Recent BCG Article Underscores Importance of Sustainability Data in the Future
Summary:
In a recent BCG article, the escalating demand for green data is highlighted, presenting a substantial opportunity for information services providers in sustainability. The article suggests three key practices: focusing on existing clientele to address current challenges, aligning on specific value targets, and anticipating the impact of evolving regulations. It describes a crowded sustainability information ecosystem with confusion among stakeholders. Despite awareness, traditional information services companies struggle to establish significant sustainability revenue streams. The article outlines a strategic framework for success and envisions three phases in the sustainability journey, urging swift action to contribute to customer success and accelerate the path to net zero.
Overview:
A recent article by BCG underscores the increasing demand for green data as well as the vast opportunity it presents for information services providers. Three crucial practices are recommended for success in the sustainability space. First, companies should focus on existing clientele, addressing the sustainability challenges faced by current members rather than pursuing new demographics. This minimizes risks and facilitates the necessary upskilling within the organization. Second, aligning on specific value targets is essential as there are three major categories identified: risk management, financial upside, and societal impact. Tailoring offerings to each target segment is emphasized for effective market penetration. Lastly, anticipating the impact of evolving sustainability regulations is highlighted, urging companies to build monitoring capabilities and optimize internal operations to stay ahead.
The article portrays a crowded sustainability information ecosystem with various stakeholders, including data companies, software providers, consultants, and accounting firms, all competing to establish a foothold. The market is described as lacking clear definitions, leading to confusion and overlap in the available offerings. Despite the competition, the article notes that traditional information services companies are aware of the opportunity but have struggled to build significant sustainability revenue streams. It emphasized the importance of acting swiftly and strategically to avoid common pitfalls which rovides a framework for success in the rapidly changing sustainability landscape.
The future trajectory is outlined in three phases. In the short term (2024-2025), companies should focus on foundational targets, such as measuring performance and setting sustainability KPIs, to cater to investor and customer demands. In the medium term (2025–2028) companies should anticipate a wave of more sophisticated use cases, including new reporting and compliance regimes and the development of innovative products and services. Over the long term (2028–2030 and beyond), sustainability materiality is predicted to go mainstream, requiring information services providers to help customers scale nascent capabilities into robust systems, demonstrate real progress toward net zero, and navigate regulatory scrutiny on a global scale. The article concludes by emphasizing that companies acting now can contribute to customer success, build sustainable growth, and play a vital role in accelerating the journey to net zero in the years ahead.
Source: https://www.bcg.com/publications/2024/sustainability-data-is-a-big-opportunity-in-information-services?linkId=322493825
