footprint to handprint.
Digital sustainability - The net positive approach broadens and shifts the perspective on how a company relates to sustainability. Rather than replacing earlier sustainability approaches, it adds a layer. It is a driver for business innovation aiming to find your competitive advantage in relation to the global sustainability goals and/or new customer offerings as well as business opportunities to secure your organisations continued competitiveness and growth.
If you would like to get in touch with me and learn more about digital sustainability and our approach, make sure to book a meeting.
Head of Business Transformation & Offerings
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