Closing thesustainability
gap
Organizations are enthusiastic aboutsustainability and they think they’re
excelling. In fact, they have barely
started. The Fujitsu Uvance research
report explores this gap between theirperception and reality, and we look into
how technology can close it.

Contents
03	The sustainability gap
05	Organizations have the sustainability
feel-good factor
10	The feel-good factor isn’t translating
into progress
14	Technology is the great Sustainability
Transformation accelerator
16	Technology + sustainability = true
Sustainability Transformation
19	Change Makers have the power to makean impact
22	For Sustainability Transformation success,act like a Change Maker
27	Securing a successful and straightforward
Sustainability Transformation

Back tocontents
buttonClosing the sustainability gap

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The sustainablity gap“Sustainability is now a major disruption. Business as usual is no longer an
option.” That’s the assessment of Ioannis Ioannou, Associate Professor ofStrategy and Entrepreneurship at London Business School.
Organizations agree with him. Sustainability is now top of the agenda, andthey are trying to improve their impact on the world across three pillars of
Sustainability Transformation: environmental, economic and societal.
But our new research has uncovered a problem: organizations’ enthusiasm
for sustainability is not being matched by real progress. This is thesustainability gap.

A disappointing reality
For example, 61% of organizations say they’re advanced on theirsustainability journeys, but in reality less than one in 10 have completed
major sustainability imperatives such as developing sustainable supply
chains (9%), achieving net zero status (2%) and preparing for environmental
emergencies (7%).
That’s not all. While 77% of organizations say they think being sustainable
is the right thing to do and is ultimately good for business, 18% believe thatsustainability is just a fad that will pass.
These are some of the findings from our flagship research into Sustainability
Transformation, which we designed to understand what sustainability reallymeans to organizations today and what issues they are grappling with.
Technology accelerates progress
Our research shows that there is a key accelerator of progress that acts
to bridge the sustainability gap: technology. It identifies a small group ofleading organizations, which we call the Change Makers, that have madereal progress on their sustainability goals by powering their ef forts with
innovative technology. They lead the way on both sustainability imperatives
and technology transformation.
As a result, the Change Makers find Sustainability Transformation easier tocomplete, they’re more likely than the rest to smash their profit targets, andtheir brand reputations are more likely to be performing above expectations.

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How are the Change Makers doing it? And what can otherorganizations do to emulate their success? In this report, we analyze
the sustainability gap and explore how the Change Makers bridge itwith technology.

What is Sustainability
Transformation?
Sustainability Transformation means to transform your organization
using digital innovation to drive positive, lasting change for ourenvironment, economies and society. It’s about contributing to a moresustainable world while simultaneously ensuring business growth.

About the research
The data in this Fujitsu Uvance research report comes from a survey of 1,000
business and public sector leaders commissioned by Fujitsu and conducted
by FT Longitude, a Financial Times company, in August 2022.
The respondents represent a mix of respondents from the public sector
and businesses. Within companies, a range of functions are represented:
business leadership, sustainability, HR, line of business, finance, research anddevelopment, and IT (transformation, technology and security). And they
represent 15 countries: Australia, Canada, China, Finland, France, Germany,
Japan, Korea, New Zealand, Philippines, Singapore, Spain, Thailand, the UK
and the US.
Their organizations come from a range of sectors – architecture, banking
and financial services, healthcare, life sciences, manufacturing, media,
mobility (transport and automotive), the public sector, retail, and technology
and telecoms – and have revenues of $2 million to $1 billion+.

Closing the sustainability gap

4 / 29Organizations havethe sustainability
feel-good factor
Company sustainability reports, green advertising campaigns,
new sustainable products and services – organizations understandthe importance of sustainability. And it’s not just talk. More than
three-quarters (77%) of our respondents believe that being moresustainable is the right thing to do and that it’s good for business.
That’s correct: data from Deloitte1 shows that more and moreconsumers are adopting a sustainable lifestyle. They’re buying only
what they need, repairing items, spending money on longer-lastingproducts, and are choosing low-emission modes of transport.

1. https://www2.deloitte.com/uk/en/pages/consumer-business/articles/sustainable-consumer.html

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This is a sustainability-led culture. And the majority of leaders (55%) knowthat if they don’t act, they will not have a successful organization in a
decade’s time.

