Indonesian companies are increasingly investing in sustainable practices, not just as a moral or environmental decision but as a cornerstone for enhancing profitability and competitiveness. SAP Insights reveals this growing trend, highlighting how Indonesian organizations are integrating sustainability into their core business strategies.
Gina McNamara, Regional Chief Financial Officer at SAP Asia Pacific and Japan (SAP APJ), emphasizes the growing recognition among businesses that sustainability and financial performance are closely interconnected. Indonesian businesses, in particular, are becoming acutely aware of this link. A recent study by SAP shows an overwhelming majority of Indonesian companies acknowledging a moderate to strong relationship between their sustainability efforts and organizational profitability (90%) and competitiveness (91%). These figures notably surpass the average across Asia Pacific and Japan, indicating a unique and forward-thinking approach by Indonesian enterprises.
Investing in Sustainability: A Strategic Move for Indonesian Businesses
Reflecting on this paradigm shift, the investment trends in Indonesia are telling. With 66% of businesses planning to increase their sustainability investments in the next three years, it’s evident that Indonesian organizations are not just paying lip service to sustainability; they are actively redirecting resources to foster sustainable practices. This trend is not just a response to environmental concerns but a strategic move to strengthen their market position and financial performance.
The SAP study, encompassing responses from 250 Indonesian professionals well-versed in their organization’s sustainability objectives, sheds light on how sustainability strategies are directly contributing to business growth. An impressive 93% of businesses reported a positive impact on revenue or profit growth due to sustainability strategies, while 92% observed enhanced efficiency in business processes. These figures underscore the tangible benefits that sustainability brings to the table, transcending the traditional view of it being a cost center.
SAP Insights Study Reveals Challenges to Environmental Strategy Implementation
Despite the optimistic outlook, challenges persist. The most significant barrier for Indonesian companies is the development of a comprehensive environmental impact strategy, a hurdle for 42% of businesses. This concern surpasses the global average, highlighting the unique challenges faced by Indonesian organizations. Other issues include the after-effects of the COVID-19 pandemic, doubts about measuring environmental impact, and aligning potential actions with organizational strategy.
The key to overcoming these challenges lies in effectively utilizing sustainability data. Indonesian businesses are increasingly satisfied with the quality of their sustainability data, with satisfaction rates rising to 40%, a 10-point increase from the previous year. This data, however, needs to be accurate, granular, and integrated with financial data to inform sound business decisions.
Indonesian businesses are not just focusing internally but are also demanding sustainability data from their suppliers and partners. This holistic approach is critical in creating a sustainable ecosystem, driving not only individual company growth but also contributing to broader environmental and societal goals.
The Role of Technology Partners in Driving Sustainable Growth
Gina McNamara concludes by highlighting the importance of technology partners like SAP in this journey towards sustainability. By providing tools and insights to accurately measure and act on sustainability data, technology partners are indispensable in helping businesses navigate the complexities of sustainable practices. This collaboration is essential for Indonesian companies to fully realize the potential of sustainability in driving competitiveness, profit, and revenue.
The SAP Insights report illuminates a crucial trend in the Indonesian business sector: sustainability is now a pivotal element in shaping business strategies, driving growth, and enhancing competitiveness. As companies continue to navigate this landscape, the role of accurate data and strategic partnerships becomes increasingly vital in ensuring that sustainability is not just a goal but a fundamental driver of business success.
