IBM Institute for Business Value | Research Insights

Beyond checking

the box

How to create business value with

embedded sustainability

With deep industry expertise, ecosystem

partnerships, and proven methods, IBM Consulting

Sustainability Services guides and advises clients

on their journey to becoming a more sustainable

enterprise. Through cocreation and sustainability

advisory services, we lead with innovation and impact,

from strategy and implementation to managed

services. IBM software solutions such as IBM Envizi™,

Environmental Intelligence Suite (EIS), IBM Maximo®,

and IBM TRIRIGA® embed sustainability into an

organization’s operations, harnessing the power of

data and AI for greater transparency and actionable

insights. For more information please visit

https://www.ibm.com/sustainability

How IBM

can help

Are we hitting targets but

missing the point?

Spending on sustainability reporting exceeds spending

on sustainability innovation by 43%. Many organiza-

tions are approaching sustainability as an accounting

or reporting exercise rather than a transformation play.

“Doing sustainability” does not

equate to being more sustainable.

But organizations that embed sustainability throughout

their operations show better sustainability and

financial outcomes. They are 52% more likely to

outperform their peers on profitability, with a 16%

higher rate of revenue growth.

Tying sustainability to

business value is key.

53% of organizations that embed sustainability

say that business benefits are essential for justifying

sustainability investments. And only 17% say

meeting sustainability objectives is in itself sufficient

to justify investment.

Organizations that embed

sustainability are more

exacting—53% say

business benefits are

essential for justifying

sustainability investments.

Key

takeaways

FIGURE 1

Embedders are seeing

business value

16%

higher rate of

revenue growth

56%

more likely to

outperform their

peers on talent

attraction

more likely to attribute

great improvement in

operating costs to their

sustainability efforts

52%

more likely to

outperform their peers

on profitability

75%

more likely to attribute

great improvement in

revenue to their

sustainability efforts

Introduction

Why isn’t sustainability generating more impact for organizations?

After years “doing sustainability,” most enterprises haven’t produced

the desired outcomes. Almost half of all organizations in a recent IBM

Institute for Business Value (IBM IBV) survey still struggle to fund

sustainability investments, and six in 10 executives say they have to

make trade-offs between ﬁnancial and sustainability outcomes.

The hard truth many C-suite executives are grappling with is that “doing

sustainability”—as most enterprises have—does not equate to actually being more

sustainable. It appears we have to end sustainability as we know it, to make way for a

new model that delivers positive sustainable impacts and positive financial results.

Based on our survey of 5,000 C-suite executives across 22 industries and 22

countries, IBM’s IBV analysis shows that if organizations flip the way they

operationalize sustainability, they can significantly increase business value.

The key is to embed sustainability throughout the business—truly bake it into

operations—rather than treat it as an add-on.

Executives in our study see the value in sustainability:

76% say that sustainability is central to their business

strategy, 75% that it drives better business results,

and 72% that it can be a revenue enabler rather

than a cost center. Yet, despite these views, only

31% of organizations report they are incorporating

sustainability data and insights into operational

improvements to a great extent, and a mere 14%

do so with innovation initiatives.

The disconnect is unfortunate, but it’s also an

opportunity. We’ve typically seen a significant gap

between sustainability ambition and action. In

contrast, now nearly one-third (30%) of executives

say they have made significant progress in executing

their sustainability strategy—up from just 10% a year

ago.

While this is a dramatic jump, it is also a telling

indication of how the remaining 70% are falling short.

In this report, we’ll discuss what it takes to move from

“doing sustainability” to unlocking sustainability’s

potential.

Part One will outline the advantages of embedding

sustainability throughout an organization, and

what “Embedders” are doing differently to

distinguish themselves—including three things

about Embedders that may surprise you. For these

leading organizations, the idea of embedding or

integrating sustainability into operations will not

be new. Indeed, some of them have been pursuing

this path for years and are successfully converting

these efforts into business value. But our research

shows that most organizations have a lot of ground

to cover in moving toward an embedded approach

to sustainability.

