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Most chief executives know that sustainability is good for business–but very few CEOS will say they are putting those objectives ahead of profits.
At Davos, CEOs were quoted as saying that they just want ESG to go away and a new phrase has even been coined: “green hushing.”
For statistical confirmation, look no further than a global survey that my company did of 2,000 CEOs. We found that most businesses (84%) are prioritizing commercial objectives over sustainability even though almost all (95%) agree that sustainability is either a top or high priority.
In the survey, CEOs (82%) even said that they would accept regulatory penalties to avoid taking on sustainability initiatives because of the cost and difficulty of delivering such projects.
As a CEO, I understand fully the importance of serving our shareholders with a strong financial performance every quarter.
However, there are costs to inaction. Beyond the monetary penalties of non-compliance, most leaders (84%) believe that without a clear sustainability strategy, they are also likely to lose staff.
Companies don’t have to be torn between commercial and sustainability objectives. The right application of mission-critical technologies can make enterprises more connected. When this happens, and data is free to move around and be accessible to everyone who needs it, we will start to see progress in many areas at once.
Insights into how a company can streamline its business process and reduce energy use are not only good for the environment but also for profitability. Companies can fulfill their sustainability goals by increasing efficiencies, such as monitoring and reducing energy consumption, tightening industrial processes, and improving logistics for tracking and asset management.
Cloud, data integration, and edge computing are delivering visibility across expansive operations via the Internet of Things (IoT)–sensors and devices capable of making decisions about the data they capture.
The promise of constant connectivity that integrates devices across a range of functions, as well as monitoring and controlling devices at multiple sites, has become a staple of sustainable operations.
In fact, IoT is being used now like never before–and it has even greater promise for the future as companies continue to digitize their operations. The global IoT market is projected to grow from $478.36 billion in 2022 to $2,465.26 billion by 2029, at a CAGR of 26.4% in the forecast period
One example is something as basic as compressed air, which is essential to industrial production–powering machinery, valves, and hand tools in industries from manufacturing to mining and power generation.
It takes electricity to compress the air. Thousands of liters of compressed air can be wasted because consumption is not monitored, and leaks go undetected. In a worst-case scenario, reports say as little as 8% of the total energy supplied to a compressor is converted into useful energy to do the work at the point of use.
Improved efficiency in the generation and use of compressed air is an important source of energy savings and increased sustainability.
Another example of how IoT can make businesses more profitable and sustainable can be found a world away in Australia, where the drought-prone country faces numerous challenges with its water supply: undetected water loss and theft, lack of visibility in usage data for water consumers, and high costs and compliance issues due to inaccurate data.
With IoT, average water usage per customer is being substantially reduced by identifying leaks and water theft and promoting water conservation with user-friendly apps.
The truth is that improving sustainability improves profits because it makes operations more efficient. Investors are looking for clear strategies–and so are employees. There isn’t a shortage of targets and ambition.
However, there is a shortage of real plans and tangible actions that are really going to get organizations there. Let’s use technology to help us achieve our goals.
Sanjay Brahmawar is the CEO of Software AG.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
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