Key takeaways:
- Nowadays, the value and success of a business is highly dependent on understanding of the megatrends within the sustainability narrative.
- Accounting for the influence of different generations and customer’s needs is crucial for driving business value and keeping the brand alive.
- Sustainability is about collaboration, and IoT companies such as Nexxiot can provide the tools for companies to continuously generate sustainable value.
The value of sustainability
Addressing sustainability topics is as challenging as understanding its value. We are directly exposed to the news and social media outlets talking about the current environmental issues within the oceans, forests, atmosphere, and the push to preserve our natural resources, but tend to brush aside its main drivers: the economy, society, and our governance. Understanding these variables is crucial for meeting our present desires without depriving future generations of their needs.
There is a delicate balance between keeping industries accountable for social and environmental impacts and recognizing our dependencies on the goods, commodities, and services that those same industries provide to support our way of life. Take the logistics industry, for example, which puts food and medicines on our shelves but is responsible for about 23% of global greenhouse gas emissions.1 With our current projections for population growth, business development, and increased food and energy consumption, transport activities are expected to triple by 2050.2 Reducing the emissions impact of the supply chain sector needs to come from within organizations. Solutions lie in the adoption of innovative technologies to reduce our carbon footprint on the planet while improving operational processes and delivering higher value to consumers.
As the sustainability narrative finds its way across the markets, companies understand that maintaining an unchanged linear business strategy solely focused on profit and growth is no longer a choice. Productivity and profits will come from integrating the environment and society as key metrics for economic success.
The future of our current globalized economies will require dialogue, knowledge exchange, collaboration, and cooperation so industries can keep up with information trends. Companies holding on to antiquated ways of doing business will struggle to achieve the same transparency and sustainability results as industries that have embraced innovative technologies such as digitalization, big data analytics and artificial intelligence. Accepting and implementing this new world of business tech is a driver of sustainable practices and will help us support the present while addressing the needs of the future.
The logistics industry has taken pushbacks from governments, regulatory organs, and the public for having high carbon footprints, but they have the power and responsibility to lead the climate action narrative. The question is: what must companies do to maintain their value and at the same time reach the 2050 net-zero emissions goal?
Sustainability as a promoter of value
Driving value with sustainability involves more than emphasizing product circularity, carbon offsetting and saving water and energy. It accounts for the sustainability structures and standardization of a company’s value chain practices within its downstream and upstream activities.
The sustainability structure of a company should follow an integrated strategy that combines employee health and safety, product management systems, innovations, value creation, business growth, client satisfaction and financial stability within the Environmental, Social and Governance (ESG) indicators.
The standardization of sustainability is available through the guidelines of internationally recognized frameworks, including the Global Reporting Initiative (GRI), the UN Sustainability Development Goals (SDGs), the Greenhouse Gas (GHG) Protocol and industry-specific groups such as the Global Logistics Emissions Council (GLEC). Incorporating these agendas into all company levels will help embed the sustainability narrative into the culture and processes of any business. It facilitates the monitoring and evaluation of sustainability KPIs, which can, in turn, be correlated to economic performance indicators.
Once these strategies and standards are in place, the success of any sustainability program must also account for the eagerness of its leaders and corporate boards towards implementing the changes, encouraging employees through their passion and example, and setting up a sharp vision and goals for the future of the company. When these internal processes, procedures and frameworks are set, the value processes further depend on how the brand responds to the trends of the market, employees, consumers, and stakeholders. For example:
1. Understanding consumer’s needs and demands
Generation matters. Studies often show the disconnect between older and conservative executives and their younger and progressive consumers.3 Comprising 33% of the world’s population and fastest growing income, Gen Z (1996–2016) were born into the tech world and are the recent voices for responsible consumption and environmental protection.4 They are driving a sustainability movement that is motivating behavioral change in a majority of broadminded Millennials (1981–1995), and a minority of Gen X (1965–1980), where nearly two-thirds of the world population is now favoring responsible consumption and sustainable alternatives, and at least a third is willing to pay a premium for sustainable products.5 Companies should be aware of this trend, as newer generations can provide key elements to business strategies such as social media awareness and environmental consciousness.
2. Addressing megatrends within your brand
Let us look no further than Apple, which is pushing the sustainability narrative and is in line to reach full carbon neutrality by 2030. They are aware of the megatrends and are addressing the basics: low carbon designs, using recycled materials, securing renewable energy, having clear plans for energy efficient operations, being fully aware of their direct emissions, and investing in carbon removal technologies.6 Even if individuals do not believe Apple will achieve these goals, it is an effective branding approach that makes their products even more attractive whilst giving society and governing bodies the ammunition to demand accountability. As for profitability, we all know you will pay a premium for a MacBook or iPhone in comparison to a PC/Android equivalent, but just in 2021 alone, Apple increased its revenues by 33% in comparison to the previous year.7 Goes to show that companies who are in touch with embedding sustainability within all sides of their business models and corporate governance can experience high rates of growth and development.
