Sustainability In The Post Pandemic World And How GCCs Are Driving it?

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The pandemic changed the world in the most unexpected ways and has been one of the most widely reaching crisis. It disrupted normal life and businesses. The disruption in human life resulted in positive transformation and healing for mother earth as air and water purified and the non-human population rejoiced their habitats.

Post pandemic, world citizens and corporate’s have a greater realization of how individual actions and business objectives impact the planet. Sustainability has become a strategic agenda for enterprises as there has never been a more pressing time in the last century, where businesses are witnessing a push from the consumers to scale and report their sustainability game.

Traditionally, environment, social and governance (ESG) have been the low hanging fruit of sustainability. Large enterprises have been reporting their ESG initiatives more from a compliance and reputation perspective.

This is undergoing a drastic change. The definition of sustainability has broadened now to include business models, technology transformation, work arrangements, human capital development, and culture. It is a key component of the “Virtual Enterprise” – The “Cognitive Enterprise in a virtual world”.

In the consumer products and retail space, consumers are demanding more sustainable products and services, and willing to pay more for what they consider to be more aligned to their idea of sustainability. A recent IBM Institute of Business Value (IBV) study reveals that, 55% consumers take into account a sustainable and environment friendly brand into consideration, while choosing what they purchase.

Furthering the sustainability agenda through Global Capability Centers

An integral part of several large organizations today is the Global Capability Center or GCC. GCCs have matured to provide beyond cost benefits as they are also playing a critical role in driving the sustainability agendas of parent organizations. They are aligned to the parent vision and strategy. 

From GCCs perspective, sustainability can have the following key dimensions

1. Innovation and technological transformation – GCCs are playing a pivotal role in driving the enterprise strategy and Digital transformation. They are aligned to and are an integral part of the overall organization objectives. Be it optimized and intelligent business processes or IT for the best customer or employee experience, GCCs house the necessary capabilities. As organizations becomes more conscious of producing more sustainable products and services, through sustainable supply chains, they are looking at GCCs (and ecosystem) to innovate and fulfil these objectives. 59% of the new corporate investments in Indian startups across sectors in 2019 were made by global MNCs, via their GCC counterparts, totaling $ 1.5 billion.
2. Productivity and continuity – GCCs responded to the pandemic with agility and resilience. There were initial challenges as the management and workforce dealt with remote working environment and necessary infrastructure, GCCs ensured they maintained business continuity and service excellence. The concept of “self-driven” teams, empowered by new collaboration and productivity tools, became crucial and popular. As organizations strategize to “return to workplace”, they are creating a long-term sustainable work model, which is productive and cost efficient.
3. Human Capital Development – With remote working arrangements to stay, and organizations re-visiting their work operating models between office and home, virtual talent management is imperative. This includes online learning, along with analytics driven tools to forecast skill demands. GCCs, like other organizations, face a talent crunch for digital skills. However, to sustain the growth momentum and continue their journeys to deliver innovation, GCCs must think ahead in terms of talent and skill development.
4. Environment and Social – This dimension remains key to meet the sustainability objectives as organizations continue to address climate change and environmental issues. Besides accelerating sustainable ESG initiatives, more and more organizations are measuring sustainability through well-defined metrics. Currently, less than 1/3^rd of CPG and Retail companies have defined metrics to measure sustainable progress. Consumers are increasingly researching before choosing a brand, looking for sustainability metrics to decide, and willing to pay a premium for products or services which match their idea of sustainability. Tracking and reporting these metrics helps build a trusted brand in the long term.

A good example of this is Mercedes Benz Research and Development Institute of India (MBRDI). It is aligned to Mercedes’ ideas of “Social Mobility” and the United Nations – Sustainable Development Goals.  MBRDI is involved in design and development of the Mercedes subsystems (chassis, powertrain, etc) along with telematics, advanced driver assistance and other innovations for Mercedes’ latest range including the EQ models.

Walmart Global Technology (previously Walmart Labs) is leading AI, Blockchain and IoT initiatives for the group globally. Walmart manages 7 million IoT data points across US to monitor food quality and temperature. Every day, this network of connected devices sends almost 1.5 billion messages regarding temperature, operating functions and energy use. To help manage this massive volume, the IoT team within Walmart Global Tech has built proprietary software that uses advanced algorithms to detect anomalous events in real-time and take action to fix issues quickly.

With a solution called “demand response,” Walmart can reduce energy consumption to any of its U.S. stores for a set amount of time and then have systems in place to automatically return the equipment to the usual operating standards. Lowering energy use in stores that are idled or darkened allows Walmart to reduce energy consumption and lower its utility costs without impacting the customer experience. Another benefit of this application of IoT is the sustainability implications, where in partnership with local communities, it can lower its use of the energy grid in response to high demand needs like blackouts and brownouts.

There are many such instances where the GCCs are closely integrated into the parent’s sustainability agenda and are a vehicle for driving its transformation goals.