Few things are representing the zeitgeist of our age more than sustainability and digital, so it’s perhaps no great surprise that a new report from Accenture reveals that both are central to the competitiveness of European firms in the years ahead.

The report also suggests that European leaders believe that their firms will return to pre-pandemic profit levels in around 18 months.  The best performance, however, seems to be among firms that are leading in both digital transformation and sustainability. Firms who are able to master both were found to be around three times as likely to be viewed as among “tomorrow’s leaders”, and therefore not only recover faster from the pandemic but emerge stronger from it.

“Digital transformation defined the business landscape in the 2010s, and companies that led this transformation at speed and scale won the day,” the authors say. “We are entering a decade that ushers in a new wave of business change defined by the sustainability transition. How European companies manage this ‘twin transformation’ will determine how quickly they will recover from the crisis and how well they will be positioned to sustain growth in the post-pandemic world.”

Shifting priorities

The data suggests that around half of European businesses are prioritizing investments in both sustainability and digital transformation.  In terms of technology, this manifests itself primarily in investments in areas such as artificial intelligence and cloud computing, with most sustainability transformation focused on business model innovations.

“Even companies that recognize the business opportunity to accelerate their digital and sustainable transitions face barriers at different stages of this twin transformation journey,” the authors say. “Those challenges include defining a viable business model around sustainable practices and products, freeing up resources to better mobilize the organization, and moving rapidly from pilot and siloed projects to large-scale and enterprise-wide initiatives.”

The report concludes with a few tips to help organizations take this twin-pronged approach:

• Fostering ecosystem-based business models driven by sustainability and enabled by technology: Twin transformation leaders already generate more than 10% of their revenues this way.
• Combining resources to scale technology applications to sustainable practices: Twin transformation leaders invest more in innovation across the board, allocating more than 10% of their annual revenue to research and development. They also recognize that sustainability and technology are not separate priorities.
• Leading, empowering, and nurturing talent: Twin transformation leaders take responsibility for the continued employability of their people. They spare no effort in reskilling/upskilling their workforce, understanding that building and nurturing talent is essential to turning transformation into tangible business value.