Pocketing the value
Right now, too many companies are leaving value on the table by failing to leverage sustainability innovations to shift their cost curves (for example, through circular economy innovation) and to use zero-based approaches to accelerate the achievement of their sustainability goals. All expenditure creates an impact—both on the environment and through employment in the supply chain. That’s why the next generation of zero-based programs goes further, to identify synergies between cost efficiency initiatives and sustainability and trust outcomes.
Sustainability-enhanced ZBx programs provide new data-driven insights and strategic choices by incorporating two key elements:
Sustainability-enabled ZBx analytics
Every dollar spent, whether in SG&A or in COGS, has an associated impact—positive or negative—on the environment and on society. By combining granular financial data with detailed sustainability industry sector benchmarks, companies gain new cost and sustainability visibility. Future opportunities can be prioritized across multiple dimensions, considering direct cost savings and sustainability impacts (for example, on the carbon and water footprint or supply chain employment). This holistic view enables companies to prioritize initiatives that significantly reduce exposure to environmental risks (e.g., by reducing consumption of high-impact categories like travel, energy or raw materials) or to select approaches that support employment (e.g., through the choice of sourcing location).
Sustainability-led savings opportunities
The circular economy and rapid technology innovation create new avenues to achieving quartile-zero cost performance.6 A report by Accenture Strategy in collaboration with the World Economic Forum identifies 19 Fourth Industrial Revolution solutions such as artificial intelligence, internet of materials, machine vision, and robotics that can accelerate the transition to a circular economy, minimize waste, and drive cost-efficiency. Sustainability-enhanced ZBx leverages these innovations to find ways to dramatically shift cost curves and, in some cases, surpass benchmarks.
A number of leading companies have recognized the value of considering sustainability and trust along with growth and profitability—and have realized or are anticipating significant benefits as a result. Here are just a couple of examples:
- Unilever reported savings of €2 billion in 2017 and that it has derived €490 million in savings from energy and environmental efficiency alone since 2008.7 At the same time, 70 percent of Unilever’s growth in 2017 came from sustainable living brands.8
- Anheuser-Busch InBev made headlines with an announcement that by 2025, all its purchased electricity will come from renewable sources, which is expected to cut the beverage giant’s operational carbon footprint by 30 percent.9
It’s clear: When companies use renewable energy sources to power their factories, or slash the use of non-renewable plastics, or find innovative new ways to reduce waste, they’re taking advantage of alternatives that are good not only for growth and profits, but also for society and the environment. That’s a win for the “triple bottom line.”
Driving sustainable, profitable growth
Companies that successfully link their profitability and sustainability imperatives become leaner and more reputable in the eyes of stakeholders and shareholders. And they drive savings that are better received internally, last longer and help them more quickly achieve their sustainability goals. Importantly, a sustainability-enhanced ZBx approach also helps strengthen workforce alignment around a company’s core purpose and provides extra incentive to a company’s employees to capture the savings. This is particularly valuable given that companies see cultural buy-in (67 percent) and change management (41 percent) as the two hardest obstacles to overcome on ZBx projects. 10
Ultimately, adding a sustainability lens to ZBx provides both the fuel for future investment and helps companies foster trust and secure their licenses to grow.
1 Accenture Strategy research, “Beyond the ZBB Buzz,” 2018
3 Accenture Strategy research, “To Affinity and Beyond: From Me to We, the Rise of the Purpose-led Brand,” 2018
4 Accenture Strategy research, “The Bottom Line on Trust,” 2018
6 World Economic Forum and Accenture Strategy research, “Harnessing the Fourth Industrial Revolution for the Circular Economy: Consumer Electronics and Plastics Packaging,” 2019
7 Unilever, “Making Sustainable Living Commonplace,” Annual Report and Accounts, 2017
8 Unilever, accessed March 5, 2019
9 “Beer Giant Anheuser-Busch InBev Commits to 100 Percent Renewable Energy,” Anmar Frangoul, CNBC, March 29, 2017
10 Accenture Strategy research, “Beyond the ZBB Buzz,” 2018