Part Two delves into three key sustainability

business challenges that C-suite leaders tell us

they’re facing and how to address them, along

with real-world examples of companies that have

navigated the transition successfully.

executives say they have

to make trade-offs

between financial and

sustainable outcomes.

6 in 10

The sustainability disconnect

Part One

When you embed sustainability, it becomes a business transformation

accelerant versus what it is in so many organizations—a reporting or

accounting exercise.

Case in point: according to our research, spending on sustainability reporting

exceeds spending on sustainability innovation by 43%. A majority of organizations

approach sustainability as something they report on for government compliance or

to appease consumers and shareholders. Many organizations are scrambling to

handle so many varying, changing reporting requirements around the globe that

compliance, rather than real business value and results, becomes their focus.

Becoming more sustainable—rather than merely doing sustainability—entails a shift

toward embedding sustainability across the enterprise and making it a core part of all

the activities that add up to long-term value creation. Interestingly, Embedders are

actually more exacting than other organizations on tying sustainability to business

value; 53% of these organizations say that business benefits are essential for

justifying sustainability investments. And only 17% say meeting sustainability

objectives is in itself sufficient to justify investment .

Embedded sustainability means breaking sustainability out of its functional silo and

integrating it across every business unit, in particular the core functions and workflows.

That will help make sustainability part of the corporate DNA and ways of working.

What embedding

sustainability looks like

of the most embedded

say business benefits are

essential for justifying

sustainability investments

53%

of the least embedded

say the same

33%

Only

Embedding

sustainability deeper

into the organization…

Strategy

Align sustainability with

business strategy

Workflows

Incorporate sustainability

into core workflows and

processes

Organization

Enable action through

clearly defined roles and

responsibilities

Decisions

Include sustainability

considerations, data,

and metrics in key

business decisions

…drives

greater impact

More specifically, C-suite teams can achieve

embedded sustainability by driving it deeper into

the enterprise through four levels, starting with

strategy through to workflows and people in the

organization down to decisions (see Figure). The

deeper sustainability is embedded throughout the

enterprise, the more sustainability becomes part of

the core business and the greater the value achieved.

Take procurement as an example. If sustainability

metrics and criteria are embedded as part of how you

make procurement decisions—whether it’s the

suppliers you choose to engage with or the products

and services you purchase—you can couple greater

sustainability with improved business outcomes in

your supply chain. With more information and

data from your suppliers on their sustainability

performance and the challenges they face, you

can collaborate on joint solutions for efficiency

and reduced environmental impact.

Three things about Embedders

that may surprise you

Organizations that embed sustainability more deeply into their operations perform

better financially and on sustainability. And they are more likely to attribute a positive

impact from their sustainability efforts to improved performance. For example,

improving the lifetime of physical assets through better enterprise asset management

and maintenance is key to improved business performance for asset-intensive

organizations. But such operational improvements also translate into better

sustainability outcomes. (See case study, “Keeping passenger trains running

efficiently while reducing energy consumption” on page 8.)

1. They don’t spend more “on sustainability.”

Embedders aren’t buoyed by big sustainability budgets. Instead, they incorporate

sustainability data and insights broadly, into other spending and investment decisions.

In fact, organizations that embed sustainability spend slightly less on dedicated

sustainability efforts as a share of their revenue compared to organizations that don’t

embed. Yet they incorporate sustainability considerations, data, and insights in 22%

more of their operational decisions.

2. They don’t “do” more sustainability.

Embedded sustainability does not involve larger or more plentiful sustainability-

focused efforts and programs. Rather, these organizations incorporate sustainability

into their core operations and transformation efforts. In fact, they are 90% more likely

to incorporate sustainability factors into their innovation activities and 60% more

likely to include them in automation activities.

