Making sustainability an advantage: ERP Today TV x IFS Unleashed

Key Takeaways

Sustainability efforts are increasingly viewed as vital to business performance, driving competitive advantage by connecting with enterprise value drivers and fostering long-term success.

Technology plays a crucial role in sustainability management by providing consistent data governance, addressing data quality challenges, and supporting ambitious decarbonization strategies through integrated systems.

Companies face mounting pressure to comply with stringent sustainability regulations and disclose their ESG-related activities, making transparency and accountability essential for value creation and diminishing the era of greenwashing.

Reporting from the ERP Today News Desk, live at the IFS Unleashed event in Orlando, Florida, Mark Vigoroso, chief content officer, ERP Today/Wellesley Information Services and Stephanie Ball, deputy editor, ERP Today, sit down with IFS’ Sophie Graham, chief sustainability officer and Caitlin Keam, senior director sustainability applications, and PwC UK sustainability partner, Tom Loukes.

The big question at hand – can sustainability efforts really offer a competitive advantage for businesses?

For IFS’ Graham, what’s becoming clearer is that sustainability efforts across ESG aims are becoming ever more entwined with the enterprise, but also, that it actually drives business value.

Explore related questions

“If you think about sustainability, it can mean a thousand different things and be measured in a thousand different ways. It’s partially being driven by regulation, measuring how sustainability actually affects business performance and how it’s financially material. It is helping elevate sustainability to something that’s discussed at the board and can really be a commercial value driver for businesses.

“When I speak to our customers, they want to be around for another 100 years and sustainability, in its purest sense, is about that. […] With sustainability, as with digital transformation, we are seeing winners and losers, and the ones that are winners in the space are really connecting it to their business value drivers.”

Customers thinking about new ways of working, moving to servitization models or circular manufacturing can help not only decrease the cost of production, but also having a better pick of the talent pool when it comes to people wanting to work for ethically minded and driven businesses, Graham states.

Graham touts research from MSCI which, conducting a study over ten years, showed a negative correlation between the cost of capital and a company’s ESG rating across sectors and markets, and suggested that companies that perform well on sustainability actually have cheaper, easier access to capital from investors.

This is where the panel believes technology plays a key role, as Keam states: “Technology can bring the top layer of consistency and good governance around your data, but it’s also there to help you bring all the data together, have a single source of truth that you can report on and have confidence in that data. The role that AI will play is helping us solve that data challenge by looking at data quality and helping fill data gaps. So really in a lot of places, technology supports the regulations, but it’s also way beyond that – our customers have ambitious sustainability goals. They’ve got decarbonization strategies and you can’t do that without leveraging systems and seeing how technology can support you and the world in going towards decarbonization.”

Working in collaboration with PwC UK, IFS has launched IFS cloud sustainability management, built on EU regulations (the corporate sustainability reporting directive). With built-in KPIs, data management and AI technology, Keam states “It’s not just here’s your reports, but how we manage it. You can track annually what you need to do for a longer-term goal.”

Keam presses: “These regulations are going to be under the same scrutiny as financial data, it’s going to be audited. So, bringing PwC knowledge into the product as well as their experience with audit was a no-brainer to help our customers.”

With companies increasingly required to both categorize their economic activity as either sustainable or not, and also disclose against ever more sustainability standards, from emissions to social agenda and governance, ESG is a topic that can no longer be shifted down the agenda. Perhaps the greenwashing enterprise era is finally about to be over and, in its place, value creation from real sustainability.