Sustainability: The business imperative
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Sustainability: The business imperative

Clare Simmons — May 2014
An interview with Alison Rowe, global executive director sustainability at global ICT vendor Fujitsu.

For many organizations, justifying sustainability efforts poses significant challenges. From defining metrics that measure their impact and aligning environmental and social goals with economic objectives, to engaging staff at all levels, obstacles within the business abound even as external governance applies additional pressures. While 80% of CEOs believe it’s important to measure and try to reduce their environmental footprint, just 26% say they’re addressing the risks of climate change as a priority over the next three years, according to PwC’s latest global CEO survey.

Alison Rowe, global executive director sustainability at Fujitsu, Board Member of the Future Business Council and member of the World CSR Congress’ Advisory Council, discusses the leadership approaches and technology investments required to make sustainability part of the corporate DNA, something that has so far remained out of reach for many organizations.

I-CIO: Many businesses find it challenging to make a business case for sustainability. How should sustainability be supported and integrated throughout an entire business?

Alison Rowe (AR): The business case for sustainability starts with knowing what to measure and how to report that information in business language. People often struggle because they’re still measuring impact in terms of energy savings, when in fact we need to be far broader and more ambitious, and gauge operational resiliency.

It should articulate the impact and value of sustainability to the core parts of the business — for example, by undertaking these employee programs, the savings in attrition equal this, or by creating new services and products, the potential customer reach and revenue growth equals this. The key is an integrated business case, rather than several separate ones.

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Meridian Energy's Makara wind farm

Fujitsu’s Consulting Sustainability team worked with Meridian Energy [New Zealand’s largest renewable energy generator] on a strategy to maintain its position as one of country’s most sustainable companies, and it’s since achieved an ICT benchmarking score of 80/100. That’s truly best practice.

ICT should help build a safer, more prosperous and sustainable society, where knowledge is continually harnessed and people are empowered to innovate. We call this vision a Human Centric Intelligent Society.

I-CIO: The economic downturn of recent years clearly put financial pressures on companies and government agencies. How do economic cycles impact the cost justification and business benefits perceived around sustainability?

AR: People often talk about the sustainability agenda being less important in times of economic crisis, but this is precisely when we can achieve even greater efficiencies across all activities. Sustainability is often seen as an add-on that can be easily removed, but we cannot expect economic growth to continue in the future without taking into account the full cost of our environmental and social impact.

If the business case for sustainability is based solely on financial quantifiers that are directly influenced by changes in economics, such as carbon price, then it is incomplete and liable to make businesses neglect sustainability when budgets are tight. Rather, businesses must focus on a triple bottom line – one that encompasses economic, social and environmental measures and results. Incorporating the environment into economic calculations puts you at a distinct advantage, whereas neglecting environmental costs poses a serious risk.

I-CIO: Which are the key performance metrics for sustainability and how do governance demands dictate those?

AR: Currently, energy, carbon and greenhouse gas emissions are most commonly measured, but in the near future we’ll need to start quantifying metrics such as ‘natural capital,’ ‘societal impact’ and ‘quality of life.’ It’s vital to ensure everyone understands what those metrics really mean — natural capital is a concept some people might understand as biodiversity, without realizing that it includes food, water and all those other by-products of nature.

From a governance point of view, we need to be really clear about what these terms mean within a business context and how they are best measured. The same goes for societal impact — you need to put in place real, recognized values.

“That’s often where the sustainability industry has failed — by becoming too niche.”

At Fujitsu, we have a global sustainability board that brings different parts of Fujitsu together to look at the business plan and understand the different market drivers across our geographies. That diversity of approach works providing there’s common alignment in what we’re doing, what it means, the language we’re using and how we report it.

There is an element of translation needed across those cultural boundaries, but we must endeavor to talk a consistent business language, rather than a specialist sustainability language. That’s often where the sustainability industry has failed — by becoming too niche, too specialist and too expert. It’s only through a common, accessible language that we can engage people right across the business, rather than staying out on the sidelines.