3. They don’t approach sustainability as something special.

Organizations that embed sustainability are far more likely to follow the money, rather

than treat sustainability as a special case with an elevated position that justifies itself.

For these organizations, sustainability is about long-term business value.

Three things about Embedders

that may surprise you

FIGURE 2

From doing sustainability to

being sustainable

Three ways to approach sustainability.

Only one works for real business value.

Compliance focus

Sustainability as a “project”

Embedded sustainability

Defensive and reactive to compliance

requirements

– Focus on reporting and avoiding

reputational risks

– Capacity and competence bottlenecks inhibit

real action

Initiating sustainability improvements, minimizing

reputational risks, and complying with legislation

– “Corporate Sustainability” department reports to

the C-level, with a task force including members

from business units and central functions

– Partial integration into the company

Anchoring sustainability in the overall strategy, achieving

business and sustainability outcomes

– Permanent integration of sustainability into the existing

corporate governance framework

– Central management, standard setting and group-wide

coordination, ensuring that group-wide perspectives are

covered in the business units

Case study

Keeping passenger trains

running efﬁciently while reducing

energy consumption

Millions of travelers in Australia choose light and heavy rail systems to get them

where they need to go. For over 100 years, the Downer Group has focused on

building those passenger trains and keeping them moving and in service. But now,

they’ve added through-life support to their repertoire, which means conducting all

the maintenance work for the trains across a span of usually 25–30 years. This has

given them an opportunity to impact sustainability, particularly when it comes to

energy consumption.

Each day, Downer puts several hundred trains into service across every major city

in Australia. Alongside ongoing management of the trains, there is an expectation

to help create a more sustainable transportation network.

To help not only improve sustainability but also business performance, Downer

created its TrainDNA rollingstock asset management platform. This platform

harnesses complex analytics and near real-time data to support predictive

maintenance efforts for more than 200 trains across Australia—providing not only

a boost to business efficiency but also to sustainability. For example, they’ve seen

a 51% increase in the reliability of the fleet.

Downer is enhancing the abilities of TrainDNA to focus on reducing energy

consumption. Through a better understanding of which rail systems are using the

most energy—how they need to respond throughout the day as the weather and

passenger demands change— Downer can optimize use and get a better outcome

for both the business and customers.

The company is figuring out how to better monitor and control equipment to

ascertain if, for example, it should adjust the air conditioning or balance the energy

load or the traction controls—major power draws—in real time based on the

number of passengers. Even small incremental energy savings in these areas can

have a huge impact on the carbon footprint for the whole network—and for the

whole country.

increase in reliability of

the train fleet due to

predictive maintenance

51%

While embedding sustainability into operations clearly yields improved results,

that doesn’t make it simple. As with any transformative opportunity, there are

complications to manage. But by looking at those doing it right—and digging into

what they do differently—a roadmap emerges for others to follow.

In this section we will explore three key challenges that organizations need to address

to embed sustainability in a way that generates business value. With each challenge,

we will unpack the obstacles, share how Embedders approach them distinctively, and

provide an action guide for any organization to put the lessons to work.

3 key challenges to

sustainable business value

1. The data

usability challenge

Ensuring sustainability data is

sourced, used, and converted into

actionable insights.

2. The business

integration challenge

Integrating sustainability data and insights into

processes, decisions, and ways of working.

Extending integration of sustainability efforts

beyond the organization and working with

ecosystem partners.

3. The people, skills, and

decision-making challenge

Creating appropriate governance

and an organizational structure so that

decisions are made at the right levels

to drive sustainability across teams

and functions.

Part Two

Insights buried in disparate data dumps

Executives recognize the importance of data to achieving sustainability objectives;

82% agree that high-quality data and transparency are necessary to succeed. Yet,

despite recognizing the link between data and sustainability success, only about

four in 10 organizations can automatically source sustainability data from core

systems such as ERP, enterprise asset management, CRM, energy management,

and facilities management. And a similar share of organizations are able to integrate

sustainability insights for decision-making when using these same core systems.

