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Only 4% of organisations have a holistic sustainability strategy and are focusing on addressing last-mile challenges

October 13, 2022 – Kyndryl (NYSE:KD), the world’s largest IT infrastructure services provider, today announced the new findings of the recently launched Kyndryl ASEAN Digital Transformation Study 2022, in collaboration with technology research and advisory firm Ecosystm. The study aims to outline the key business priorities and technology trends in ASEAN enterprises, including their sustainability goals.

Five hundred C-suite leaders participated in the study across ASEAN, and the findings revealed that Environmental, Social and Governance (ESG) awareness is growing exponentially in the region with some industries leading the way. Despite the greater focus on sustainability, organizations are still lacking a holistic strategy and are grappling with how to integrate their data to set science-based targets, all while navigating external challenges such as stricter regulations. The results indicate that while organizations in ASEAN are aware about their responsibility to balance sustainability and profitability, there are still challenges that hinder them to set and achieve their sustainability goals.

Several key insights from the study that highlight the state of sustainable organizations in ASEAN include:

1)    Sustainability is an Integral Part of Business Priorities

According to the study, 77% of organizations in ASEAN are focusing on becoming sustainable organizations. They are being driven to develop and demonstrate an ESG consciousness in their actions and investment, by their customers, investors and by governments’ sustainability mandates. However, many organizations pursue sustainability goals without a strategy backing them up – only 23% of organizations in ASEAN have a corporate sustainability strategy.

2)    Organizations Often Lack a Holistic Sustainability Strategy

While the majority of organizations are focusing on budget allocation for sustainability initiatives, they have not gone beyond that to identify the right skills and data required to support the initiatives. Only 4% of organizations across ASEAN have a holistic strategy and are focusing on external and last-mile challenges such as negotiating ambiguous reporting frameworks.

3)    Customers and Investors Drive Sustainability Efforts

Responding to customer expectations has become a norm for every successful business today – and this extends to environmental and social consciousness. In fact, customers are driving environmental and social responsibility in organizations; in most cases more than regulations are. This is especially true in Philippines, Indonesia and Thailand.

4)    Data is a Leading Challenge for Sustainability Initiatives

The study finds that the leading barriers to sustainability projects in ASEAN are: 60% operational costs, 55% data availability and 50% lack of dedicated resources. This confirms that organizations’ sustainability initiatives are still at preliminary stage. In today’s data-driven world, it is very likely that organizations have access to the data needed for their sustainability efforts. But it is often not integrated within their overall data strategy that helps identify the right data sets, collect the necessary data across all operations, and has embedded analytics for the right insights.

5)    The Media & Telecom Industry is Ahead of the Curve

While sustainability initiatives are yet to mature, some industries are leading the way in their strategies, and especially in their initiatives.  Media & Telecom and Energy & Utilities for example, are among the most mature industries given the incentives to adopt sustainable practices are cost-related and for future survival. Other industries that have initiated smaller eco-friendly measures have also found some early success and this includes the Retail industry where there has been focus on reducing the use of plastic in packaging and procuring locally to reduce carbon footprints. 

“In today’s evolved economies, an organization’s relevance and success will be measured both in terms of financial and climate aspects. This has spurred organisations to appoint Chief Sustainability Officers and highlighted the growing importance of sustainability skillsets for tomorrow’s workforce. This research highlights how the lack of data consistently hinders an organization’s sustainability planning,” said Ullrich Loeffler, CEO, Ecosystm. “While sustainability is an integral part of many businesses in ASEAN, there is a lot more that needs to be done to build sustainability competencies and fully understand what data organizations have access to and identify the data gaps to support corporate sustainability goals.”

“As ASEAN is predicted to become the fourth largest economy in the world by 2030, there is a now a huge responsibility for businesses in the region to balance the long-term imperative of a net-zero future with the short-term need to safeguard the bottom line,” said Susan Follis, Managing Director, Kyndryl ASEAN. “I strongly believe that the success of sustainability lies in how well an organization can integrate its people, processes and technology to achieve a common goal. To achieve this goal, we need to put people at the centre and embed sustainability principles at all levels of the organization culture.”

At Kyndryl, ESG strategy is at the heart of the organization’s mission to become a purpose-driven company. Kyndryl’s strategic focus is to continue to grow its Cloud business, to enable an estimated 22-39% increase in energy efficiency. The company will also continue the expansion of renewable energy across its portfolio, growing it to 75% within the next few years for all of its data centres.

About Kyndryl 
Kyndryl (NYSE: KD) is the world’s largest IT infrastructure services provider serving thousands of enterprise customers in more than 60 countries. The company designs, builds, manages and modernizes the complex, mission-critical information systems that the world depends on every day. For more information, visit www.kyndryl.com.

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