14 July 2010 – In only four years the world’s business and civil leaders have undergone a “fundamental shift” in attitude to sustainability, according to a new report from Accenture.
Nearly all the surveyed chief executive officers – 93 per cent –said sustainability was important to their company’s future.
The research for the report, believed to be the largest study of its kind, surveyed 766 CEO members of the United Nations Global Compact, and included extensive interviews with 50 member CEOs and further interviews with more than 50 business and civil society leaders.
The changes since Accenture’s last Global Compact Survey in 2007, revealed significant changes.
“Then [in 2007], sustainability was just emerging on the periphery of business issues, an increasing concern that was beginning to reshape the rules of competition,” the report found.“Three years later, sustainability is truly top-of-mind for CEOs around the world.”
Among the report’s key findings were that:
- 72 per cent of CEOs identified strengthening brand, trust and reputation as the strongest motivator for taking action on sustainability issues.
- 66 per cent of CEOs identified climate change as one of the critical development issues for the future success of their business, second only to education at 72 per cent.
- The ways in which CEOs were addressing sustainability issues are changing, with three key ways that strategies are shifting toward a new era of sustainability.
The three key strategies are:
- The consumer is (or will be) king [or queen] – 58 per cent of survey respondents selected the consumer among their most important stakeholders, even above employees (45 percent) and governments (39 percent).
- Importance of technology and innovation – 91 per cent of CEOs reported that their company would employ new technologies, for example, , renewable energy, energy efficiency, information and communications technology, to help meet their sustainability goals over the next five years.
- Collaboration is critical – 78 per cent of CEOs believe that companies should engage in industry collaborations and multi-stakeholder partnerships to address development goals.
Other key points are:
- A new sustainability era on the horizon: There was widespread agreement among CEOs about what the next era of sustainability will look like: It is one where sustainability is not only a separate strategic initiative, but something fully integrated into the strategy and operations of a company.
- 81 per cent of CEOs—compared to just 50 percent in 2007—stated that sustainability issues are now fully embedded into the strategy and operations of their company. However, it has yet to permeate all elements of core business—that is, into capabilities, processes and systems. There is a significant performance gap between those CEOs who agree that sustainability should be embedded throughout their subsidiaries (91 per cent) and supply chain (88 per cent), and those who report their company is already doing so (59 per cent and 54 per cent, respectively).
- How long will it take before the majority of companies worldwide reach this new era in which sustainability is fully integrated across their global business footprint? 54 per cent of CEOs surveyed feel that this tipping point is only a decade away—and 80 per cent believe it will occur within 15 years.
- Investor uncertainty -Many CEOs believe that the investment community, by failing to factor performance on sustainability issues into valuation models, is not supporting corporate efforts to create value through sustainable products and services
- Consumer uncertainty -The consumer may be king when it comes to driving profitable sustainability, but CEOs surveyed are looking for clearer signals that sustainability actually drives buying behaviors.
- The survey found that 80 per cent of CEOs believe that the economic downturn has raised the importance of sustainability as an issue for top management. Just 12 per cent of CEOs report that their company has reduced investment in sustainability as a result of the downturn— and 74 per cent say that the downturn has led their company to align sustainability more closely with core business.
- Commitment – Bolstering the continued commitment to sustainability during the economic downturn has been demand for sustainable products and services as well as businesses having been forced to examine closely how their sustainability activity delivers core business value, measured in terms such as cost reduction and revenue growth.
For the full report click here