The adage “if you can’t measure it, you can’t manage it” applies here but taken a

step further. Meaning, if you can’t even access the data that paints the picture of

sustainability throughout the organization, no course of action presents itself

based on real-world operations and metrics.

The other main consideration is that it’s not necessarily the volume of data that

is helpful—it’s how the data that organizations can collect is used. Developing

sustainability data insights, incorporating them into operations, and continuous

monitoring make a positive difference for business value. In short, it’s what you

do with it that matters.

Only 4 in 10 organizations can

automatically source sustainability data

from core systems such as ERP, enterprise

asset management, CRM, energy

management, and facilities management.

Data usability

Challenge 1

Perspective

Generative AI

Generative AI can be a game changer for data-driven sustainability,

enabling organizations to turn trade-offs into win-wins, identify

improvement opportunities, and drive innovation at speed and scale.

And 64% of executives agree that generative AI will be important for

their sustainability efforts, while 73% say they plan to increase their

investment in generative AI for sustainability.

1. Accelerating innovation

2. Reducing energy consumption

3. Reducing waste

4. Tracking greenhouse gas (GHG)

emissions, including scope 3

5. Managing risk and resilience

Embedders’ top 5 most important areas

when using generative AI for sustainability

What do Embedders do

differently with data?

Data foundations

Organizations that have embedded sustainability are 191% more likely to have

greatly aligned their data and sustainability strategies. And they are 130% more

likely to have sourced sustainability data from across the enterprise. For example,

by sourcing relevant sustainability data from core systems such as ERP, CRM,

enterprise asset management, and energy management systems, organizations

can have greater and more timely visibility into where action is needed and

improvements possible.

Data governance

Embedders are 72% more likely to have ensured the security of sustainability data.

They’re also 63% more likely to have established consistent definitions of

sustainability metrics, which creates a common language for driving and

communicating sustainability insights. These core governance capabilities

underpin trust in the data—trust that is critical for the reliable use of that data in

strategic and operational decisions.

Data catalysts

You’ve probably heard the analogy of data as fuel. Just like fuel, it requires powerful

systems to optimize performance. Organizations that embed sustainability are

59% more likely to be using hybrid cloud for sustainability to a great extent,

enabling them to integrate data and facilitate interoperability and collaboration

from across their enterprise, whether the data resides in public clouds, private

clouds, or on premises. Indeed, many of them explicitly make sustainability a part

of their overall cloud and digital strategies. They are also 80% more likely to be

tapping the potential of AI to convert data into actionable insights and are 36%

more likely to strongly agree that they have developed generative AI use cases for

sustainability. In fact, AI can be critical for embedding sustainability. For example,

in food production, AI-driven weather technology is already assisting some farmers

in making environmentally conscious decisions that increase yields while reducing

the use of fertilizers. More broadly, AI also has vast potential for resource, land, and

water management.

Embedders are 191% more likely

to have greatly aligned their data

and sustainability strategies.

Case in point: Wintershall Dea—one of Europe’s

leading independent gas and oil companies

headquartered in Germany—has already started to

expand their business mode and invest in CCS and

hydrogen projects, which is central to reduce GHG

emission. In their transformation from an oil

producer to a carbon management company,

they’ve created Generative AI-based tools for

better and faster (30%–40%) evaluation of whether

certain areas can be used for Carbon Capture &

Storage (CCS) projects safely and profitably, and to

expedite ‘License to Operate’ approvals.

more likely to achieve great

benefits to sustainable innovation

and product/services development

from their data capabilities

83%

more likely to achieve

great benefits to reduced

energy consumption from

their data capabilities

44%

more likely to achieve

great benefits to sustainable

supply chains from their

data capabilities

40%

Embedders are better at converting data

into sustainability benefits

Case study

Data management

helps create

sustainability at scale

Steve Ford, Head of Sustainability at GPT Group , a diversified property group

listed on the Australian Securities Exchange (ASX), has been surprised to see the

broad range of environmental, social, and governance (ESG) data management

processes where many companies continue to manage data through, “a bunch of

spreadsheets, PDFs, and unlinked documents.”

