From a business perspective (not to mention other perspectives), certain current events haven’t treated sustainability kindly. Last year’s much-publicized shortcomings of the climate talks in Copenhagen turned into this year’s less-publicized replica in Cancun — leaving questions unanswered about the future regulatory and carbon-price landscape. And the global economy’s “recovery” has been more halting than hoped, at least in the West.
All of which makes the findings of our second annual Sustainability & Innovation Global Executive Study — a collaboration between MIT Sloan Management Review and the Boston Consulting Group — more surprising than expected.
Two discoveries immediately stand out:
1. Despite the lingering weight of the downturn, businesses claim to have increased the management attention and investment they’re committing to sustainability. In 2010, 59% of companies say they increased their commitment; only 3% decreased it and 34% reported “no change.” What’s more, in 2011 companies that plan to increase their investment rises to 68%, according to survey respondents asked about their strategic plans for the year ahead.
2. But the story is more complicated than that. More significant than the finding that business in general is aiming to capitalize on sustainability (even as governing bodies cannot) is the finding that when it comes to sustainability we are now entering a world with two speeds. Survey results show that a gap has grown between companies that embrace sustainability-driven strategy and management and companies that don’t. Embracers define sustainability differently, prioritize activities differently and get different — and better — competitive results.
The Leading Question
How are sustainability pressures changing management today?
Findings
- Businesses are increasing their investments and attention.
- A “two-speed” sustainability landscape is emerging, with a gap between “embracers” and non-embracers.
- The C-suite is increasingly on board, but not for environmental reasons.
Signals pointing to this two-speed world appeared repeatedly during in-depth executive interviews that were part of the study. Small example: One energy company vice president described the sudden rise of sustainability-practice scrutiny by mainstream investment managers. One of the frameworks, the Goldman Sachs “Sustain” framework, is explicit.
“The analyst industry is very competitive. They’re always searching for predictors of company performance, and they’re now looking at sustainability. They’re acting on the assumption that our efficiency with resources, our employee retention — all of those sustainability measures — are predictors of overall business profitability.”
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What a fabulous article? I truly enjoyed reading it. It is informational and timely.
Thanks for choosing this topic.
HG Parsa
it is true that sustainabilty is the level upon which an organizations profitability is observed.it is at this level that a companies economies of scale is widened hence flow of profits.
Very interesting article, and survey, that shows that sustainability is here to stay. The 2-speed sustainability landscape is not that surprising, it looks like the typical split between pioneers and followers when it comes about innovation. Another survey I read last year showed that the level of implication of Top Management – and which department within the company was responsible for leading the sustainability strategy, were critical. Companies with a Board member or VP directly involved were key to success.
What is “sustainability,” and what is being sustained?