55%

of respondents know that if they don’t act,
they will not have a successful organization
in a decade’s timeThat knowledge is translating into strategy. Being a high performer onsustainability across all areas is organizations’ top priority over the next
five years, ahead of other pressing issues such as being more resilient andbuilding a good brand.

Sustainability has become organizations’ most importantbusiness objective for the next five years, after meeting
financial targets
Sustainability initiative

Other type of initiative

Becoming a high performer onsustainability across all areas

20%

Building our brandand reputation

19%

Being more resilient

12%

Being more diverse andinclusive

12%

Becoming one of the bestplaces to work

11%
9%

Creating new products
Expanding into new market
segments

8%

Aligning with UN SDGs

5%

Being a good corporate citizen

5%

Closing the sustainability gap

6 / 29Sustainability in action
Sustainability Transformation is high on organizations’ agendas, but what doesit mean in practice? Organizations have priorities across our three pillars of
Sustainability Transformation: environmental, economic and societal.

Organizations’ top sustainability goals
Environmental

Economic

Societal

1

Responding to and complying with sustainability regulation

18%

2

Developing sustainable supply chains and ecosystems

18%

3

Creating better health and wellbeing initiatives for employees

12%4

Empowering our people and customers to respond to social issues

11%

5

Creating or using carbon-neutral products

10%

6

Responding to consumer demand to be a more sustainable organization

8%

7

Driving equality in the workplace

7%8

Developing products that improve the health of broader society

7%9Preparing for environmental emergencies

5%10

Ensuring that the physical locations we operate from are environmentally friendly

5%

Knowing where to start with Sustainability Transformation can be dif ficult becauseof the breadth and depth of its scope. Melanie Kubin-Hardewig, Vice President,Group Corporate Responsibility at Deutsche Telekom, explains that organizations
must look at sustainability in the round.
“We have a long history of working on sustainability challenges – we started morethan 20 years ago,” she says. “We interpret sustainability across all metrics: E –environmental, S – social, and G – governance. Whatever framework you choose toaddress sustainability, you will always need to focus on these three aspects. We’ve
been doing this since our sustainability agenda began.”

Closing the sustainability gap

7 / 29Progress is happening
Organizations have come a long way on sustainability. No longer a “nice tohave,” it is now a strategic imperative.
“Sustainability is the mother of all disruption,” says London Business School’s
Ioannis Ioannou. “Over the past decade we have seen huge pressures on
businesses around sustainability, and we’re at a point now where the world isdemanding a new model of corporate leadership.”And organizations are making progress: 61% are already rolling out
sustainability strategies or are seeing successful results from them. Just 2%
say they have not taken any action at all.

How far have organizations got on Sustainability Transformation??

Not started
We do not take any action
on sustainability

2%

Siloed e� forts
We don’t have a sustainability
vision but business units havetheir own independent
sustainability initiatives

6%

Early vision
We have set out asustainability vision but have
not yet created a strategy toimplement it

30%

Taking action
We have set out asustainability vision and haveplanned and implemented astrategy that we are justbeginning to roll out

40%

Achieving success
We have set out asustainability vision and haveplanned and implemented astrategy that is alreadydelivering tangible benefits

Closing the sustainability gap

21%

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Not only do organizations believe they’re fairly advanced whenit comes to Sustainability Transformation, they also say that theirinitiatives are very successful.

Of the organizations that are most advanced on
Sustainability Transformation:

80%

72%

71%

say their ef forts have
had a positive impact on
their ability to meet theirsustainability targets

say it has boosted theirbrand reputation

believe it has helped
bring in more revenue

So organizations are feeling positive about Sustainability
Transformation. But Anna Rahikainen, Sustainability Director of
Finnish restaurant chain Kotipizza, explains that the key to real
Sustainability Transformation is active change. “Active sustainability
is a prerequisite for making your business and all its operations
future-proof,” she says.
Our research shows that while the feel-good factor is strong, when it
comes to the specific issues – improving the environment, economy
and society – organizations are struggling.

