Chapter 1: Business Is Investing More in Competing on Sustainability

The Surprising Downturn Response

While many wondered whether the economic downturn would push sustainability off the corporate agenda, our survey results indicate that the exact opposite is true. In fact, a growing number of companies are now increasing their investments in sustainability. While in our first annual survey, conducted in 2009, only 25% of respondents said they were increasing their commitment to sustainability, in the 2010 survey some 59% said this was the case. “Unlike in previous downturns and recessions, people haven’t necessarily put sustainability on the back burner,” says Nick Robins, head of Climate Changes Center of Excellence at HSBC.

The numbers become even more striking when companies look ahead. Almost 70% expect their organization to step up its investment in and management of sustainability over the next year. Moreover, our survey shows that enthusiasm for sustainability is growing across all industries, particularly in commodities, chemicals, consumer products, industrial goods and machinery retail companies, as well as conglomerates.

Such enthusiasm appears to have survived not only the downturn but also the distinct lack of progress toward international agreement on how to combat climate change. Given Climategate and the failure of Copenhagen, many expected that corporate interest in and commitment to sustainability would decline, but companies continue to launch new sustainability programs every day.

Hal Hamilton, who co-directs the global Sustainable Food Lab with support from Massachusetts Institute of Technology’s Sloan School of Management, sees the downturn as prompting an even broader shift. “The ways of doing business that we’ve accepted are up for grabs,” he says. “We’ll all, inevitably, be thinking more about resilience — resilience to all sorts of shocks. And I rather like the word ‘resilience’ — sometimes it’s better than the word ‘sustainability.’”

The Universal First Moves — Waste Reduction and Resource Efficiencies

In some ways, sustainability is a repackaging of more traditional approaches to lean manufacturing and running an efficient organization. “In this type of economic environment, we are seeing the greatest opportunity in identifying opportunities for resource and cost efficiency,” says Roberta Bowman, senior vice president and chief sustainability officer for Duke Energy. And Bowman’s view is echoed by respondents to our survey, in which waste reduction and energy efficiency emerge as the top priorities, with respondents citing improved efficiency and reduced waste as the activities their organizations currently engage in most frequently.