Sustainability:
The C-Suite Guide

Only 38% of business leaders say they have embedded environmental sustainability into their decision-making processes. Executive leaders must clarify the business outcomes and resources available to invest in their sustainability strategy. 

Enterprise sustainability strategy can drive direct outcomes such as enhanced compliance, optimization of resources or transformation through new business models, and product or service offerings. But don’t forget to  identify and monitor indirect benefits, such as reduced operating expenditure or enhanced competitive decisions. Fewer than 10% of business leaders state that they have fully realized these benefits today. 

To make progress against ambitious sustainability goals, executive leaders need to be clear on how they will make trade-off decisions between cost, cash, service and environmental/social impacts. They also need clarity on how to make trade-offs between short- and long-term decision making. 

Progress against sustainability goals will not be linear, but Gartner has developed three essential best practices to help executive leaders maintain momentum.

1. Identify nonnegotiable sustainability priorities:

• Legislative mandates: Comply with sustainability-related legislative and regulatory rules.

• Public commitments: Maintain compliance with previous public sustainability commitments.

• Top material issues: Focus on what is important to stakeholders and impactful to the business.

2. Look for "two for ones":

• Identify activities that benefit both sustainability and the bottom line, such as energy efficiency initiatives.

3. View sustainability as a marathon, not a sprint:

• Set long-term sustainability goals with flexibility to navigate uncertainties and external shocks.

• Consider establishing net-zero emissions goals with progress indicators at regular intervals.

Meeting ambitious sustainability goals means orchestrating decisions, aligning strategic priorities and leveraging skills effectively. Sustainability goals cannot be achieved in isolation. This requires both activating the workforce, creating a culture of sustainability and looking to solve challenges through ecosystem partnerships.

The way in which leaders lead and communicate performance both internally and externally will materially impact stakeholder trust in enterprise sustainability promises. To drive change and embed sustainability within your organization:

• Apply change management: Assess how change management principles can help embed sustainability into key business decisions.

• Engage employees: Educate employees on the importance of sustainability and how their actions can materially contribute to enterprise goals.

• Build partnerships: Selectively participate in partnerships to address macro sustainability challenges through innovation and collective action.

• Communicate: Authentically communicate sustainability performance to stakeholders. Put in place communication controls to avoid greenwashing risks.

Technology can act as a sustainability performance accelerator by providing insights to automate or optimize decision making. Executive leaders can get started by matching technology to a series of use cases that either:

• Enable the enterprise to make progress against its sustainability commitments, or

• Provide an opportunity to differentiate in the market by offering new technology-enabled sustainable products or services. 

Executive leaders must check that they are using the right technology, at the right time and in the right way. Ninety-four percent of business leaders state that future growth is dependent on increased use of technology. Consider the environmental and social impact of technology development as well as use cases. Gartner's Hype Cycle for Environmental Sustainability groups technologies into three key categories: 

• Resource optimization: Technologies that enable efficiencies such as energy, packaging and materials efficiencies. Examples include circular supply chains, sustainable packaging and energy management and optimization systems.

• Data and analytics: Tools that provide insights for informed decision making. These include AI for sustainability, water risk analytics, geospatial platforms, carbon accounting software, life cycle analysis tools and supply chain blockchain.

• Catalysts and concepts: Strategies and frameworks that drive sustainability goals. Examples include the circular economy, ESG practices, Scope 3 greenhouse gas (GHG) emissions data analysis, green finance and voluntary carbon offsets.

While widespread adoption of these technologies may not be immediate, most are expected to become mainstream within the next decade. Adopting them early can offer a competitive edge and position your organization as a sustainability leader.

The UN Climate Change Conference (COP28) set ambitious targets to triple renewable energy adoption and double energy efficiency rates by 2030. As energy markets transition at varying paces, organizations must navigate strategic and product portfolio risks and opportunities. Executive leaders must identify avenues to align with the energy transition, ensuring enterprise resilience while proactively managing risks such as stranded assets or products.

Effectively manage growth to achieve GHG emissions targets

Business growth often increases greenhouse gas (GHG) emissions, posing challenges for achieving net-zero goals. However, 26% of business leaders do not consistently measure operational emissions, risking financing for GHG reduction initiatives.

Executive leaders should take the following actions:

• Establish baseline performance, and set clear goals for GHG emission reduction accounting for growth. 

• Regularly forecast and assess the relationship between growth and GHG emissions .

• Provide comprehensive, costed emissions-reduction pathways to inform decision making. 

• Identify and prioritize projects aimed at decoupling GHG emissions from business growth.

Balance energy cost, security and decarbonization

Power markets are undergoing significant change, leading to supply-demand imbalances and rising prices. While cost is important, energy strategies must be holistic and consider energy security and GHG emissions reduction. 

Use a multidimensional approach to mitigate energy risk by:

• Engaging in scenario planning to identify a range of potential outcomes, impacts and indicators for informed decision making

• Proactively managing energy consumption and costs through efficient practices

• Securing energy supplies through diversification and strategic sourcing

• Advancing decarbonization objectives by integrating renewable energy and sustainable practices into operations.

Implement a paradigm shift in energy consumption

Energy is not the stable or affordable resource it once was. To remain competitive requires a change in strategy and behavior. To proactively manage energy costs, do the following:

• Track energy markets and use projected prices to inform procurement strategies.

• Decrease energy demand through strategic investments in energy-saving opportunities.

• Reduce embodied energy by embracing circular-economy principles.

• Offer energy-efficient products to differentiate in the market and meet evolving consumer preferences.