Sustainability Becoming Critical for Companies Globally
In a UN Global Compact survey, an overwhelming majority of corporate CEOs – 93% – say that sustainability will be critical to the future success of their companies and they believe that, within a decade, a tipping point could be reached that fully meshes sustainability with core business. A good enough reason to plan to attend the National Sustainability Conference in Singapore 29/30 July. We’ll be there!
NEW YORK; June 22, 2010 – In spite of the recent economic downturn, an overwhelming majority of corporate CEOs – 93 percent – say that sustainability will be critical to the future success of their companies. Furthermore, CEOs believe that, within a decade, a tipping point could be reached that fully meshes sustainability with core business – its capabilities, processes and systems, and throughout global supply chains and subsidiaries.
These are among the key findings of a survey of 766 CEOs around the globe – the largest such research study of top executives ever conducted on the topic of sustainability – released today by the United Nations Global Compact and Accenture. In addition to an online survey, the study included extensive interviews with 50 of the world’s leading CEOs.
According to the survey, “A New Era of Sustainability: UN Global Compact-Accenture CEO Study 2010”, the global economic downturn did little to dampen corporate commitment to sustainability. In fact it seems to have done the opposite: 80 percent of the CEOs say the downturn has raised the importance of sustainability. As businesses address the challenges of the financial crisis, sustainability is being recognized as a source of cost efficiencies and revenue growth. Additionally, many companies view sustainability as a critical element in driving growth in new markets as they look toward economic recovery.
The survey results indicate that businesses are taking sustainability more seriously. In a similar survey conducted in 2007, 50 percent of the CEO respondents said that sustainability issues had become part of their company’s strategy and operations. In the 2010 survey, that number jumped to 81 percent.
While recognizing the scale and complexity of global challenges, many CEOs say there has been progress over the past three years in making the transition from developing a sustainability strategy to execution.
CEOs cited several barriers to achieving their sustainability goals, including:
The complexity of implementing strategy across business functions (cited by 49 percent)
Competing strategic priorities (48 percent)
Lack of recognition from the financial markets (34 percent)
CEOs also believe that several conditions must be met before sustainability can be fully integrated into a company’s core business, and that businesses need to take a leadership role in bringing them about. Business action will be required in five key areas:
Shaping consumer tastes in order to build a stronger market for sustainable products.
Training management, employees and the next generation of leaders to deal with sustainability issues.
Communicating with investors to create a better understanding of the impact of sustainability.
Measuring performance on sustainability – and explaining the value of business in society.
Working with governments to shape clearer regulation and create a level playing field.
On the issue of creating a friendlier investor environment for business sustainability, fewer than 50 percent of the executives surveyed (who work for listed companies) indicated that sustainability informs their discussions with financial analysts. Even though CEOs overwhelmingly believe their sustainability activities have a positive impact on their company’s valuation – in terms of revenue growth, lower costs, reduced risks and enhanced brand reputation – quantifying that value with traditional metrics such as cost reduction and revenue growth has been elusive.
“Achieving greater environmental and social sustainability takes time, effort and a sincere leadership commitment,” said Georg Kell, Executive Director of the UN Global Compact. “Two-thirds of the CEOs we surveyed are looking to the Global Compact as a forum for sharing best practices and emerging ideas on sustainability, and we look forward to helping guide their efforts to develop effective policies and tangible practices.”
Warming investors to the notion that sustainability is good for the bottom line and regaining trust of all stakeholders in the wake of the global financial crisis are other critical issues CEOs face, according to the survey.
“CEOs told us they have by necessity been on the defensive during the downturn, but that they feel now is the time to get on the front foot in aligning sustainability with core business strategy and execution” said Mark Foster, Accenture’s group chief executive, Management Consulting and Global Markets. “Business leaders recognize they are going to have to take a real lead, for example, holding the line on sustainability in their business models; tackling the roadblocks with diligence in tough to crack areas like supply chain and performance management; and working hard to respond to and shape customer demands that turn sustainability into an opportunity for growth and innovation.”
According to the survey findings, three corporate attributes – brand, trust and reputation – were by far the primary considerations CEOs cited for acting on sustainability. They were identified by 72 percent of the respondents as one of their biggest motivators, followed in descending order by: the potential for revenue growth and cost reduction (cited by 44 percent), personal motivation (42 percent), consumer and customer demand (39 percent) and employee engagement and retention (31 percent).
