86% Of Indian Businesses See Positive Relationship Between Sustainability & Business Profitability: Study

Mumbai, May 13, 2024: Eight-six per cent of Indian organisations see a moderate to strong relationship between sustainability and their organisation’s profitability – and are boosting their investments as a result, according to a study.

The sustainability study conducted by SAP also said that 58% of Indian businesses expect to a positive financial return on their sustainability investments within the next five years. In India, 39% of businesses intend to increase their investments in sustainability over the next three years.

Commenting on the survey findings, Paul Marriott, President, SAP Asia Pacific Japan, said, “The Asian market represents more than 50 percent of the world’s emissions, and so as one of the fastest growing hotbeds of innovation and economic activity in the region, India is in a unique position to lead the charge against climate change. It is an encouraging sign that more and more Indian organizations recognize this and are ready to embrace it.”

Manish Prasad, President, and Managing Director of SAP Indian Subcontinent, further added, “Sustainability is now a business necessity rather than merely a moral duty. It can no longer be seen as distinct from the overall financial performance of the company. It is evident from the findings of our study that businesses that prioritize sustainability are more successful. The moment has come to consider carbon data similarly to financial data in all corporate processes by integrating financial and environmental decision-making.”

The study said 77% of Indian businesses have witnessed sustainability strategies contributing to outcomes such as revenue or profit growth to a moderate or strong degree.

The lack of an environmental impact strategy is the top barrier to taking environmental action with 40% of Indian businesses finding it a challenge, the study said.

Other notable challenges include uncertainty due to the COVID-19 pandemic, clear direction on embedding sustainability into business processes and IT systems, and a shortage of expertise.

“Businesses today believe that extracting value from sustainability data is critical for informed decision making. If our sustainability data is not accurate, then the decisions we make to improve the health of our planet and our businesses are cast into doubt. The key is to record and report accurate, granular, and auditable sustainability data and integrate it with financial data to make the right business decision,” the report stated.

While 40% of Indian businesses are completely satisfied with the quality of the sustainability data they gather, others believe it’s a long way to go.

Almost 8 in 10 of (78%) Indian businesses report moderate or strong tracking of Scope 1 emissions, while that number is 77% for Scope 2 emissions, and 65% for Scope 3 emissions.

69% of Indian businesses use sustainability data to inform strategic and operational decision-making to a moderate to strong degree. Subsequently, three-quarters (75%) of respondents said they require sustainability data from their suppliers and 78% demand environmental impact data from partners like logistics and fulfilment to a moderate to strong degree, the report said.