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The feel-good factor isn’ttranslating into progress“If a company has a sustainability plan, then I want to see evidence
that the plan is being put into action,” says Seb Henbest, HSBC’s
Group Head of Climate Transition. “What are the projects, the pilots,
the partnerships, the acquisitions – what are the real things thatorganizations are doing?”
Our research shows that organizations are failing to do those“real things.” A quarter (26%) of might have created health andwellbeing initiatives for their employees, but only 2% have achieved
net zero status. And less than 10% have completed other essential
sustainability activities, such as preparing for environmental
emergencies and developing green ecosystems.

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Very few organizations have completed important Sustainability
Transformation initiatives
Environmental

Economic

Societal

Creating better healthand wellbeing initiatives
for employees

26%

Empowering our people andcustomers to respond to andresolve social issues

16%

Developing products andservices that improve the healthand wellbeing of broader society

15%

Creating or using
carbon-neutral products

12%

Ensuring the physical locations
we operate from areenvironmentally friendly

11%

Responding to consumer
demand to become a moresustainable organization

10%

Developing sustainable supply
chains and ecosystems

9%

Preparing forenvironmental emergencies

Achieving net zero status

7%2%

Why are these organizations so slow to act? In part, it’s because making
meaningful change is dif ficult, and a sustainability mindset might not
be felt across the entire organization. For instance, 18% of organizations
believe sustainability is just a fad that will pass, 27% are not clear whose
responsibility it is to drive sustainability, and 25% are still being challenged
on sustainability investments if they don't of fer a clear return on investment.
Helge Muenkel, Chief Sustainability Of ficer at DBS Bank, says that culture
and a collective sense of purpose can remedy these issues.
“At DBS we have a wonderful vision, which is to be the best bank for abetter world,” he says. “And the latter part encapsulates our approach tosustainability. And the beautiful story behind this vision is it wasn't thebrainchild of one individual, it was actually built ground up by our 350 or
so senior leaders in a conference, when they asked themselves, ‘Why are
we doing all of this?’ So purpose is extremely important. And continuously
nourishing the culture associated with that is instrumental, as it isfundamentally the most important step we need to take.”

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Success should be measured
Every strategy needs goals that are measurable. But when it comes to
Sustainability Transformation, organizations are not yet putting the righttargets and measurement strategies in place at the start.

Organizations are not actively tracking the trickier
sustainability metrics
Chart shows organizations that are actively tracking the following sustainability metrics

Health andwellbeing data

52%

48%

Energy consumption

37%

Supply chain waste

Social impact of
the organization

35%

Executive pay/gender
pay gap

28%

Diversity mix acrossthe organization

28%

24%

Carbon footprint

Consumer/brandsentiment analysis

19%

Product mileage (fromsource to consumer)

None of the above

13%

6%

Half of organizations are tracking health and wellbeing data and energy
consumption, but these data sources are readily available. Metrics thatneed deeper expertise, such as carbon footprint and supply chain waste,
are largely overlooked. Most concerning? Six percent of organizations aretracking nothing at all.
And that’s a big problem, according to HSBC’s Henbest. “If you can’tmeasure it,” he says, “You can’t manage it.”

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Gender pay gaps aretracked inconsistently
Executive pay and the gender pay gap are only
being actively tracked by 28% of organizations,which is surprisingly low given recent publicity
around this data.

In France2, organizations whose pay gap exceeds a certain thresholdmust propose an improvement plan, and failure to improve pay
disparity within three years can result in financial penalties of up to
1% of their total payroll.
In the US state of Massachusetts3, meanwhile, employers are notallowed to ask applicants about their salary history. Instead, they
have to make them an of fer based on what their skills are worth tothem. This aims to stop low pay from following women and minorities
through their career.
And in Japan4, from next year, some organizations must disclose theirgender wage gaps on their websites.

So our research suggests that while organizations talk the talk aboutsustainability, real action is simply not a reality for many. They’re notmaking tangible progress, and they lack the culture and the hard data
to make things happen. But there is something that can help bringorganizations’ sustainability goals to life: technology.

