Top down commitment to sustainability thwarted by economic climateOctober 2013
Despite a top down approach to sustainability, more than two thirds of chief executives (67%) believe that business is not doing enough to address global sustainability challenges, according to a survey by the United Nations Global Compact and Accenture.
The report is the largest study of top executives ever conducted on sustainability and details the views of 1,000 chief executives.
Entitled Architects of a Better World, the study demonstrates broadening awareness on the part of global business of the opportunities presented by sustainability. Fully 78% of surveyed ceos see sustainability as a route to growth and innovation, and 79% believe that it will lead to competitive advantage in their industry. However, ceos see the economic climate and a range of competing priorities creating obstacles to embedding sustainability at scale within their companies.
“With thousands of companies, from market leaders to small enterprises, committed to responsible business practices, we can see that there is enormous momentum. Now, we need policymakers, investors and consumers to send the right signals to spur the next level of corporate sustainability action, innovation and collaboration,” commented Georg Kell, executive director of the UN Global Compact.
The barriers to addressing sustainability challenges identified by the ceos were primarily a lack of financial resources, cited by 51% of respondents; 40 % say that economic conditions have made it difficult to embed sustainability into core business.
The failure to make a link between sustainability and business value is the fastest rising barrier. In 2007, 18% said this deterred them from taking further action, rising to 30% in 2010. This year, 37% of responding CEOs cited this factor, and just 38 % believe they can accurately quantify the business value of sustainability.
Only 15 % of responding CEOs think business has made good progress over the last three years in making sustainability a must-have factor for consumers, even though 82% think this is critical to harnessing sustainability as a transformative force in the economy. Almost half (46%) believe consumers will always consider sustainability as secondary to price, quality and availability.
In a sign of investor ambivalence, although 52 % of respondents see investor interest as an incentive for them to advance sustainability practices, only 12 % of respondents see investor pressure as a leading motivator.
Nevertheless, only a small minority of CEOs (15 %) blame the short-termism of financial markets as a barrier, and 69 % believe that investor interest will be increasingly important in guiding their approach.
“CEOs are clearly disappointed that markets have not aligned with sustainability in the way they had hoped three years ago and would like to see more action from governments to create an enabling environment. But the good news is that they have not lost faith in the role of business to drive sustainability,” Peter Lacy, the study lead from 2007 to 2013, and managing director, Accenture Sustainability and Strategy Services, Asia Pacific. “To move from incremental to large scale transformation, businesses must accept that instead of persuading consumers about sustainability they must give them sustainable products and services they want at prices they can afford. And instead of showing investors the savings made from sustainability, the will have to demonstrate the positive business value it can generate.”
Further information: http://www.accenture.com/Microsites/ungc-ceo-study/Pages/home.aspx?c=mc_prposts_10000048&n=otc_1013
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