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Leveraging a sustainable value chain for profitability and growth

Sustainability is a critical survival strategy for businesses; CEOs prioritize it to foster growth and meet regulations.

21. February 2024Iver Lauvsnes

Value chain for a sustainable future

In today's business world, adopting sustainable practices is no longer optional but necessary for survival and growth. Our recent survey findings confirm sustainability as the top priority of the CEO's strategic considerations, signalling a broader shift towards change spanning the entire enterprise and its operations. Furthermore, regulations like CSRD and European Climate Law pressure companies on their net-zero emissions across scopes 1, 2 and 3. According to a recent IDC market research commissioned by T-Systems, only 23% of companies are tracking CO2 emissions from their suppliers, while 34% are developing those policies. This gap illustrates the road we must navigate to achieve a sustainable value chain.

Sustainable value chains redefine operations

A sustainable value chain is much more than just a buzzword - it's an essential part of the sustainability strategy. It highlights everything from raw material extraction to final product/service distribution. By operating in this way, organizations can significantly reduce their emission footprints while fortifying operational resilience, thus creating a win-win situation. Companies fusing a digital strategy with sustainable supplier integration can amplify synergies significantly. Deploying technology encourages efficient resource utilization and assures transparency, an expectation from modern clients and investors. This collaboration results in a sustainable supplier network acting as a responsible cornerstone of the broader ecosystem.

Striving for net-zero

green footprints leading up concrete stairs

Moreover, companies today are engaging in aggressive competition not just on financial metrics but also on environmental ones. The commitment to a 'net-zero' strategy, with organizations pledging to reach a state of zero net emissions directly and indirectly as early as possible. These aspirational goals require rethinking and reengineering the supply chain and partnership models. Reimagining and rebuilding the value chain requires selecting partners with sustainability as a core part of their strategies. Such collaborative efforts can ignite innovation and generate value for all stakeholders. As an example, Vestas made sustainability a main priority across all operations and suppliers. They introduced an extensive circularity plan and management framework, with carbon reduction goals approved by the Science Based Targets initiative. According to the latest research, their efforts have made them the most sustainable company in the Nordics and number three worldwide.

Sustainability is a business opportunity

A recent market research study conducted by IDC on behalf of T-Systems finds that sustainability is perceived as a risk factor among Nordic companies. This is a short-sighted strategy. With the enforcement of the EU Corporate Sustainability Reporting Directive (CSRD) at the beginning of this year, the natural focus is to comply with the massive reporting requirements on ESG factors. However, the era of corporate sustainability beholds much greater perspectives. The transition to greener can provide new revenue streams and futureproof your business.

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Walking the path towards a sustainable value chain is not simply to meet regulatory demands, it's a strategic move offering growth and competitiveness. Fundamentally, "money talks"– and sustainability must also drive profitability. By aligning with sustainable partners and utilizing technological advancements, the move to sustainability becomes a monetarily viable strategy. Learn more about how to leverage sustainable value chain practices, used cases and technology in our market research.

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About the author
Picture of Iver Lauvsnes

Iver Lauvsnes

Business Developer, T-Systems Northern Europe

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