2. https://www.internationallaborlaw.com/2018/11/27/countries-implement-new-gender-pay-gap-measures/
3. https://www.nytimes.com/2016/08/03/business/dealbook/wage-gap-massachusetts-law-salary-history.html
4. h ttps://www.shrm.org/resourcesandtools/hr-topics/global-hr/pages/japan-gender-wage-gap.aspx#:⁓:text=The%20Organization%20for%20
Economic%20Cooperation,of%20OECD%20countries%20in%202020.

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Technology is thegreat Sustainability
Transformation accelerator
More than two-thirds (68%) of organizations say that Sustainability
Transformation will not be a success without significant investments
in technology.
Before Sustainability Transformation came digital transformation, andKotipizza’s Anna Rahikainen says the two major movements are linked.
“Digital transformation and Sustainability Transformation
feed of f one another,” she explains. “To a very large extent,
Sustainability Transformation is enabled by digital transformation.
It’s a prerequisite. In the past, the narrative was very muchabout digital, but now it’s shifting toward how digital can makesustainability happen. It’s all about how we can use technology tomake Sustainability Transformation happen.”

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London Business School’s Ioannis Ioannou agrees. “A lot of sustainability
challenges are problems of inef ficiency,” he explains. “So technologies cancome in and really help us take optimization to a whole dif ferent level.
Technology plays an absolutely integral and fundamental role in
Sustainability Transformation.”
The two transformations should go hand in hand, but it's not always
easy to make that happen. In fact, transforming technology isthe biggest area organizations need help with when they pursue
Sustainability Transformation.

Organizations need support to achieve their Sustainability
Transformations, and technology is top of their lists
Chart shows the support that organizations say they need to drive Sustainability Transformationfrom a technology point of view

Help transforming
existing/legacy technology

42%

Support from sustainability
specialists in setting goals

38%

Help making thesustainability business case34%

Sponsored headcountfrom a tech vendor

30%

Support identifying
acquisition targets

27%

Help understanding "theart of the possible"

21%

Training and upskilling
existing employees

19%

HR support in changing
the organizational culture

15%

Hiring new employeeswith the right skills

15%

But those that can get this right and connect their digital transformations totheir Sustainability Transformation goals are in the best position to succeed.

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Technology + sustainability= true Sustainability
Transformation
Our research shows that Sustainability
Transformation needs sustainability andtechnology to be considered together.
Focusing on one without the other will
not work in the same way.

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Meet the Change Makers
A small group of organizations in our research are doing just this, and they
have better business outcomes as a result. Just 6% of our respondents, wecall these the Change Makers.

Where organizations fall across the Sustainability
Transformation index

Groups of organizations (%)

Respondents (%)

Overall average

10.0

Tech Leaders

Change Makers

16%

9.0

6%

8.0

Technology Index

7.0

6.0

5.0

4.0

Followers

Sustainability
Leaders

62%

3.0

16%

2.0
2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

10.0

Sustainability Index

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How we identified
the Change Makers
We analyzed our respondents’ answers to questions covering a range
of factors:

Sustainability

Technology− Performance against externalsustainability targets− Understanding of how to
use technology to drive
Sustainability Transformation− How far advanced they believe
they are on their Sustainability
Transformation journeys− Cultural traits regarding
sustainability− Specific sustainability initiatives
being undertaken− Means to achieve Sustainability
Transformation, e.g. finances, skills− How far advanced they believe
they are on their overall
digital transformation− Level of technology support
needed to complete
Sustainability Transformation− Maturity and success so far
on using technology to drive
Sustainability Transformation

Scores were assigned to organizations based on their answers. High scores
were given to organizations which performed well against each factor, andlower scores were assigned for poorer performance.
We have named the organizations that score highest on the sustainability
factors the Sustainability Leaders, and the ones that lead on the tech scores
the Technology Leaders. When an organization scores highly across bothareas, it is one of our Change Makers. The rest, which lead in none of thecategories, are the Followers.

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Change Makers have thepower to make an impact
Our research shows that the way the
Change Makers combine technology
with sustainability leads to major
competitive advantages.

Closing the sustainability gap

19 / 29Competitive advantages

Higher profits

46%

The Change Makers are more likely to smash theirfinancial goals: 46% of the Change Makers say they are
enjoying profits that are exceeding their expectations,compared with just 29% of the Followers.

