Our society has completely changed over the last nine months and now, more than ever, we’ve got the opportunity to rebuild and reset,” said Jill Standish, senior managing director and head of Accenture’s global retail practice. “And if I’m talking about rebuilding, the word is sustainability.”
But what is the new management approach? According to a new report from Accenture and the Responsible Business Coalition at Fordham University’s Gabelli School of Business, the answer is environmental, social, and corporate governance, or ESG.
Unlike a company saying simply in its sustainability plan that it has plans to “go green,” the ESG approach takes caring for the planet a step further, acknowledging care for a corporation’s investors, stakeholders, employees, and consumers. Moreover, the plan as laid out by Accenture looks not only at what a company says it is going to do but what it is already doing.
In light of the pandemic, Standish explained that decisions made now have the power to rebuild and reshape business long after the influence of the pandemic.
Technology turns the key
“The great news is, technology is really with us to help us here,” said Standish. “We’d like to say technology turns the key because there’s so much advancement that we’ve all had in technology. Things like AI, machine learning, advanced analytics, those things are at our fingertips now more than ever.
“Being able to leverage technology like advanced analytics, bringing in outside data sources, looking at it down to the local geographies, you’re going to need some advanced technology to do that,” said Standish. “And if you do that right maybe you could eliminate waste and have your supply actually meet your demand so that we’re not doing a lot of returns and we’re not doing a lot of waste.”
In many ways, the pandemic has also served to accelerate the way people look at e-commerce and home delivery. New Accenture consumer behavior research has found that post-pandemic people are looking at e-commerce and home delivery as the primary method of procuring products.
“We’re going to be looking at digital in a new way,” said Standish. “If we’re going to be looking at the acceleration of digital, then we’re going to have to take a look at how do we handle a lot of the ways in which cost builds up because we all know that delivery to home is more expensive than sending it off to a store and having consumers or customers actually pick it up.”
Utilizing technology, like AI, to help with e-commerce, therefore is crucial to figuring out how to cut these costs and determine efficient practices, from strategizing inventory sourcing locations to eliminating split shipments.
“These technologies can actually help us make sure that we are looking at things differently and matching demand with supply,” said Standish. “Sustainability is all about efficiency, so if we can understand what demand looks like, we can actually eliminate waste [and] inefficiencies and lower supply chain costs.”
Sustainability fits all stakeholders
Accenture names the four stakeholders as the employees, consumers, investors, and the planet. More than ever, employees want to work for companies that have a moral compass and a purpose, while consumers have become cognizant about aligning with companies that are outwardly speaking about the progress being made against sustainability goals.
And at the same time, investors are starting to see the progress that companies are making, or not making, as sustainability reshapes finance and business. According to Standish, investors now see ESG as material and are demanding brand-aligned data.
“Some of the things that that we [say] to clients all the time is, if shareholders are going to be evaluating against some of these metrics, how do you actually have a strategy that allows you to monitor how you’re doing, report how you’re doing, and communicate in a way that they can see it,” said Standish. “Those dashboards, or that feedback loop, is so incredibly Important today so that you know where you stand, and you actually can be ahead of the game.”
Further, Standish said, new platforms can rebuild budgets through an ESG lens, quantifying the carbon emissions, water usage, and jobs created by spend, impact, and more. The challenge being that capital needs to be aligned to changing market forces while at the same time accepting that historical planning is no longer valid.
“Fundamentally our cost structure is very different,” said Standish. “And as we approach how to look at cost differently, I think the whole aim here is can you look at it with an ESG lens, if you’re going to change the way in which you source product or even if you handle delivery to consumers and you look at it through the lens of cost, why don’t you also measure it against how that would affect an ESG score?”
With uncertainty continuing to loom over the school year and holiday shopping, it is important to have as much information as possible and plan for as many scenarios as possible to enable quick decision making.
“Where you had a gut feel and maybe history to guide you, I think now more than ever you need to leverage some outside help,” said Standish. “Leveraging not just what you know, which is how to run your business, but leveraging what’s happening out there and using it to make spur of the moment decisions is going to be the way that companies need to react.”