Your expert for questions
Andreas Feiner
Partner, Sustainability Services at PwC Germany
Tel: +49 171 8404662
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Impact and business – a symbiotic relationship
In recent years, a lot of academic research has been published showing how sustainability can make a positive financial impact on a company. But at the same time there have been compelling voices arguing that companies must choose to either maximise their positive impact on society and the environment, or to maximise their financial returns – because it’s allegedly impossible to do both.
In this context, sustainability programmes without a clear and positive business case can sometimes be viewed as “nice-to-have” activities for boosting brand positioning, rather than “must-have” activities to optimise and grow the core business. This suggests that the future of sustainability programmes will depend on value creation.
On the other hand, CEOs and CFOs also need to balance the fact that sustainability is a big focus topic for shareholders, investors and customers. Nowadays, investors are willing to pay a premium for companies that can offer genuine transparency about the impact of their sustainability programmes. This is because investors now also need to meet increasingly strict regulations and reporting requirements. In addition, modern customers and consumers value products and services with a strong sustainability profile. This creates a set of clear imperatives for businesses.
This report shows that AI technologies have the potential to reduce the global carbon footprint by gigatons of CO2 emissions annually. On top of this, our research shows that using data and AI to reduce emissions has the potential to save companies hundreds of billions of dollars each year. The report also provides a preliminary snapshot of these first examples of how data and AI can cut emissions, reduce costs, and enable new and more sustainable revenue streams across industries.
The report in a nutshell
Sustainability – the longevity key for business
Sustainability reports have evolved from glossy brochures full of uplifting stories into documents that apply the same rigour as financial reports. For example, the world’s largest and most comprehensive sustainability reporting standard, CSRD, is now mandatory for about 50,000 companies conducting business in Europe. Companies covered by the CSRD must significantly expand their sustainability reporting effort to increase transparency and accountability.
Collecting multiple data points from across a company and presenting them in line with regulatory expectations brings a high risk of human error. That risk is problematic as companies are liable for any errors in their sustainability reporting, in the same way as they are liable for errors in financial reporting.
So, the time for doing sustainability reporting on an Excel spreadsheet is over. Data and AI offer opportunities to ensure reporting in line with increasingly strict regulations and reporting requirements and can also help businesses to seize a leading role in the sustainable business transformation. Essentially, sustainability is a cross-business function that touches every area of business – from Human Resources (HR) and Finance to Operations and Supply Chain Management. Consolidating all of that data into a single source opens up possibilities to use AI as a powerful tool to boost efficiency and sustainable growth.
Dive deeper into these and other sectors or customer stories
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Solid foundations: There is no AI without data
Research shows that sustainability measures can have a positive impact on financial performance for businesses, by reducing operating costs or lowering the cost of equity capital. However, most research focuses on the financial benefits of sustainability in isolation without considering the additional financial benefits of including data from other areas such as HR, Finance, Supply Chain, Sales or R&D into the sustainability management approach. Bringing together data from every area of an organisation establishes a powerful foundation that can make it easier to comply with reporting requirements, cut costs and unlock new revenue streams.
Fragmented data is a major obstacle that disrupts efforts to achieve sustainability compliance and leverage business growth opportunities related to sustainability. Leaders can remove that obstacle by driving efforts to break down data siloes, unify various data sources and combine existing data systems across an organisation.
Research from Microsoft and insights from PwC’s Enterprise Data Management Framework points to five key aspects that must be mastered to achieve this data-centric business transformation:
This is just the beginning
The path to sustainability is not yet perfect, but it is clearly visible. Companies are making rational economic decisions and the attractiveness of sustainability will be further strengthened by the positive economic impact of AI, which is likely to influence corporate behaviour. In the global context, where tackling climate change is dependent on political decisions by industrialised nations, technologies such as AI can contribute to the decarbonisation of our economies – particularly if political action is delayed or ideologically restricted.
The rise of AI is not the beginning of something new. Instead, it is the latest part of a long-term digital transformation. The future is likely to bring many more sustainable and economic benefits. As the world moves towards a more sustainable economy, it is crucial to seize opportunities – and for companies to embrace data and AI to drive sustainability programmes that are financially worthwhile.
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The Longevity Key for Business
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