Embracers Are Top Performers
If sustainability embracers tend to be larger, in heavier industries and in growing markets, these are not the only characteristics they share. Critically, embracers not only claim that sustainability strategies are necessary to be competitive — they also believe these strategies are helping them to gain competitive advantage. Indeed, the overwhelming majority of these companies see themselves as outperforming their competitors, with 70% of respondents stating this to be the case, compared with only slightly more than half (53%) of the cautious adopters. Moreover, a larger number of cautious adopters lack confidence about their competitive position. Some 14% told us that they were underperforming relative to industry peers — more than double the number of embracers that see their business in this light.
Embracers are also confidently making the link between sustainability and profitability. Part of this is the ability to increase sales by providing new products valued by consumers who care about issues such as ethical supply chains and energy efficiency. P&G’s director of global sustainability Peter White sees these as including “products that allow consumers to save energy and save money, products that have clear social sustainability benefits in terms of saving people time, empowering women and so on.” Developing these products, he argues, is a way “to actually build your business.”
In some cases, the downturn has even offered companies an opportunity to sharpen their focus on areas in which sustainability can deliver competitive edge. “In the economically challenging environment that we’re in, there is really no room for activities that are not core to the business,” says Duke Energy’s Bowman. “So we have had to do some triage of our corporate services and corporate programs and separate those that are nice to do from those that are necessary to do. That has given us an opportunity to really showcase the business value of sustainability … on many different levels — everything from reputation to new products and services.”
Duke Energy is not alone. Embracers are in fact three times as likely to believe that their sustainability decisions have been profitable. While almost the same number of embracers and cautious adopters believe they are losing money on their sustainability investments, some 66% of the embracers say their organization’s sustainability-related actions or decisions have increased their profits, compared with only 23% of cautious adopters that believe this to be the case.