This is in stark contrast to the highly automated mechanisms Ford and his team

have deployed for ESG data management for over a decade now. But it wasn’t

always this way. Roughly a decade ago, GPT teams’ use of spreadsheets and

manual tools to manage data related to energy, water, waste and emissions was

becoming untenable. Standalone legacy systems stonewalled the reconciliation of

non-financial sustainability data. ESG reporting was becoming onerous.

Since employing an ESG suite to streamline ESG data management, things have

changed for the better. Ford explains: “I have 120 assets to deal with and not

enough time to go looking for things that are wrong. Most people might only know

they have a gap in their data when something goes wrong, whereas with [IBM]

Envizi,™ I run a missing data report and I know exactly where the gaps are....”

In 2021, GPT delivered an 82% reduction in emissions on its 2005 baseline. For

GPT, finance-grade data hasn’t just enabled smarter decisions in emissions

reductions and energy efficiency, but also across related disciplines such as

procurement. “If I was chasing data all the time, I would not have time to be

strategic in my procurement. A number of my counterparts have massive cost

exposure because of that,” Ford says.

In a bid to quantify these flow-on effects, Ford’s team recently crunched some

numbers. “We found that if you took away our efficiency improvements and our

procurement savings, it would amount to a nearly $50 million increase annually in

our energy cost. This means we would be spending around three times as much for

our energy, and energy is the second biggest cost to our business,” says Ford.

In 2021, GPT delivered an

82% reduction in emissions

on its 2005 baseline.

– Start with the data you have. Ascertain what sustainability data

exists within your enterprise, where it resides, and how it can be

used to inform decision-making. Don’t make inadequate data an

excuse for inaction.

– Align your sustainability and enterprise data strategies with a view

to put in place the required data sourcing, integration, governance,

and catalysts to enable progress.

– Work toward a sustainability data fabric across the enterprise to

enable data to flow where needed for insight and action. It can

enable you to optimize the potential of your sustainability data,

foster data sharing, and accelerate data initiatives.

– Establish data governance principles with ecosystem partners to

allow for shared data and co-creation of innovative initiatives.

– Tap hybrid cloud, AI, and generative AI to scale the value and

impact of your data, accelerate innovation, and enable insight-

driven decision-making.

Action guide

Navigating the

data usability challenge

Data usability

Focusing on workflows with greatest impact

Integrating sustainability data and insights into core operations creates

a foundation for better business sustainability outcomes. While some

organizations are taking rudimentary or partial steps to integrate sustainability

into various parts of their organization, full integration of sustainability into core

business functions and operations is limited. Interestingly, though, executives

expect a rapid increase in the level of integration over the next three years.

Business integration

Challenge 2

50%

45%

40%

35%

30%

25%

20%

15%

10%

+55%

Operations

and

manufacturing

+82%

Procurement

+73%

Customer

engagement

+132%

Finance

+31%

Supply chain

+34%

Information

technology

+105%

Enterprise

asset

management

+115%

Energy

management

Today 2026

FIGURE 3

Sustainability integration

in the organization

IT is one of the functions with the highest level of

sustainability integration today. This is perhaps

unsurprising since “greening IT” offers many win-win

opportunities for achieving cost efficiencies and

reduced environmental impact. For example, with a

hybrid cloud platform, it is possible to reduce energy

use and costs through optimized workloads and

data across an organization’s multiple cloud

environments—whether it be public clouds, private

clouds, or on premises. This can drive reduced costs

and lower energy and resource consumption.