83 percent said the economic crisis elevated the role of sustainability and ethics in building trust in business
80 percent said it raised the importance of sustainability as a leadership issue for top management
77 percent said it led them to take a longer-term view of business and the role of sustainability
Among the survey’s additional findings:
Education and climate change were identified by respondents as the “big issues” they face, with resource scarcity and health starting to appear on the horizon. Education was identified by 72 percent of the respondents as the most important development issue for the future success of their business, followed by climate change at 66 percent.
91 percent of CEOs said their companies would employ new technologies to address sustainability issues over the next five years, such as developing renewable energy and creating greater energy efficiency.
78 percent of the respondents believe that companies should engage in collaboration with a variety of stakeholders to address sustainability issues. Examples of potential partnerships include suppliers, NGOs and governments.
“It is clear from the survey results that global business has its work cut out in order to build sustainability programs that become key components of a company’s core business,” said Peter Lacy, who led the study and is managing director, Sustainability Services at Accenture for Europe, Africa and Latin America. “If sustainability does become fully integrated into global businesses within the next decade, the regulatory, technology, investment and consumer changes required will be staggering, creating significant winners and losers across businesses and industries.
“However, it’s great to see that some progress is being made, and that the movement toward a more sustainable economy and business context is clearly gaining momentum.”
About the United Nations Global Compact
Launched in 2000, the United Nations Global Compact is a call to companies around the world to align their strategies and operations with ten universal principles in the areas of human rights, labour, environment and anti-corruption, and to take action in support of broader UN goals. Through the development, implementation, and disclosure of responsible corporate policies and practices, business can help ensure that markets advance in ways that benefit economies and societies everywhere. The Global Compact is not a regulatory body, but a voluntary leadership platform for dialogue and learning. With more than 8,200 signatories in more than 135 countries, it is the world’s largest corporate responsibility initiative.
2010 UN Global Compact Leaders Summit: Building a New Era of Sustainability
24-25 June 2010, New York
Chaired by UN Secretary-General Ban Ki-moon, the UN Global Compact Leaders Summit 2010 will bring together more than 1,200 leaders from all sectors to elevate the role of responsible business and investment in bringing about the needed transformation to more sustainable and inclusive markets. More information: www.leaderssummit2010.org.
Accenture is a global management consulting, technology services and outsourcing company, with more than 181,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$21.58 billion for the fiscal year ended Aug. 31, 2009.
National Sustainability Conference, Singapore 29/30 July 2010:
The Office of Environmental Sustainability (OES), National University of Singapore and the Workplace Research Centre (WRC), University of Sydney are jointly organising The National Sustainability Conference 2010, entitled “Environmental Up-Skilling & the Green Collar Economy”. This conference builds on the Climate Change @ Work series of conferences which take place in Australia and promote achieving sustainability in the workplace through sustainable leadership and management practice.
This year the theme of the 2nd National Sustainability Conference will be the Future Landscape of Environmental Economies in the Asia Pacific Region.
The conference will be held on the 29th & 30th of July 2010 at the Amara Hotel.
This conference will promote achieving sustainability in workplaces through sustainable leadership and green business solutions. The role of the workplace as a major player and as a solution provider within the international climate debate is now recognized, and interaction with the public and corporate policy agenda is increasingly important.
The main themes of the 2010 conference will centre on important management issues, such as how sustainability practices will affect workplace relations, skill demands and career opportunities, to operational issues such as carbon emissions mitigation practices in the generic workplace. It will feature case studies from companies who will be showcasing how they have driven and developed sustainable business practices in their organisations.
The conference comprises three sessions:
Session 1: Future Landscape of the Environmental Economies in the Asia Pacific Region
Session 2: Growing the Sustainable Workplace
Session 3: Environmental Up-skilling: Implications for Skills and the Labour Market
We are expecting an audience of around 200-300 people broadly ranging from industry experts and professionals to Environmental and HR Managers, policy institutes, government officials, NGO representatives, academics and students.
Go to the website for the full conference programme and speakers.
ABC Carbon Director, Ken Hickson is a speaker at the conference on the subject on “Green Investing and Green Venture Capitalism”. His book “The ABC of Carbon” is being provided to all registered delegates at the conference.