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Brain Circuits
How to become a digital sustainability leader in 5 steps
Companies that excel in both digital and sustainable transformation attract a stock market premium – but how do you tap into that value? Here’s a five-step guide to outperforming your competitors.
1. Set tangible sustainability goals
We examined the market value performance of 154 firms that were continuously part of the S&P 500 from 2007 to 2021 and linked it to assessments of digitization and sustainability maturity for firms in each given year. Many digital sustainability leaders cited the importance of setting tangible sustainability goals. The key here is to focus organizational energy on searching for innovative solutions, often leveraging digital technologies.
2. Communicate progress
Effective communication highlighting achievements and areas for improvement is vital to successful transformation. Calling out achievements during the journey helps build and sustain a high-performance culture that encourages behavior shifts and drives a greater interest in digital and sustainability across the workforce.
3. Develop and implement measurement and analytics capabilities
What cannot be measured cannot easily be improved. To guide the prioritization of projects, it’s necessary to understand where the emissions come from. Clear assessments highlight the largest potential environmental gains. Improved measurement also serves as a risk-management tool as it can help organizations avoid reporting errors and being labeled “greenwashers”.
4. Establish governance to drive the complementary digitization-sustainability narrative
Transparent governance plays a pivotal role in promoting the understanding that digital transformation and sustainability can coexist and complement each other. To facilitate this, create global teams of leaders in their respective divisions to generate awareness and transparency around how digital and sustainability initiatives are rolled out.
5. Put appropriate compensation structures in place
Establishing appropriate compensation structures linked to the success of dual transformation efforts is also key in raising engagement and making the transformation an enterprise-wide undertaking.
Key learning
Achieving a position of digital sustainability leadership requires strong and public commitment to sustainability goals, clearly communicated internally and externally. It also needs to be built on a solid foundation of measures, KPIs, and analytics to allow organizations to focus on the right objectives and ensure that progress towards achieving them is tracked.
Further reading
Digital sustainability: It pays to be a leader, not a laggard
Use head, heart, and hands to lead sustainable transformation
From pledge to performance: Using design thinking to achieve sustainability goals
Eliminating roadblocks to sustainable business transformation
All views expressed herein are those of the authors and have been specifically developed and published in accordance with the principles of academic freedom. As such, such views are not necessarily held or endorsed by TONOMUS or its affiliates.
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