Each organization must understand where it can

have the biggest material impact for the business

and the environment. And organizations that embed

sustainability excel at this. In fact, they are three

times more likely to strongly agree that they are

targeting sustainability efforts at the functions,

entities, and activities with greatest impact.

More specifically, sustainability must be embedded

across the enterprise in the workflows that have the

greatest impact. Organizations that successfully

embed sustainability do just that: they’re 79%

more likely to create sustainable workflows across

traditional process silos. Take the order-to-cash

workflow as an example. This cuts across several

functions and processes, such as sales, distribution,

inventory management, and customer engagement.

To make the workflow more sustainable and efficient,

organizations can leverage AI-infused process mining

to discover, analyze, and pinpoint hot spots for

improvement across business processes based on

event logs and IT data. Through task mining—the

analysis of human actions and “clicks” to identify

the most frequent tasks—they can obtain a

comprehensive set of insights to strategically

transform operations and drive automation

strategies. These insights can, in turn, drive

sustainability improvements, business efficiencies,

and increased ROI.

But Embedders don’t stop at their own walls. Rather

than worry about weakening their competitive

position as a result of being a first-mover on

sustainability, they enhance business value through

shared sustainability efforts with their ecosystem.

They create common open sustainability standards

and definitions to help ensure a shared language for

cooperation. Based on these standards, they can

create a set of common sustainability capabilities

with partners and tap the latest innovations and

technologies. For example, Embedders are 93% more

likely to be cocreating generative AI sustainability

capabilities with their partners.

Embedders are 93% more likely to be

cocreating generative AI sustainability

capabilities with their partners.

Navigating the business

integration challenge

– Extend sustainability beyond the sustainability function and play

offense on sustainability across the enterprise.

– Identify workflows, functions, and assets with the biggest

sustainability impact as well as potential quick wins. Create a roadmap

of improvement opportunities for short, medium, and longer term.

– Drive changes to core processes and functions that yield real impact.

Don’t limit action to tinkering at the edges.

– Find the money, get the money, keep the money. Use quick wins to

unlock rapid value. Reinvest savings in the next phase of initiatives and

unlock larger value pools. This makes sustainability a self-financing

transformation initiative.

– Incorporate sustainability as part of key operational improvement

and transformation initiatives that drive top- and bottom-line growth.

Action guide

Business integration

People, skills, and

decision-making

Challenge 3

People and skills

Successful large-scale transformations have empowered, engaged people at the

center. Leaders can’t “make” a transformation happen—that takes teams who want

to see it so. A major part of team empowerment and transformation is skill building;

the C-suite executives in our survey cited a lack of sustainability skills as the top

barrier to sustainability progress.

As with the first two challenges, embedders are proving up to the task. They ensure

their sustainability efforts are supported by reskilling and talent development.

Decision-making

With the right skills, people then need to be empowered with the required data and

insights to incorporate sustainability in their decisions. And they need to have the

decision rights to act where it matters. Sustainability should have clear guardrails

and direction from the top but be activated throughout the organization from the

bottom-up. In fact, to embed sustainability, people across the enterprise should be

encouraged to integrate sustainability into their day-to-day tasks and decisions.

more likely to be reskilling

to accommodate

sustainability driven job

changes to a great extent

83%

Embedded organizations are

more likely to be developing

talent and skills within the

enterprise and operate as a

learning organization to a

great extent

58%

Embedded organizations are

Case study

Integrated SAP helps enable

lower carbon footprint

Neste is a market leader in renewable diesel, sustainable aviation fuel, and

renewable polymers and chemicals, based in Finland. As a downstream operator,

Neste’s biggest impact on sustainability comes from its sourcing strategy; that is,

where it gets the resource inputs that go into its refining operations. Under the

conventional refining model, operators make their finished fuel products from the

crude oil and gas extracted through traditional upstream operations: namely

drilling. Apart from technical issues, where those supply chain inputs—or

feedstocks—come from doesn’t matter much to refiners. It all turns into the fuel

for cars, planes and many, many more things that burn it, thereby adding net-new

carbon to the global environment in the process.

