59% of Indian businesses link environmental action and profitability

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Mumbai: New SAP research reveals that Indian businesses are increasingly seeing financial benefits from sustainability. As many as 59% of Indian businesses see a positive connection between environmental action and profitability, according to a new SAP study.

The global Environmental Sustainability Study of 6500+ business leaders, including 400 from India, is the second edition of SAP’s annual report which explores the motivations and barriers organisations face as they look to boost sustainability in their companies.

Environmental activism (45%) is the biggest motivating factor for organisations to take environmental action, with revenue and growth opportunities (34%) and customer demand (33%) trailing behind. Yet Indian organisations risk losing out if they are unable to place data at the heart of their sustainability strategy.

“If India is to advance towards a more sustainable future, businesses must do their part and embrace sustainability as a holistic approach to get there,” said Kulmeet Bawa, President and MD of SAP Indian Subcontinent.

“It is clear sustainability is no longer about brand reputation or ethics – there is a defined connection between profit and purpose,” added Bawa.

Key findings from the study:

Linking sustainability goals with business strategy

  • 37% of Indian businesses say a lack of environmental strategy is holding them back.
  • 35% of respondents point towards difficulty proving a return on investment.

Embedding sustainability goals within larger business strategy, measuring, and recognising progress will be crucial to success and driving long-term value.

Data is critical to driving meaningful change

  • 31% of businesses rely solely on assumptions and estimates to assess the environmental impact of their supply chain.
  • 46% of businesses say they don’t have complete visibility over the sustainability metrics of their external supply chain.

Collecting and analysing high-quality data has emerged as a critical issue and a major stumbling block in the measurement process.

Making sustainability profitable and profitability sustainable

  • 59% of Indian leaders now believe that there is a positive relationship between environmental action and profitability.
  • Almost half (48%) of Indian businesses now believe addressing environmental issues will be material to business results within the next five years.

SAP found 76% of businesses said that their stakeholders would be moderately or highly tolerant of reduced profitability in pursuit of their organisation’s sustainability goals – indicating leeway to invest in positive sustainability outcomes.

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