SAP survey shows KSA companies are at forefront in recognizing business benefits of sustainability strategies

As the Middle East hosts the UN Climate Change COP event for the second year in a row, a new survey from global technology company SAP SE has highlighted the success of the Kingdom of Saudi Arabia’s deep commitment to sustainability.

Investment in environmental strategies has increased significantly over the past five years, with the vast majority of businesses now tracking their impact on the planet while also planning similar future investment. As a result, 98.7% of the surveyed companies said that measurement and reporting on environmental issues inform their strategic and operational decision-making, with 58.9% saying that this occurs to a strong degree.

The result correlates with the finding that Saudi companies recognize the business benefits of sustainability strategies more strongly than their global counterparts in the SAP survey of 4,750 respondents across 21 nations and 29 industries. According to the survey, almost half (49.7%) of KSA respondents recognized a strong positive relationship between profitability and environmental sustainability, while for the other countries surveyed, only less than a third (30.1%) did. Similarly, an identical proportion of KSA respondents recognized a strong positive link between competitiveness and environmental sustainability, whereas the figure was only 35% in the rest of the world.

Considering specific business benefits, the majority of respondents (89.4%) believe that, to a moderate or strong degree, their environmental strategies are increasing the efficiency of their business processes, while 82.1% of respondents say their environmental strategies contribute positively to business outcomes such as revenue, profitability and growth. An impressive 94.7% believe environmental strategies reduce the overall costs of the business to at least some extent.

Environmental data collection in the Kingdom has grown in recent years, with the SAP survey finding most Saudi companies started this process within the past five years. Of these, 30.5% say they have been collecting data for a period from two years to fewer than five years, and a further 18.5% have been collecting data for less than two years, and 4% for less than one year. Interestingly, 4.6% of companies report collecting environmental data for 20 years or longer.

The survey, which included senior executives from a cross-section of KSA industries of different sizes, found most were planning an increase in investment in sustainability strategies over the coming three years. While almost three quarters (72.2%) of companies plan to increase this investment, 21.2% plan to maintain current investment levels, and an additional 3.3% plan to start investing in environmental issues. Only 2.6% had plans to decrease their existing investment, while 0.7% said they had no investment plans. Respondents appeared optimistic about reaping rapid benefits from these investments. When estimating the time period over which they expected to see a positive financial return, 27.41% said one to less than three years, 41.1% said from 3 to less than 5 years, and a further 24% said from 5 to less than 10 years.

Announcing the survey results, Ahmed AlFaifi, Senior Vice President of SAP Middle East and Africa – North, said, “The findings demonstrate that companies in the Kingdom are aligned with Saudi Vision 2030 and the Saudi Green Initiative and its ambition to reach net zero emissions by 2060. It is encouraging that so many of the Kingdom’s senior executives recognize that these strategies are beneficial not only for the planet, but for their businesses too, increasing profitability and competitiveness. The impressive strides already made in tracking the environmental impact of companies’ operations through technology will be further bolstered by plans to invest significantly in sustainability strategies over the coming three-year period.”

Focus areas and challenges

AlFaifi says the SAP survey has also uncovered key pain points in implementing and measuring sustainability strategies, most of which can be addressed by deploying SAP solutions as the company continues to enhance its offerings by embedding sustainability metrics and AI capabilities across its portfolio. He adds that SAP believes it is in a unique position to help KSA and other countries to achieve their sustainability goals. “SAP customers generate 87% of the world’s global commerce. We can help 87% of the world’s global commerce producers use technology to organize their supply chains, transportation, and financial data in a way that actually enables a circular economy and net-zero emissions,” he explains.

In particular, the survey, which included both SAP and non-SAP customers, highlighted the need for deploying better data collection methods as only 43.7% of respondents are completely satisfied with the quality of the data collected. It should be noted, however, that number of KSA respondents who are completely satisfied is considerably higher than the 22.6% of respondents in the other countries surveyed. The aspects that respondents were most satisfied with were the frequency of data collection and the availability of tool or software to analyse the data, with 37.1% and 36.4% respectively completely satisfied on both counts. The lowest rate of satisfaction was related to the accessibility of data, with 27.8% describing themselves as completely satisfied.

The results announced today are part of a study conducted by SAP Insights earlier in 2023 via an online survey, and respondents had the highest knowledge of their organization’s sustainability objectives and processes​.