Better brands

46%

The Change Makers are more likely to enjoy better
brand performance than the rest: 46% say their brandreputation is better than they expected, compared with
37% of the Followers.

Simplicity

54%

The Change Makers find it easier to achieve
Sustainability Transformation: 54% say that using
technology to power Sustainability Transformation has
been easier than they thought, and they’ve reached key
milestones earlier than planned. This compares with just
38% of the Followers.

But that’s not all. Conventional business metrics will always be important toorganizations, but in this new sustainability-driven world, they need to show they
are truly making an impact on the world. The Change Makers do that: 93% of themfeel confident they can meet their Sustainability Transformation goals on time,compared with just 58% of the rest.
And the Change Makers are expecting to make an impact. More than a quarter(27%) of Followers say they expect to see no real benefits of Sustainability
Transformation within the next decade. But only 16% of the Change Makers think
this, signaling that they have higher expectations of the positive impact they canhave on the world.

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Sustainability Transformation in action:

Deutsche Telekom

Deutsche Telekom has been committed to Sustainability Transformation for morethan 20 years, and is currently aiming to become climate neutral on all scopes ofemissions by 2040.

How will it do it?
By sorting out the supply chain
Ensuring that Deutsche Telekom’s
extensive supply chain of companies
is on the same page in terms ofsustainability is a key goal for the firm.
Potential partners are scored, among
other things, on their sustainability
credentials in terms of energy
ef ficiency and circularity. Today, thesesustainability criteria account for about
20% of the scoring weighting.

On the consumer side today, about
60–70% of equipment can be reused insome way, and are, through leasing andrenting models.
“But we now have to transfer this tothe mobile communication equipment
and the technology which is used in our
network,” says Kubin-Hardewig. “And thisis a big challenge.”

By giving back to society
But the ideal scenario is that all suppliers
are so sustainable, this process is nolonger required, explains Vice President,Group Corporate Responsibility Melanie
Kubin Hardewig. “It will take us all a few
years to get there,” she explains. “Butthat should be the vision for us all.”

By reducing e-waste“Waste often does not have a value,”says Kubin-Hardewig. “But we needto learn that it can.” This is the mantra
behind the organization’s focus on
reducing e-waste by reusing andrepurposing telco equipment.

Closing the sustainability gap

Sustainability objectives can havemultiple benefits, Kubin-Hardewig adds.
She says that reusing and recycling
technologies can have a positive
knock-on impact for consumers thatare struggling with the increasing costof living.
“We all know the challenges European
economies are facing right now, and
it is consumers who are bearing thebrunt. Af fordability is a big concern, but
reusing and recycling helps here. It reallyplays into that challenge by helping us
create better commercial of fers.”

21 / 29For Sustainability
Transformation success,act like a Change Maker
The Change Makers are an enviablegroup of organizations that findSustainability Transformation easy.
Here are five characteristics they share.

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Five characteristics ofChange Maker organizations
1.

They are communicative

Culture and communication are at the core of all
major transformation projects, including Sustainability
Transformation. If an organization is seeking to make majorchanges to the way employees think and behave, it has toback it up with something concrete from the very top of
the organization.
The Change Makers understand this. They are almost twice
as likely as the Followers to have an organization-wide
sustainability strategy set by the CEO and senior leaders –23% of the Change Makers have this, compared with just 13%of the Followers. But that 23% shows that even the Change
Makers have more work to do here.
“The first step to Sustainability Transformation is embedding
it within the culture,” explains Eloise Cotton, UK and Ireland
Sustainability Lead at Schneider Electric. “It needs to sit rightat the top with those decision-makers. Once you’ve done
that, the strategy comes. One of the mantras we have at
Schneider Electric is that first we set a strategy or a target,then we commit to it, measure it based on real science andtransparency, then continue to act and improve upon it. Thenyou repeat. It is a cyclical process.”“The first step to Sustainability
Transformation is embedding it within
the culture. It needs to sit right at the top
with those decision-makers.”
Eloise Cotton
UK and Ireland Sustainability Lead
Schneider Electric

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2.