I-CIO: How should businesses utilize the society-wide debate around sustainability to best engage staff, secure leadership buy-in and establish credibility?

AR: Staff need to feel personally involved and rewarded, not only for sustainability in the workplace but also for their efforts in the community and at home. Setting up knowledge centers, engagement platforms and rewards is key — staff need to feel proud of their company, believe in its commitment to sustainability and have a voice in determining next steps.

As for leadership buy-in, there’s often too much focus on risk and not enough on opportunity. Working for a Japanese company, I’ve learned the importance of broad stakeholder management (nemawashi), using different hooks to draw different people in. The size of that hook varies, and sometimes it’s about appealing to the intuition of our leaders. For instance, early on in my career at Fujitsu, I presented to a senior executive whose intuition had told him he needed to act, and it was my job to show him how.

“In Japan, sustainability isn’t a separate business case.”

In terms of institutionalizing sustainability, we are still in the early phases as a sector — this is a symptom of attitudinal shift. Often the business cycles for sustainability are much longer and you can feel as though you’re constantly in pilot phase and never reaching implementation — that’s what holds us back and we need long-term thinking from business leaders to overcome this.

It’s quite typical for a Japanese company to have a 30- to 50-year plan and I’m currently working on mid-term goals that build towards our long-term vision. In Japan, sustainability isn’t a separate business case — it’s part of living in harmony with nature and accepting long-term responsibility as a company.

I-CIO: Does cloud computing make for a more or less sustainable business world? Which other technologies and services are making ICT more energy efficient?

AR: Cloud computing has the potential to deliver significant sustainability benefits for individuals, organizations and society as a whole, but it’s important to differentiate cloud models and their potential impact. A public cloud, due to its economies of scale and sharing of infrastructure between many customers, is able to deliver greater energy and emissions reduction than a private cloud. It’s the inherent characteristics of cloud, such as scalability, infrastructure sharing, dynamic provisioning and need-based consumption, which deliver the real benefits.

Two other technologies will be key to the future of sustainability. Firstly supercomputing, which is critical for climate change modeling, environmental process simulation and forecasting and planning for natural disasters — all depend on massive amounts of raw computing power. These applications typically involve running a huge number of simulations of real-world events or complex calculations at speed. In Singapore, Fujitsu is helping the government understand the urban environment and develop solutions, and in Japan we’ve helped model the impact of tsunamis.

The deployment of sensor-based solutions will also change how we operate and interact with our environment. In Saudi Arabia, we’re working with the Saudi Industrial Property Authority to build a monitoring system that uses sensors to measure air and water quality.

“If you can start to visualize invisible pressures and anticipate future scenarios, you can respond proactively.”

There are also massive opportunities for sensor technology in the agricultural industry, where it’s deployed to enable remote control and monitoring via smart devices. This year, Fujitsu expanded its Intelligent Society Solution Akisai Food and Agriculture Cloud, adding a service that uses big data to optimize cultivation schedules, an entry-level production management service for small-scale farms, a production, processing and sales SaaS, and an agriculture accounting system. All major challenges — population growth, climate change, weather and resource scarcity — relate back to food, so anything we can do to optimize food production is very exciting and a growing area of focus.

I-CIO: What will be the key sustainability issues and challenges for the next generation of sustainability executives and CIOs in the next decade?

AR: They’ll be asking how they ensure the contribution we make to society is relative to the size of our business, how they invest in the right social activities and measure value in terms of social benefits, and how they can shift thinking from short to longer business cycles.

Today, companies are starting to see CO2 as a financial value. In the next five to 10 years natural capital and societal capital will become equally important measures, and executives will need to consider investment in both if they’re to grow their company and enrich society.

Meanwhile, regulations are increasing and becoming more complex. We are part of the establishment that designs these, sometimes setting ourselves even tougher internal criteria to exceed expectations and prepare ourselves for long-term requirements. If you can start to visualize invisible pressures and anticipate future scenarios, you can respond proactively through innovation and strong, measured steps towards solutions. I see Fujitsu’s involvement in this process as an opportunity rather than a burden.
First published May 2014
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