Corporate sustainability imperatives are beginning to align with the digital transformation, according to Atrius in its 2023 State of Corporate Sustainability Report. In February, the Acuity Brands subsidiary and provider of cloud-based sustainability reporting and automated carbon accounting software teamed with Smart Energy Decisions, an online resource for commercial and industrial electric power customers, to host a webinar on its report findings, which identified the alignment as one “megatrend” significantly affecting organizations’ sustainability journeys.
According to Atrius, “Megatrends are macro-level behavior patterns and movements that influence micro-level decisions and actions. These enormous changes happen beyond our ability to affect them, reshaping national economies and neighborhood businesses. Slow to materialize, it could be decades before we see the impacts of megatrends on corporate priorities and consumer purchasing.”
Released in January, the report reveals the impact of two once-disparate megatrends—sustainability initiatives and technology-based digital transformations—intersecting. It also emphasizes that energy management is “the first step towards corporate sustainability goals” and identifies barriers organizations face in achieving net zero carbon emissions status.
The inaugural report is based on a survey of 334 energy sustainability and facilities professionals in the following industries: enterprise building suppliers/service providers (22%); higher education (19%); commercial including retail and aviation (16%); government including cities/municipalities (13%); K-12 (10%); industrial/manufacturing (9%); software/technology (5%); and “other,” which includes health care, consultants, and nonprofits (6%). Building on data previously collected by Atrius and Smart Energy Decisions, the survey sought to discern how organizations create, enact, and communicate sustainability goals.
During the webinar, moderator and Smart Energy Decisions research and content director Debra Chanil discussed the report findings with expert panelists Adam Handler, director of corporate sustainability and communications at Acuity Brands; Heath Blount, principal at Brightworks Sustainability; and Jane Stewart, director of sustainability at Washington and Lee University.
Sustainability successes and misses
Organizations are making positive progress toward achieving sustainability goals, the survey found, with 60% of the respondents reporting being “on track” or “ahead” in their goals. With comprehensive, detailed reporting becoming paramount as federally mandated reporting frameworks, financial disclosure requirements, and corporate ESG programs demand accountability, the survey showed a 15% increase in consultants and service providers using spreadsheets to manage and report initiatives during the early stages of sustainability policy implementation. With the growing demand for third-party assistance with organizations’ sustainability reporting, Atrius warned that these providers would need more time to produce their clients’ reports due to the labor-intensive nature of manual data collection. An inability to track progress may also negatively affect achievement of sustainability goals, the report notes.
The survey found an across-the-board increase in the degree to which leading organizations integrated sustainability and ESG goals into their business strategies over the past year. “Many of us probably remember when sustainability was more of a ‘check box’ activity for organizations,” the report authors note. “But this year’s results show people taking their corporate sustainability and energy management goals seriously.”
Washington & Lee’s Stewart affirmed that the survey’s findings on sustainability efforts “resonate” with what she’s been hearing in higher education. “Institutions have had about a decade to assimilate goals,” she said. “We’re not ahead of the curve yet, but these numbers are hopeful in terms of anticipating real progress being made.” She expected “a fair amount of movement” in 2023 toward sustainability goals within higher education.
Not every respondent was on top of this need though: 38% of survey respondents are “behind” or “just getting started” on the road toward implementation. Challenges that hamper sustainability implementation efforts included budget constraints and ill-defined ROI as elements.
Hiccups in data
Issues with data quality are another barrier. The study noted that “the biggest drivers at every stage of organizations’ sustainability journey” include better data and more automation. Correspondingly, 40% of survey respondents saw a substantial increase in their organizations’ investment in real-time and automated utility data collection, up from 33% last year.
The panelists also grappled with the number of respondents who still gathered energy and performance data manually via bill collection (47%) and meter readings (25%)—parties whom Acuity’s Handler frankly advised to “get a tool” posthaste for calculating ESG data.
Handler and moderator Chanil noted how unrealistic expectations can also narrow the timeframe for the sustainability journey. Successful outcomes with early “low-hanging fruit” projects may inadvertently position sustainability as “a one-time sprint versus an ongoing marathon,” they warned. Stewart added that “counterintuitively, sustainability almost needs a lower case ‘s’ for distributed accountability.” Organizations, she contended, need to expand their sustainability teams so that they’re “not niche, but part of operations” and can meet and collaborate with “directors that have direct control over emission-heavy pieces, to make these goals their goals.”
To increase accountability, the survey found that centralizing data and making it accessible are vital to increasing occupant awareness of organizational sustainability goals. Respondents in higher education significantly emphasized occupant awareness and engagement (84%) than those in other sectors. In fact, people working in sustainability, facility, and energy roles prioritized this tactic higher than those in executive roles. Atrius contends that this data point “is surprising considering the value of C-suite executives engaging in and celebrating company achievements.”
Energy management is only a starting point
As Chanil and Handler echoed during the webinar, the report ultimately prescribes energy management not as an endpoint, but as the first of many guideposts to an integrated corporate sustainability journey. While energy reduction predictably remained a primary component of sustainability strategies, Handler said, new and emerging megatrends suggest that resource consumption management is “the first of many crucial steps to creating smarter, safer, and greener spaces.” This is where sustainability and technology trends can intersect, creating the megatrend of minimizing the impacts of climate change while maximizing the impacts of technology.
“Corporate America is developing an ethos that embraces pursuing commercial success while also taking a leadership role in protecting the global environment,” Handler stated. “With proposed federal regulations that may require publicly traded companies to provide emissions transparency and reporting, there is a strong business case for integrating sustainability across organizational processes.”
According to the survey, Chanil said, the two major characteristics of organizations successfully implementing sustainability policies are better reporting and more funding.
Brightworks’ Blount agreed, while citing the need for corporate sustainability teams to bring disparate parts of an organization together and communicate successes by aligning data with goals and targets. Teams should be asking, “What does [the data] mean, what does it indicate about material impact, and how [can we] best to align sustainability goals within the organization?” he said. Chanil closed the exchange by highlighting the value of “using the data to tell your story, bringing internal people along, and making it a priority within company to make sure sustainability has its rightful place.”
To close the webinar, panelists were asked to make one big prediction in corporate sustainability for 2023. Acuity’s Handler was succinct: “The SEC should finalize a draft rule on ESG reporting, and that will kick off a mad scramble for public companies to report Scope 1 and Scope 2 emissions.” He expected “the biggest winners will be in ESG,” meaning companies that help other organizations meet and report their ESG goals. Perhaps unsurprisingly, Atrius falls into this description.
Read a summary of Atrius’ 2023 State of Corporate Sustainability report at https://atrius.com/state-of-corporate-sustainability-report/.