What sets Neste apart is its focus on renewable fuels, which are created from

renewable feedstocks, a broad range of waste residues such as used restaurant

cooking oil and animal fat. The fact that renewable fuels are derived from

renewable sources means they don’t add anywhere near the carbon as tradi-

tionally sourced fuels. And that makes them increasingly attractive to fleet-owning

customers such as airlines and transport companies that see renewable fuels—

which perform just as well as standard fuels—as a way to quickly and sharply

shrink their carbon footprint.

When it decided to focus on renewables, it was a sea change for the company:

“The supply chain for renewable products is quite different from that of the

traditional oil business. It was in many ways a new kind of business, and we

needed a new foundation to build it on,” explains Marko Mäki-Ullakko, Head of

Integrated ERP, Neste.

The company decided to do this with an integrated SAP S/4HANA® solution.

The end-to-end visibility provided by integrated SAP has helped improve the

company’s agility in terms of finding and incorporating new feedstock sources into

its refining process. And that, in turn, has helped Neste increase its renewables

production capacity, which is expected to reach 6.8 million tons by the end of

2026.

At present, more than 90% of Neste’s total renewable raw material inputs

come from waste and residue products, and all of its renewables refineries are

capable of running on 100% waste and residue raw materials.

More than 90% of Neste’s total renewable

raw material inputs come from waste and

residue products, and all of its renewables

refineries are capable of running on 100%

waste and residue raw materials.

– Make skills and talent development a central part of your sustainability

journey, not an afterthought.

– Identify skills needs and bridge any existing and anticipated future

skills gaps either through internal efforts or by tapping your ecosystem

of partners.

– Allocate decision rights on sustainability to the appropriate levels of

the organization to drive maximum impact. Don’t centralize all

decision-making at the top.

– Democratize access to sustainability insights across the organization

and make relevant data accessible where needed.

– Embed sustainability considerations and metrics in key strategic

and operational decisions.

– Ensure sustainability is addressed within your ecosystem by making

it a topic of discussion when other strategic ecosystem elements

are decided.

Navigating the people, skills,

and decision-making challenge

Action guide

People, skills, and

decision-making

Sustainability responsibilities often were dispersed across the

C-suite or led by the CEO. Now, though, the Chief Sustainability

Ofﬁcer (CSO) is emerging as a more prominent and clearly

deﬁned leader in many organizations.

Increasingly responsible for sustainability strategy, execution, and

performance, the successful CSO must become an orchestrator of change

across the enterprise rather than run a specific sustainability function/

program. This operational approach is key to embedding sustainability

into the business.

No longer a one-off or an island, sustainability run by CSO-as-orchestrator

brings its own implication—the ability to influence spend across the

organization will be more important than the actual sustainability budget.

To do so, the CSO needs to be able to engage effectively with other C-suite

members, understand how sustainability can become part of their agenda,

and speak their language, whether it’s the CFO, CIO, COO, CPO, CSCO,

or the CEO.

Bringing it all together:

The Chief Sustainability

Officer as change agent

Sustainability run by CSO-as-orchestrator

brings its own implication—the ability to

influence spend across the organization

will be more important than the actual

sustainability budget.

The CSO comes of age

The redefined role of the CSO is happening as enterprises are at a critical

inflection point on their sustainability journey. In the increasingly disruptive,

complex world C-suites must navigate, one crisis seems to follow the next

and sustainability can easily be sidetracked as other priorities take

precedence. But while each disruption may appear as its own discrete

challenge, they share common threads. To successfully navigate one

challenge, you must understand how it connects to others. Sustainability

is thus part of a greater evolving fabric of elevated risk and uncertainty.

The route to future business value can’t circumnavigate or sideline

sustainability. It has to be embedded.

