How To Bridge The Gap Between ‘Speak’ And ‘Walk’

 Sustainability has become a mainstream business concept and not just an ethical consideration. In fact, sustainability is high on the global corporate and government agenda. In the start of 2023, 140 countries had announced targets towards net zero, accounting for 90 per cent of global carbon emissions. To achieve India’s target of cutting its carbon emission by one billion tonnes by 2030 and reaching net-zero carbon emissions by 2070, the Indian government and businesses have a larger role to play as they are the key economic agents driving the change.

Indian companies are taking steps to reduce their environmental impact, as they recognise the importance of sustainability. In this regard, digitisation has an important role to play in promoting sustainability by ensuring transparency and accountability. The use of digital technology in sustainability reporting helps improve transparency and accountability, making it easier for stakeholders to hold businesses accountable for their environmental impact.

Besides, the use of digital technology in areas such as natural resource and waste management, sustainable urban development, and planning and monitoring would improve sustainability outcomes. However, it is important to recognise that digitisation is not a silver bullet and must be combined with other sustainability initiatives to achieve meaningful results.

To achieve the potential benefits of digitisation for sustainability, it is important for businesses to adopt sustainable processes, even more so for MSMEs. Since MSMEs account for 99 per cent of all businesses in India and are important agents for regional development, their adoption of sustainable processes will be critical for India achieving its goals around carbon neutrality. Yet only a small percentage of MSMEs are implementing sustainability initiatives. In a survey conducted in early 2023, Dun & Bradstreet found that awareness of sustainability measures amongst MSMEs is low, and 69 per cent are only partially aware of the opportunities from implementing sustainability measures and relevant sustainability factors for their business, sector, and geography. Survey findings indicate a large disparity between "speak" and "walk".

Large enterprises view sustainability as a strategic issue and are prioritizing their efforts. MSMEs, on the other hand, face more fundamental barriers due to a lack of financial resources and knowledge. As compared to large entities, MSMEs find it more challenging to act on their commitment to sustainability because they don’t have the basic building blocks to create a sustainable foundation for their business.

The Dun & Bradstreet survey found that technical know-how and established operating procedures are the biggest challenges for 45 per cent of MSMEs. Hence, despite the thrust towards sustainability, there is no clear strategy that small businesses have for determining why, when, and to what extent they should adopt sustainable practices as part of their overall business strategy. This is where digitisation and technological adoption can make a significant difference. Digitisation allows for near-real-time knowledge transfer and an instant feedback loop (through measurements and monitoring at the source). Recent technological advances provide low-cost, efficient, and effective tools to monitor and control emissions, waste, and resource utilisation.

Corporate data providers play a critical role in promoting sustainability in India. By providing reliable and comprehensive information on corporate sustainability practices, they encourage transparency and accountability, promote sustainable investing, help identify sustainability challenges and opportunities, drive innovation, and promote sustainability reporting.  It is hard to think of achieving sustainability in a vast and diverse country like India without the adoption of technology and digital transformation.  

(The author is MD & CEO, Dun & Bradstreet)