They measure successSustainability Transformation is a huge challenge fororganizations. So it’s essential that they break the challenge
down into smaller parts and set a range of KPIs to measureagainst. And because Sustainability Transformation is so
broad – it covers the environment, economic growth, andwellbeing – they need to put discrete goals in place.

“Humans are oriented toward targets:they're essential to steering success."
Melanie Kubin-Hardewig
Vice President, Group Corporate Responsibility
Deutsche Telekom
Thirty-nine percent of the Change Makers have financial KPIs
in place to drive sustainability (e.g. investment levels, revenue
targets), compared with just 25% of the Followers.
“Humans are oriented toward targets,” says Deutsche
Telekom’s Melanie Kubin-Hardewig. “They’re essential tosteering success, and it helps culturally to move people in theright direction. It also creates transparency on where you arecompared with where you started.”
Deutsche Telekom has gone a step further than most by tying
sustainability targets to employees’ remuneration packages.
All employees who have a portion of their salary that isvariable – which accounts for the majority of the workforce –are covered by the scheme.
“It speeds up the process of getting people involved anddrives our target achievement,” says Kubin-Hardewig.

39%

Closing the sustainability gapof the Change Makers havefinancial KPIs in place todrive sustainability

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3.

They are innovative

Digital transformation helped organizations to create aninnovative culture by driving agile methodologies, “fail-fast”
mentalities and an appreciation of the business outcomesthat technology can encourage. But innovation is even more
central to Sustainability Transformation.
The Change Makers are significantly more likely than the
Followers to understand this: 38% of them believe that digital
innovation is at the very core of their organization, and thatthey’ve always been an early adopter of digital tech and IT,
compared with just 3% of the Followers.

4.

They are investing in technology

Digital innovation is the foundation of Sustainability
Transformation, and technologies are the building blocks.
The Change Makers know this, and their investments in techoutpace those of the Followers.
For example, 63% of these organizations expect to increase
their investment in network technologies in the next two
years, compared with just 38% of the Followers. It’s a similarstory with AI (73% vs 46%) and data and security (71% vs 48%).

63%of the Change Makers expect toincrease their investment in network
technologies in the next two years

Digital technologies play a major role in keeping Kotipizza
running smoothly, according to Anna Rahikainen. She saysthat technology helps with food safety by monitoring andoptimizing the performance of refrigerators and freezers,
measuring emissions through the supply chain, and helping
the chain keep on top of its many franchised operations. “It’sall being digitized,” Rahikainen explains. “E-commerce is also
our key sales driver.”

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5.

They are skilled

To happen, Sustainability Transformation needs people withthe right skills. Some 39% of the Followers believe they havegreat ideas to become more sustainable, but admit they don’t
actually have the skills to make it happen. Only 16% of the
Change Makers say that this is the case.
HSBC is tackling this challenge by creating a Center of
Excellence for Corporate Sustainability. The initiative brings
together people from across the organization with a rangeof skills to share knowledge and tackle common goals.
Outside expertise is also brought in to complement the bank’s
existing skills.
“We need to bring people together,” says Seb Henbest,Group Head of Climate Transition at HSBC. “And get themup to speed on the new world we’re trying to engineer andfinance together.”Closing the sustainability gap

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Securing a successful
and straightforward
Sustainability
Transformation
Sustainability Transformation is hard.
Organizations think they’re doing agreat job, but in reality they’re only
scratching the surface. More needs tobe done to make their goals a reality.

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A small group of organizations get this and are rising above the rest.
We call them the Change Makers. What makes them dif ferent?
They’re focusing on technology and sustainability at the same time.
One without the other does not create results.
And the Change Makers are reaping rewards. They find Sustainability
Transformation easier than most, they’re more profitable and theirbrands are booming.

How have they done it?
1.

They’re communicative

2.

They measure success3.

They're innovative

4.

They invest in technology

5.

They’re skilled

The Change Makers are on the right track, but there’s more to do.
All organizations, regardless of where they are on their Sustainability
Transformation journeys, need to embody these characteristics
in order to thrive. As with digital transformation before, only thestrongest will survive. And this time, it’s not just organizations that
could suf fer – it’s the environment, economies and people’s wellbeingat stake too.

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