FIGURE 4

The CSO is now the go-to in all

major sustainability areas

Strategy

2022 Today

Targets

2022 Today

Budgeting

2022 Today

Performance

2022 Today

Reporting

2022 Today

CEO

CSO

COO

CFO

CMO

CSO

CEO

COO

CTO

CINO

COO

CEO

CIO

CSO

CFO

CSO

COO

CEO

CMO

CSCO

CFO

COO

CSO

CEO

CMO

CSO

CFO

CEO

COO

LoB

CSO

CCO

CMO

CFO

CIO

CSO

CSCO

LoB

COO

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It’s time to move from “doing” sustainability

to embedding sustainability as a core part of

the business. It’s good for the world and for

business value.

Oday Abbosh

Global Sustainability Leader, IBM Consulting

Oday.Abbosh@ibm.com

linkedin.com/in/oday-abbosh-

100b2565/?originalSubdomain=uk

Christina Shim

VP, Global Head of Product Management & Strategy,

IBM Sustainability Software

Christina.Shim@ibm.com

linkedin.com/in/christinashim/

Elisabeth Goos

EMEA Leader, Sustainability Services, IBM

elisabeth.goos@ibm.com

linkedin.com/in/elisabeth-goos-7022a136/

Authors

Arun Biswas

Managing Partner, Strategic Sales &

Sustainability Consulting, Asia-Paciﬁc

arunb@sg.ibm.com

linkedin.com/in/arun-biswas/?originalSubdomain=sg

Romas Pencyla

Americas Leader, IBM Sustainability Services

Romas.Pencyla@us.ibm.com

linkedin.com/in/romas-pencyla-148a21b/

Jacob Dencik

Chief Economist and Global Sustainability

Research Leader, IBM Institute for Business Value

jacob.dencik@be.ibm.com

linkedin.com/in/jacob-dencik-126861/

Related reports

In their own words:

How CEOs are forging paths to sustainability

IBM Institute for Business Value. January 2023.

https://www.ibm.com/thought-leadership/insti-

tute-business-value/en-us/report/ceo-sustainability

The ESG data conundrum

IBM Institute for Business Value. April 2023.

https://www.ibm.com/thought-leadership/insti-

tute-business-value/en-us/report/

esg-data-conundrum

CEO’s guide to generative AI for sustainability

IBM Institute for Business Value. 2023.

https://www.ibm.com/thought-leadership/insti-

tute-business-value/en-us/report/ceo-generative-ai/

ceo-ai-sustainability

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contact the IBM Institute for Business Value at

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9GOGKOGZ-USEN-02

1 All data in this paper is from a recent survey conducted

by IBM Institute for Business Value in collaboration

with Oxford Economics of 5,000 executives across 22

industries and 22 countries conducted in the second

half of 2023. In addition to descriptive analysis, the

data from the respondents was analyzed to allow for

a segmentation of the sample according to how

embedded sustainability is in the enterprise. Based

on this segmentation, analysis was conducted on

differences in sustainability and business outcomes,

operational practices and approaches to enabling

progress on sustainability.

2 Biswas, Arun, Elisabeth Goos, and Jacob Dencik. The

ESG data conundrum. IBM Institute for Business Value.

April, 2023. https://ibm.co/esg-data-conundrum

3 “Predictive maintenance. Predictable trains.” IBM.

Accessed on February 21, 2024. https://www.ibm.

com/case-studies/downer

4 “Drilling into data to transform the oil and gas

industry.” IBM. Accessed on February 21, 2024.

https://www.ibm.com/case-studies/wintershall-dea

5 “Sustainability at scale, accelerated by data.” IBM.

Accessed on February 21, 2024. https://www.ibm.

com/case-studies/gpt-group

6 “A flexible supply chain produces more renewable

fuels.” IBM. Accessed on February 21, 2024. https://

www.ibm.com/case-studies/neste

7 Ibid.

8 Ibid.

Notes and

sources