Turning sustainability compliance obligations into value creation

Sustainable business model reinvention

  • Insight
  • 5 minute read
  • November 05, 2024
In the latest PwC Global Investor Survey, 86% of investors who invest in Aotearoa New Zealand want companies to embed Environmental, Social, Governance (ESG) directly into their corporate strategy, to understand how companies are managing their business and creating value. 

In the face of persistent economic uncertainty, New Zealand businesses are zeroing in on improving margins and reducing costs. Amidst these challenges, sustainability obligations have become increasingly more onerous, driven by growing compliance obligations and stakeholder expectations. This often translates into increased administrative burdens, with significant resources devoted to data collection and reporting. Currently, sustainability reporting is seen more as a necessary expense than a strategic opportunity. This perspective misses the transformative potential of sustainability to create business value. 

Organisations now have the opportunity to reframe sustainability reporting from a compliance burden to a lever for business model reinvention. With the right tools and processes in place, sustainability data can inform strategic decisions, and provide actionable insights, driving efficiency and the potential for value creation across the business. Below, we highlight two key areas for leveraging sustainability intelligence to transform your operations.

1. Optimising through technology

To truly unlock the value of sustainability insights, businesses must optimise their processes for overall efficiency and effectiveness. Technology is crucial in enabling this. 

Sustainability technology can centralise data management, ensuring accuracy and consistency while enabling real-time tracking. However, there is no one-size-fits-all solution. Organisations must choose technologies that align with their specific sustainability risks and opportunities and ensure compatibility with existing systems. Best practices for process optimisation include integrating sustainability goals into core business strategies, fostering cross-functional collaboration, and continuously monitoring and improving processes.

When sustainability technology is implemented properly, resources can be redeployed to derive useful insights from the data, adding real value, offering strategic advantages, and driving informed decision-making.

Consider a recent example of a client who implemented a sustainability reporting technology solution. This client set ambitious sustainability targets, aiming to become an industry leader. However, they found themselves spending excessive amounts of time on reporting rather than progressing activities to meet their targets. By adopting the right technology, they streamlined their reporting processes, freeing up resources to focus on delivering their strategy and making tangible progress toward their sustainability goals.

Below are three questions to ask when thinking about how to optimise your business performance through the implementation of technology:
  1. How can we align our technology choices with our most material sustainability risks and opportunities to ensure they enhance both compliance and operational excellence?

  2. What specific workflows and processes need to be rethought and redesigned to maximise the efficiency and effectiveness of our sustainability initiatives?

  3. How can we integrate new sustainability technologies with our existing systems to ensure seamless data management, accuracy, and real-time tracking?

  4.  

2. Using data to drive transformation

The data collected for sustainability reporting holds significant untapped potential. Beyond compliance, this data can be leveraged to drive better business efficiencies, such as cost reduction and process improvement. For instance, sustainability data can reveal insights into energy consumption patterns, waste management practices, and resource utilisation, enabling businesses to identify areas for improvement and implement more sustainable, cost-effective practices.

Moreover, integrating data analytics into decision-making processes can provide actionable insights that support strategic planning and operational decisions. For example, data analytics can help businesses forecast future sustainability trends, assess the impact of different initiatives, and measure progress towards sustainability targets. By harnessing the power of data, businesses can not only meet compliance requirements but also drive innovation and value creation.

Ask these questions when considering how to use sustainability data to drive business transformation:

  1. What insights and analytics would be useful to help leverage our sustainability data to identify areas for cost reduction and process improvement, thereby enhancing overall business efficiencies?

  2. What specific insights can data analytics provide to support our strategic planning and operational decisions, particularly in forecasting sustainability trends and measuring progress towards our targets?

  3. How can we integrate sustainability data into our technology and processes to transform sustainability from a compliance requirement into a strategic asset that drives innovation and long-term value creation?

The evolving economic landscape presents New Zealand businesses with a unique opportunity to reframe sustainability from a compliance obligation to a strategic advantage. By leveraging advanced technologies and data analytics, companies can optimise their processes, reduce costs, and drive innovation. This shift not only enhances operational efficiency but also positions businesses as leaders in sustainability, fostering long-term success and business resilience. As we continue to explore these themes, we will dive deeper into how sustainability initiatives can drive significant value, transforming them from mere compliance tasks to critical components of business model reinvention.

Are you leveraging your sustainability obligations to create value?

How we can help

Businesses are facing pressure to rethink their operations in the context of sustainability - reducing carbon emissions in line with net zero targets, providing better sustainability reporting and transparency, and adapting to unavoidable climatic risks. However, with these challenges comes the opportunity to transform for the better. Businesses have the potential to unlock new opportunities for value creation, uncover efficiencies and build resilience for the future.

Our community of solvers can help bring your business model reinvention to life, quicker. From how you operate and innovate to re-energising for the future, we can help you target maximum results by focusing on the climate actions that make the biggest difference. Through people and technology working together, we'll deliver sustained, sustainable outcomes that create real value.

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Annabell Chartres

Annabell Chartres

Partner, Sustainability, Climate & Nature Leader, PwC New Zealand

Tel: +64 21 799 927

James  Ayling

James Ayling

Director, Sustainability, Climate & Nature, PwC New Zealand

Tel: +64 21 272 7092

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