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New Business Models

Sustainability was already driving business model innovation back in 2020 when organizations were looking for new opportunities for growth, develop new revenue streams and attract new customers or increase brand  loyalty. Then the pandemic hit and ESG-matters were off the table.

 

Having recovered from the downturn and returning back to a New Normal, organizations have - yet again - started to realize that sustainability and circularity matter more than ever: regulators have turned up the heat around net zero targets, but also on reporting and compliance requirements; markets and customer behaviour have also significantly changed, putting much more emphasis on environmental aspects, product information from cradle to grave and personal convenience without compromises. 

Now, while many organizations still might believe that investing in ESG is going to be a cost-factor only or most and foremost investment without return, it's been proven that with the necessary strategic approach (leveraging a 'Triple Play'), organizations don't just generate increased profit, but are outperforming their peers in the market by far.

Take some of the leading examples in the market - there is plenty of evidence that ESG matters, and has the power to drive increased shareholder value and profitable growth when part of a wider change agenda. A Must for leading organizations and those who want to be leading in the next decade. 

How Green Is Your IT?

With digitization across businesses and products or services increasing and AI putting an unprecedented demand on more compute and storage capacity,  sustainable IT is a critical element of any net zero strategy and sustainable operations.

 

Yet, according to recent research, many organizations still do not consider their technology footprint to be a critical piece in the puzzle and completely deny that every instance they spin up, every email they store for their employees over a long period of time, every unused compute capacity takes a toll on the environment. 

 

Green IT has an internal and external dimension and should be treated as an important and strategic matter, not only by the CIO / CTO but also by purchasing departments and operational leaders. Take the example of Maersk, who as a global shipping organization still has a long way to go towards net zero. However, the company is making considerable efforts across its operations to achieve ESG targets faster. Herewith included sustainable IT operations. Together with other industry leaders, Maersk also recently developed a Technology Sustainability IT Index to assess and rate its suppliers and partners. 

While technology is still underestimated as an important factor and enabler in ESG initiatives, there are many examples of market leading organizations who took the IT and OT matters seriously and moved the needle considerably by an informed data strategy, engaged employees and leadership, a sustainable software architecture running on the smallest possible hardware estate and sustainable service partners. 

 

Furthermore, greener technology also has the power to unleash the potential of new products and services with lower environmental impact and eco-friendly innovations.

Net Zero Through M&A

With new EU directives, COP26 initiatives and federal targets in place, the pressure on private and public sector companies is higher then ever and the need for serious change non-negotiable. 

Businesses have to accelerate transformational initiatives to reach net zero faster, stay relevant to their customers and consumers, enhance or change their product or service portfolio to meet sustainability requirements and remain attractive to a new generation of eco-friendly, net-zero conscious buyers. 

Fundamental change from within is complex in nature, bears operational risk and takes time, so that M&A is a preferred route to accelerate the transition and acquire skills or new capabilities that can be leveraged immediately. 

Investors and shareholders are equally concerned about capital being invested into sustainable businesses or businesses with a committed ESG plan they are actively pursuing. ESG concerns today are therefore already an integral part of the early stages (due diligence) to ensure that the asset - its integration or divestiture - will meet net zero targets.

 

Does your strategic plan for 2024 and beyond incorporate the opportunities that M&A can provide to accelerate your net zero journey? Do you need expertise to help shape your ESG plans in view of acquisition targets or divestitures? 

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