Senior leadership is the most critical driver of sustainability within a business and nearly half of businesses (44 percent) believe engagement with business leaders will be the most important factor in successfully implementing a sustainability strategy over the next three years, according to a new study by the Economist Intelligence Unit (EIU).
Sustainability Insights: Learning from Business Leaders, commissioned by Coca-Cola Enterprises, is based on a survey of more than 300 European business executives; it explores how businesses’ sustainability strategies have performed in recent years and identifies the key drivers for future success.
The study found that, at the Board level, 28 percent have periodic meetings addressing sustainability, but only 18 percent of companies have directors who assess the success of sustainability initiatives.
The research identifies the need to build a stronger business case to convince the wider European business community of the value of putting sustainability at the heart of its operations. While 52 percent of companies have been able to maintain their sustainability agenda despite the economic downturn, almost half (44 percent) of respondents report that the biggest barrier to implementing a sustainability strategy is perceived high costs, coupled with a lack of belief in rates of return.
“Despite the challenging economic environment, companies have largely stayed with their sustainability goals,” said Brian Gardner, senior editor at the Economist Intelligence Unit. “What we are seeing now is a real shift to mainstream sustainability-related initiatives in Europe. Companies are learning how to better integrate this into their businesses profitably. There is still a lot of room to improve but this is a profoundly positive change.”
For those companies that recognize the value of sustainability, the benefits they cite include differentiation from competitors (32 percent) and enhanced stakeholder engagement (29 percent), while only one in five cite boosted profits as a key benefit of their sustainability endeavors.
Leading companies are increasingly turning to collaboration to maximize resources and intelligence, the report says. Nearly a third of businesses now work with competitors to seek out ideas for sustainability innovation, and a similar number (27 percent) work with NGOs and civil society. Over the next three years, businesses say that partnerships will be important contributors to driving sustainability success.
Sally Uren, chief executive at Forum for the Future, is quoted in the report as saying she sees this as a significant shift, taking companies from "tactical responses to a set of environmental and social issues" to "responding in a strategic fashion to big macro trends in order to secure the path to long-term value creation."
More than a quarter of companies believe technological innovation will also drive the success of their sustainability strategy in the next three years. Additionally, 61 percent say that technological developments contribute to sustainability-related innovations, and 41 percent say they’ve successfully harnessed technology to improve their environmental impact.
“Business leaders need to embrace disruptive new approaches to sustainability — both within our own organizations and through our value chains,” said John F. Brock, chairman and chief executive officer at Coca-Cola Enterprises. “We need to advocate for this among the broader European business community to create breakthroughs in sustainable business.”
A recent survey of 1,000 CEOs found that less than a third (32 percent) of CEOs believe the global economy is on track to meet the demands of a growing population, while two-thirds (67 percent) report that the private sector is not making sufficient efforts to address global sustainability challenges. Still only 38 percent say they currently are able to quantify the business value of sustainability.