Sustainability Benefits Exceed Expectations For A Majority Of Firms: Study
The majority of businesses say that the benefits resulting from their sustainability initiatives have exceeded expectations, according to an international survey by Accenture, London. But a hard core minority of businesses does not see sustainability as a critical or strategic investment.
The survey of 247 c-suite decision makers in the U.S., U.K. and China reveals that 72 percent think the benefits of their sustainability initiatives exceeded expectations. Only four percent failed to meet expectations. Business leaders identify the main benefits as reputation and trust (cited by 49 percent of respondents), lower costs (42 percent) and an improved brand (41 percent).
Although two thirds (68 percent) of senior business decision makers see sustainability as an integrated part of their business, a hard core of 32 percent say it is peripheral. While 66 percent see sustainability as an investment, 34 percent see it as more of a cost. And although 60 percent believe their company is investing the right level in sustainability initiatives, 28 percent say their business invests too much or far too much. The same proportion state that businesses in general are doing too much to make their working practices more sustainable.
Ninety-three percent of respondents say their company currently has sustainability initiatives. The most common focus areas are reducing the amount of electricity used and green IT (both cited by 51 percent), followed by sustainability talent and skills initiatives (47 percent) and the development of sustainability based new products and services (44 percent).
“The good news is that companies are already seeing sustainability investments generate returns in terms of market success and cost performance,” says Bruno Berthon, managing director, Accenture Sustainability Services. “The irony is that the hardcore third of businesses that don’t enjoy these benefits are likely the ones who think sustainability is peripheral to their business. Only by placing it at the heart of commercial strategy can sustainability be a channel to growth and innovation.”
Drivers And Barriers
There is a disparity between assumed and actual drivers of sustainability initiatives. Companies expect that business in general will be driven by three key external factors: investment pressure, regulations and customer expectations. In reality, however, the top motivations are a genuine concern for the environment and society (cited by 53 percent) and reducing energy and material costs (50 percent). Also important are customer expectations (47 percent) and an opportunity for higher margins and business growth (45 percent).
Cost is the most significant barrier to sustainability initiatives, with 43 percent of respondents identifying it. Other key barriers include the inability to measure sustainability initiatives (31 percent), the lack of government / local government incentives (30 percent) and the belief that one company can’t make a difference to global warming (29 percent).
“It’s clear that sustainability is no longer merely a matter of compliance, but a proactive way to energize commercial strategy,” says Berthon. “Measuring sustainability performance and results is the first practical step business leaders need to make, but requires new skills and proven methodologies. Get it right and sustainability champions can form a business case, galvanize internal support and actively secure shareholder support.”
Role Of Government
When asked who should be more responsible for ensuring progress is made in a sustainable way, 41 percent say businesses should, versus 36 percent who think government should be more responsible and 23 percent who identify individuals. Almost half (47 percent) of respondents think that business is doing the most to promote sustainable progress, against only 28 percent who think governments are and 26 percent who identify individuals.