By Isabel Romero, Audit and Assurance Partner at Deloitte
Concern about climate change continues to be a priority for all organizations and the use of the term “sustainability” is increasingly frequent. Without a doubt, we are all aware of the urgency with which the challenges related to this phenomenon have been addressed and one of the greatest concerns is related to the challenge involved in implementing measures to counteract it from the business field; as well as its complexity.
How to achieve the long-awaited balance between human needs and natural resources, without losing sight of the profitability of companies, the well-being of society and care for the environment?
Some concerns that companies face regarding the issue are:
1. Regulatory and regulatory compliance:
Environmental and sustainability regulations are constantly evolving.
There are specific standards and regulations that companies must comply with to minimize their environmental impact; Therefore, it is necessary to stay permanently updated about local and international laws and regulations. This takes time and represents a great challenge. It is not only a legal liability, but also has a significant impact on reputation, efficiency and competitiveness.
Likewise, companies face pressure to be transparent about their sustainability practices and to report their performance clearly and consistently. This includes collecting data, establishing metrics, and publishing sustainability reports.
2. Sustainable supply chain:
An efficient supply chain is a priority for any company; since it involves maintaining a balance between assets, inventory levels; volatility and also infrastructure, among other factors. If this chain must also integrate responsible environmental practices within a profitable business, it is not a minor issue. Ensuring that all links in the supply chain are sustainable is very complex and involves coordination even with suppliers that guarantee sustainable practices.
3. Investment and financing:
Implementing sustainable initiatives often requires a significant upfront investment. Financing is related to the company’s ability to raise resources for its activities and in this sense, sustainable finance sets the business course and will continue to do so in the coming years.
It represents a change in culture; as companies must focus on projects that support the transition to a more sustainable future. Previously only financial factors were considered, currently environmental, social and corporate governance aspects and criteria must be considered.
The main challenge is that companies must identify ways to finance these projects and, above all, demonstrate to investors that sustainability can be profitable in the long term.
4. Waste management and energy efficiency:
Proper waste management, including reduction and reuse, as well as reducing energy consumption and adopting renewable energy sources are important challenges. Many companies struggle to implement efficient systems that minimize their environmental impact and investments in infrastructure and technology are required, as well as changes in operational processes. However, it is generally known that adopting new technologies and innovative methods that promote sustainability is a significant challenge, especially for small and medium-sized companies, since they do not always have the necessary resources.
5. Education and awareness:
Environmental education is a powerful tool to achieve and maintain the balance and health of the planet; Therefore, fostering a culture of sustainability within the organization is crucial. This involves educating employees, customers and suppliers about the importance of sustainable practices.
Environmental education is essential for companies because it allows them to be more efficient, competitive and sustainable, while improving their reputation and their relationship with society. Saying it may be simple; However, it is essential that companies invest in training programs, carry out communication campaigns and, where appropriate, promote sustainable practices throughout the supply chain.
Organizations see it as possible to achieve global economic growth and at the same time achieve the objectives to combat climate change; However, addressing the challenges requires serious and timely commitment from companies, as well as collaboration with governments, agencies, NGOs and other stakeholders to develop sustainable and effective solutions.
The leadership of each company will influence the approach to addressing all of these issues; However, it is a reality that it is not possible to drive change alone. Organizations will have to face decision-making that in the future may confirm the success or failure in the implementation of sustainability actions and hence the importance of acting immediately.
