The Current State of Corporate Sustainability: Insights and Implications
As we step into the second half of 2024, corporate sustainability remains a crucial driver for business success. Drawing from the Sustainable Value Creation study with Robert Eccles , Alison Taylor , Salesforce , and GlobeScan , and findings from our joint research program with the ERM Sustainability Institute, this article explores key insights and implications for sustainability professionals aiming to enhance their company's impact.
Insight #1: Senior management teams "focus" on sustainability, but do not allocate the capital
📈 Finding: A significant 93% of companies acknowledge the importance of sustainability for commercial success. However, there is a noticeable gap in translating this recognition into tangible actions, particularly in capital allocation, implementation, integration, and data management. While 52% of surveyed companies allocate significant C-suite attention to sustainability, only 23% invest substantial capital and resources to realize its potential.
📌 Implication: The next phase of corporate sustainability may be characterized by increased investment. Companies that effectively allocate resources, focusing on capital expenditures (CapEx) rather than operational expenditures (OpEx), will likely integrate sustainability more rapidly across their operations.
Insight 2: Innovation and commercializing sustainability are increasingly viewed as keys to corporate sustainability leadership.
📈 Finding: An analysis of why stakeholders recognize certain companies as sustainability leaders reveals nine leadership attributes. Stakeholders recognize companies that integrate, innovate, and commercialize sustainability efforts, emphasizing impact over rhetoric.
📌 Implication: To demonstrate leadership, companies must showcase how sustainability initiatives drive business success. Highlighting examples of innovation that contribute to growth, revenue, and profitability can enhance credibility in a low-trust environment.
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Conclusion
The key to advancing sustainability lies in the pace and scale of transformation. Companies must invest more resources despite short-term shareholder pressures. The Sustainable Value Creation study highlights the gaps in capital allocation, implementation, integration, and data management that need to be addressed to fulfill the vision outlined in the 1987 Brundtland Report.
As we navigate the fourth decade of sustainability, the urgency to operationalize sustainability practices has never been greater. By addressing investment gaps and focusing on innovation and commercialization, companies can lead the way in creating a sustainable and prosperous future.
How will your organization rise to this challenge?
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This article was written by GlobeScan CEO, Chris Coulter .