3. Acknowledging that sustainable businesses attract talent
Sustainable employment comes from a sustainable business. A large majority of Millennials have disclosed that they would not take a job if a company does not have a strong corporate social responsibility record of accomplishments, and Gen Z has been shown to be the upcoming workforce that prioritizes purpose over salary.8 Millennials are becoming the largest workforce and are soon to be complemented by Gen Z. Companies must invest their time into a tangible sustainability strategy if they want to attract the newest talent. A clear sustainability plan can further motivate employees through the value such vision and practices can bring to society and the environment.
4. Taking social risks
Driving sustainability across all borders takes courage. Earlier in August 2022, our valued clients at Hapag-Lloyd proudly unveiled their new addition to the fleet: the Rainbow Container. The message is clear: it signifies their support for diversity and inclusion, calling for tolerance and openness for all people regardless of their origin, gender, age, ethnicity, sexual orientation, religion, or disability.9 With such positive message at hand, Hapag-Lloyd acknowledges social trends and continues to be a world leader in the supply chain sector, standing behind its decisions and understanding that a successful and sustainable business thrives from accepting social diversity as a strength.
How Nexxiot’s solutions can help your company navigate sustainability?
Our clients skillfully maneuver container ships and rail cargo, but we understand that steering through the sustainability journey can be a daunting experience. The success of a company’s sustainability comes from a holistic view of its employees, products, the market, clients and societal trends, together with the participation of external partners in technology. Collaboration and togetherness are valuable qualities for accomplishing sustainability goals.
At Nexxiot, we praise the corporations and individuals who take risks and recognize the importance of sustainability. We are proud to provide the tools to support their endeavors and encourage others who want to embark on this journey. We strive to understand our client’s needs and supply real-time information that can optimize their routes, protect their cargo from damage, theft, and loss, improve overall efficiency and reduce wasted trips and CO2 emissions through supplying data that can maintain the health and longevity of their assets.
As we know sustainability starts at home, Nexxiot follows strict procedures of quality assurance and accounts for sustainability on all levels of its product’s life cycle. Our devices are ATEX certified, and over 90% of the parts can be recycled or repurposed. Most importantly, we understand that our product’s health and circularity depend on variables such as handling, repairs, and recovery. We are aware of such challenges and keep detailed records to continuously ensure the quality of our products and services.
We understand that our clients seek quick, intuitive, and streamlined digital solutions to meet their economic and sustainability goals. Nexxiot takes sustainability seriously, as we are conscious of the value it can bring to our company, clients, society, and the environment. We have the tools, knowledge, and collaborative spirit to help the supply chain sector achieve its net-zero goals. Through our combined strengths, we will achieve a sustainable world with easier, safer, and cleaner global transportation.
References
1 IEA – International Energy Agency (2021). Tracking Transport 2021. Available at: https://www.iea.org/reports/tracking-transport-2021
2 ITF – International Transport Forum (2020). Transport demand set to triple, but sector faces potential disruptions. Available at: https://www.itf-oecd.org/transport-demand-set-triple-sector-faces-potential-disruptions
3 First Insight (2022). The sustainability disconnect between consumers and retail executives. Available at: https://www.firstinsight.com/white-papers-posts/the-sustainability-disconnect-between-consumers-and-retail-executives
4 Schroders Wealth Management (2021). What investors need to know about Gen Z. Available at: https://www.schroders.com/de/ch/wealth-management/insights/markte/what-investors-need-to-know-about-gen-z/
5 Business Wire (2021). More Than a Third of Global Consumers Are Willing to Pay More for Sustainability as Demand Grows for Environmentally Friendly Alternatives. Available at: https://www.businesswire.com/news/home/20211014005090/en/Recent-Study-Reveals-More-Than-a-Third-of-Global-Consumers-Are-Willing-to-Pay-More-for-Sustainability-as-Demand-Grows-for-Environmentally-Friendly-Alternatives
6 Apple (2022). Environment. Available at: https://www.apple.com/environment/
7 Business of Apps (2022). Apple Statistics. Available at: https://www.businessofapps.com/data/apple-statistics/
8 Forbes (2020). The Power of Purpose: The Business Case for Purpose. Available at: https://www.forbes.com/sites/afdhelaziz/2020/03/07/the-power-of-purpose-the-business-case-for-purpose-all-the-data-you-were-looking-for-pt-2/
9 Hapag-Lloyd (2022). Diversity is Our Strength. Available at: https://www.linkedin.com/company/hapag-lloyd-ag/posts/?feedView=all
