Profitability vs. Sustainability: Not an option or a choice

Cristina Palmaka, President, SAP Latin America and Caribbean

As business leaders, we are responsible for some of the most important decisions in our organizations. Much like a beacon, we are expected to guide our teams in the right direction toward business success and positive outcomes, with robust plans and strategies that are equally profitable and sustainable.

Every day I speak with CEO’s across Latin America who perceive they have to make a choice: Should they concentrate solely on making their businesses profitable, or should they turn to implementing sustainable actions, especially as consumers shift their preferences towards sustainable products, investors and employees demand responsible action, and regulators push for new legislation.

The reality is that there is no need to choose one over the other. Instead, we should be equally committed: On one hand, to continue developing successful and profitable companies, and on the other, defining and adopting a clear path for positive social impact and sustainable growth. It is the only way of truly achieving business success and face our responsibility to our stakeholders, communities and society at large.

Throughout decades, world leaders and decision-makers have assessed the impact of mankind on achieving a sustainable world for all. However, the most important plan of action in the recent years, for future generations to inherit a viable planet, has been the United Nations’ 17 sustainable development goals.

These give us a more structured approach at how we can secure a sustainable planet, while establishing that sustainability is not only about the environment – even though climate change is probably one of the biggest challenges we’re facing right now. Sustainable development means reducing poverty, hunger, inequality; providing quality education, good health, clean water, affordable energy and decent work… and I could go on and on.

Many of the decisions we take on as businesses are far reaching, and they are in often connected to the world’s sustainable future. In fact, the private sector –which represents 75% of global GDP—plays a very important role in achieving the United Nations’ 17 sustainable development goals by the year 2030.

However, it’s just not realistic to embrace and tackle all 17 goals at once. So, what should businesses do? I suggest focusing on the goals where a company can have the most positive impact and contributions, within their industry. As we know, it’s the sum of the parts that matters, and collectively, we can contribute to the overall goal of achieving a sustainable planet.

Yet how many enterprises are executing on plans to support a more sustainable world? The answer is, not as many as needed. Per the Accenture UN Global Compact Study, 48% of surveyed CEOs confirmed that their companies currently implement sustainability actions in their business operations. And if we dig a little deeper, in another study from Oxford Economics in partnership with SAP, only 12% of surveyed executives said they have fully implemented their sustainability initiatives.

This is where technology innovation comes in as an enabler! Establishing clear actionable sustainability plans, with technology at the center, will help organizations achieve outcomes that are equally profitable and sustainable and can be executed faster and more effectively. For example, the moment you start to measure, keep track, and take action to reduce your carbon emissions , you’ll notice how the effect goes both ways – toward sustainable impact in the form of climate action, and successful business outcomes. Similarly, by focusing on optimization of the supply chain with a focus on key areas such as responsible design, responsible sourcing and marketplace, responsible production, responsible consumption, and resource recovery and reuse, companies can transform into circular businesses.

As leaders, we can influence great change. I have no doubt that technology will help us make sustainability profitable and profitability sustainable! Are you ready?