Sustainability as Strategy in Service Organizations

Many service organizations have recently realized that the EU’s new Corporate Sustainability Reporting Directive (CSRD) [1], along with other emerging sustainability regulations, also applies to them.

In public discourse, the focus around sustainability is often on compliance, meeting the minimum legal obligations. What often receives less attention is how addressing sustainability issues can actually benefit the organization itself, from improving operations to strengthening competitiveness and customer trust.

One critical aspect of sustainability is addressing climate impact. While many organizations focus on direct emissions (Scope 1 and 2), such as energy consumption and fuel use, the majority of emissions often arise from indirect sources, including supply chains, investments and product life cycles (Scope 3).

For instance, Apple reported that 98 percent of its total emissions in 2023 were classified as Scope 3 [2]. Interestingly, even with that figure, Apple's total Scope 3 emissions remained lower than those of many comparable tech companies. Companies like Samsung and others report even greater proportions of Scope 3 emissions, which highlights the widespread challenge of managing indirect environmental impacts [3].

Apple reported that 98 % of its total emissions in 2023 were classified as Scope 3.

This shows that the most significant challenges and opportunities in corporate sustainability are often not found within internal operations, but rather in supply chain management and the optimization of product and service lifecycles.

In this post, I explore why sustainability should not be treated merely as a mandatory requirement, but rather as a strategic whole that supports long-term value creation.

Moving from compliance to strategy

To make sustainability truly impactful, companies must shift from merely meeting regulatory requirements to embracing sustainability as a strategic priority. This means going beyond surface-level initiatives and embedding sustainability at the heart of business strategy. A strategic approach ensures that companies are not only responding to external pressures but actively shaping a more sustainable and resilient future.

Some key actions that support this transition include:

✅ Defining a clear sustainability roadmap and strategy
A clear sustainability roadmap and a well-defined corporate sustainability strategy help organizations set concrete goals, identify necessary development actions, and establish measurable indicators. This enables sustainability to be fully integrated into both the strategic and operational levels of the organization.

✅ Adopting a comprehensive approach to sustainability leadership
Sustainability should be integrated into core decision-making rather than treated as a separate initiative. Leadership plays a critical role in fostering a culture where sustainability is embedded in every aspect of the business.

✅ Collaboration with suppliers and partners
A significant share of emissions comes from upstream supply chains. Engaging suppliers and setting clear, measurable sustainability goals can help reduce Scope 3 emissions and build a more resilient value chain.

✅ Promoting cross-departmental cooperation
Sustainability is not the sole responsibility of a corporate social responsibility (CSR) team. Collaboration across departments, including procurement, operations, IT, finance, and product development, ensures a holistic and effective approach.

✅ Leveraging AI-driven end-to-end measurement and monitoring Advanced analytics and artificial intelligence can enhance emissions tracking and performance monitoring. These tools help organizations identify trends, optimize resource use, and forecast sustainability outcomes more accurately.

✅ Strengthening collaboration between IT and business units
Data plays a critical role in sustainability efforts. Closer integration between IT and business teams enables more efficient emissions tracking, improves data-driven decision-making, and supports the development of sustainable digital services.

✅ Embedding sustainability into continuous improvement practices
Instead of relying on isolated initiatives, companies should integrate sustainability into ongoing product and service development processes. This shift supports long-term impact and continuous progress toward environmental and social goals.

Measuring emissions from services

Another crucial perspective is the measurement of emissions generated by services. While product emissions are often closely monitored, service-related emissions require more attention. Can we assess the entire lifecycle emissions of a service in the same way we do for products? How can we identify the most significant emission sources and refine our operations to minimize them?

These questions are essential in transitioning from reactive to proactive and effective sustainability. Measuring service emissions helps organizations pinpoint where they can make the most significant impact and develop innovative strategies to lower their carbon footprint. A good starting point is to analyze the organization’s service value streams to see how sustainability goals are embedded and where improvements can be made.

The role of emerging technologies

Emerging technologies, such as AI-powered emissions tracking and lifecycle assessment tools, are enabling more accurate and comprehensive evaluations of environmental impact across both products and services. Companies can leverage these solutions to improve transparency, enhance accountability and optimize emissions for existing operations as well as future offerings.

The circular economy is another essential component of forward-looking sustainability. By rethinking how products and services are designed, delivered, used and reused, organizations can significantly reduce waste and resource consumption. Embracing circular business models not only supports global sustainability goals but also opens new opportunities for innovation and growth.

Emerging technologies such as digital product passports, IoT-enabled tracking and AI-driven material analysis play a key role in enabling circular approaches. They improve traceability, optimize reuse processes and support smarter resource management.

Localizing production for greater impact

In addition to leveraging technology, companies should also consider how localization strategies can contribute to sustainability. Producing goods and services closer to end users helps minimize transportation emissions, increase supply chain resilience and reduce reliance on complex global logistics networks.

Strategic decisions such as decentralized production and localized maintenance services can lower carbon footprints while enhancing operational efficiency and customer satisfaction. Local solutions can also strengthen regional economies, create jobs and support the development of more sustainable business models. In addition, reducing dependency on global supply chains improves a company's ability to respond to geopolitical uncertainty.

Conclusion

Sustainability is no longer a nice-to-have. It is a strategic necessity for modern organizations. By moving beyond compliance and adopting a strategic approach, companies can create long-term value, reduce environmental impact and build more resilient and adaptive business models.

Addressing sustainability holistically means looking beyond products to include services, operations and supply chains. It involves rethinking how value is created and delivered, from localizing production and enabling circular models to leveraging emerging technologies for better measurement and decision-making.

With the right combination of leadership, technology and collaboration, organizations can proactively meet sustainability challenges while unlocking new opportunities for innovation and growth. The future of corporate responsibility lies in integrating sustainability into every decision, tracking its impact across the full value chain and continuously evolving in response to a changing world.

References

[1] European Comission (2025).
[2] Apple (2024). Apple Environmental Progress Report.
[3] Statista (2025). Greenhouse Gas Emissions Scope 3 of Top Tech Companies Worldwide.