An increasing number of organizations are including corporate sustainability goals in their strategic imperatives—even more so since the start of the pandemic. But what does sustainability really mean from a business perspective?
We asked Ryan Hamilton, Senior Value Consultant for the Value Experience Group at the SAP Concur organization, and Sally Crotty, Senior Consultant and Sustainability SME for our partner, TCG, to discuss the growing focus on sustainability and how sustainability could look like through a business lens. In the next episode, we explore practical steps companies can take to enhance their sustainability efforts.
People, planet and profit: 3 kinds of sustainability
Environmental, social, and governance (ESG) goals, often referred to as "people, planet, and profit," are keywords we hear on a regular basis, notes Crotty. Since the pandemic began, she says, “[we’re seeing] not just an environmental focus on sustainability but also an increased focus on social and economic sustainability.” She elaborates:
- Social sustainability, sometimes referred to as people or human sustainability, includes things like fair pay for employees, healthy work-life balance, diverse and inclusive workplaces, and flexible working hours and locations. It may also include training employees and people in the community to create and support the future workforce. “It’s all about supporting the [communities] in which we live and work,” Crotty explains.
- Economic sustainability, sometimes referred to as governance or profit, means ensuring that your business can grow and maintain profitability in sustainable ways. “It's also understanding what the company emissions are today, what information is available to measure the reduction in emissions, and what's needed in order to achieve their sustainable goals as the business grows,” says Crotty.
- Environmental sustainability means that organizations need to reduce the impact of greenhouse gases on the environment. The Greenhouse Gas Protocol, which provides the most widely used international accounting and reporting standards today, divides greenhouse gases into three categories:
- Scope 1 are direct emissions from owned or controlled sources for business, such as fuel combustion and company vehicles.
- Scope 2 are indirect emissions generated by a company’s purchase of energy, such as electricity to power a factory or the cost of heating and cooling an office.
- Scope 3 are indirect emissions generated within a company’s value chain, such as purchased goods, waste generated from operating the organization, employee commuting and business travel.
The high (environmental) cost of business travel
You may be shocked, as Crotty was, to learn how directly travel, meetings, payments, and expenses relates to environmental sustainability: Business travel can account for more than half of a company’s carbon footprint.
“Not only does this have a negative impact on the environment,” Crotty says, “but it can also negatively impact the organization's reputation and bottom line if their emissions are so high from traveling for business.”
Travel represents 5% of global emissions, Crotty notes. Because corporate travel makes up 30% of that, roughly 1.5% of all global emissions is directly related to corporate travel.
“It may not seem like much,” Crotty says, “but in the grand scheme of things, it’s quite a substantial amount.”
Sustain your people, protect the planet
Sustainability goals have become key to attracting talent. “For somebody [who] may be really interested in protecting their future and the generations of the future, this is really important,” Crotty says. A commitment to sustainability helps with employee retention, too. “If you think the company has great values and [is] really protecting the future, then you want to stay with them,” Crotty notes.
One organization that can support companies committed to reducing their emissions is the Carbon Disclosure Project (CDP), which helps organizations disclose their environmental impact and reports on leaders who are reducing their emissions.
Organizations can also commit to science-based targets, which provide a clearly defined path of emission reductions in line with the Paris Agreement goals to limit global warming. More than a thousand companies globally are already committed to measuring their emissions and quantifiably reducing or eliminating them.
Ready to join the many corporations that are embracing ESG? Learn how SAP Concur solutions can help your organization achieve its goals for reducing corporate travel emissions.