Thought Leadership

Sustainability in action: Why companies are prioritizing a greener future

By Victoria Carlos and Conor Peick

The deadlines for many climate action goals are fast approaching. 2030 and 2040 no longer seem as far away as they once did, and companies are feeling the pressure of making good on commitments to improve their environmental stewardship.

Many companies have started to adopt net-zero-type goals for carbon and carbon-equivalent emissions to reduce their environmental impact. This surge in eco-conscious business practices demonstrates a growing emphasis on sustainability in many industries, increasing the need for sound strategies to reduce our environmental impact. While developing a sustainability strategy may seem like a monumental and costly task for some companies, a deeper dive into the reasons that are driving this newfound emphasis shows that companies who invest in sustainable operations and collective intelligence are investing in their own long-term success.

The case for sustainability

Sustainability is no longer just a talking point for companies. Organizations are actively developing sustainable designs and implementing environmentally conscious practices into their everyday operations. But what’s really driving this recent trend towards eco-friendly initiatives? Here’s a closer look at some of the top reasons (and incentives) propelling companies to embrace the green movement.

  1. Government regulations: Government agencies worldwide are developing legislation and regulations that require companies to provide transparency into their current conservation practices and how they plan to fulfill future sustainability obligations. For example, the Corporate Sustainability Reporting Directive (CSRD) is responsible for driving sustainable development across the EU. Companies looking to continue conducting business in the EU or looking to do business in the future will need to meet certain reporting guidelines on their environmental impacts. These new parameters are making climate-conscious plans a recurring hot topic in boardrooms as leaders strive to ensure their businesses maintain compliance.
  2. Financial incentives: Governments are also incentivizing companies to take a greener approach. For example, in the US the Inflation Reduction Act (IRA) is tackling clean energy by incentivizing companies to decarbonize and instead adopt renewable energy solutions. This symbiotic arrangement yields a win for all: governments, companies, and the environment.
  3. Increasing social awareness: Times have changed. Customers, suppliers, investors, and shareholders have a much deeper understanding of environmental issues now than in the past. Consumers are willing to pay a premium for products if they know they’re sustainably produced, and investors want to be associated with companies that prioritize and actively engage in green operations. This is compelling companies to quickly adapt to the current climate by investing in greener strategies that resonate with their client base. Ultimately, the only thing costlier than adopting a sustainability strategy is not having one at all.

The challenges of going green

While the case for sustainability is certainly compelling, the path to achieving it comes with a few challenges. Here’s what companies need to be aware of when creating sustainable designs and formulating greener business strategies:

  1. Government regulations: While government regulations are a major reason for companies going green, they can also present significant challenges.The details of new legislation and regulations are constantly evolving and keeping up can seem unachievable. However, by making sustainability a core target from the start, companies can more easily manage the development of environmentally friendly products.
  2. Lifecycle and supply-chain considerations: Completely understanding the lifecycle of a product is crucial when it comes to building greener products. To achieve this, companies need to practice collaboration. From designing to manufacturing to supply chain to consumers, companies must learn to communicate with teams in ways they haven’t before. By doing so, they can generate collective intelligence to understand the total impact of an existing product or process, or to develop the sustainability requirements for a new one.
  3. Data, data, and more data: Sorting through a myriad of data to make informed decisions is no small task. Engineers, planners, and business managers will need to find ways of leveraging these immense volumes of data to drive sustainable decisions.

Shifting the mindset

It’s clear that sustainability is quickly becoming a principal value across all industries. Companies investing in the development of eco-friendly products and strategies are benefiting from consumer trust, gaining financial incentives, and the ability to create a profound social impact. However, achieving greener operations goes beyond tacking sustainability onto existing products. Instead, companies must undergo a fundamental shift in perspective by integrating sustainability into the very core of the product and production lifecycle, rather than treating it as an afterthought.

The good news is that companies can adopt a greener mindset with collective intelligence. Through data sharing, teamwork, communication, and collaboration between engineers, product managers, and logistics providers, companies can recognize sustainable opportunities throughout their organizations. This collaborative approach results in a harmonious workflow that culminates in a comprehensive sustainability strategy, empowering companies to achieve lasting success in an increasingly eco-conscious environment.

To hear more about how companies are working to become greener for the future, check out our new podcast Sustainability is Driving All Industries. In part 2, we will examine how digitalization can help companies to build collective intelligence and transform their processes to become leaders in the future of sustainable industries.

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This article first appeared on the Siemens Digital Industries Software blog at