Consumers are a big factor why CEOs are putting more emphasis on sustainability, according to a new study from Accenture and the UN
This week, the UN Global Compact and Accenture Sustainability Services are releasing the largest-ever chief executive study on corporate sustainability. Through an online survey and in-depth one-to-one interviews, nearly 1,000 CEOs, senior business executives, and civil society leaders have contributed to this landmark study on the state and future of responsible business in the 21st century.
It may come as a surprise to some, but perhaps the most significant finding of our study is that, despite the economic downturn and a flurry of global challenges, corporate commitment to environmental, social, and governance issues remains strong: 93 percent of CEOs see sustainability as critical to their company’s success. This signals a fundamental shift in mind sets since this survey was last conducted in 2007. Then, sustainability was starting to reshape the rules of global business. Now, it has become a strategic priority for CEOs around the world.
CEOs also told us that their approaches to sustainability are changing:
• CEOs identified the consumer as being as important a stakeholder as their business and government customers on this issue, driving companies to take action in response to new attitudes and needs.
• Ninety-one percent of CEOs report that they will use new technologies to address sustainability over the next five years. Social media in particular were highlighted as both an opportunity for increased consumer engagement but also a challenge in terms of greater transparency.
• CEOs identified partnerships and collaboration (e.g. with NGOs) as an increasingly important element in furthering goals of social development.
• Furthermore, post-financial crisis, CEOs around the globe recognize a critical role for sustainability in rebuilding trust with stakeholders. Seventy-two percent of CEOs highlighted “brand, trust, and reputation” as key motivations for taking action on sustainability.
AN IMPLEMENTATION GAP
CEOs believe they are still facing many challenges, despite significant recent progress. Externally, much uncertainty still surrounds support from the investment community or the extent to which sustainability concerns will drive consumer purchasing decisions. Another concern is the lack of clear and effective regulation. Internally, CEOs recognize that there is currently an implementation gap in meeting their ambition to embed sustainability deep and wide within their organizations, particularly along supply chains and in subsidiaries. For example, 88 percent of CEOs believe they should be integrating sustainability through their supply chains, but only 54 percent believe this is being achieved in their company. A similar performance gap is seen in subsidiaries.
In order to overcome these challenges and to reach a new era in which sustainability concerns are fully embedded in core business, CEOs believe they can take a leadership role in bringing about a number of “must-have” conditions:
• Shaping consumer and customer attitudes to build a stronger market for sustainable products and services;
• Developing new skills, knowledge, and mind sets so that businesses have the capabilities to manage sustainable development;
• Engaging proactively with the investor community to communicate the impact of sustainability activity on core business metrics;
• Embedding new concepts of value and performance management that encompass both the positive and negative affects of business on society;
• Fostering a clearer and more positive regulatory environment for sustainability.
It is clear from our conversation with CEOs that business has its work cut out in embedding sustainability into core business. It is clear that businesses face a multitude of risks, and from our interviews we see a strong sense that CEOs recognize the scale and complexity of the challenges that they face. However, they see significant progress, particularly in achieving a potentially transformational mindset shift around sustainability issues being of direct and critical importance to their future success. If this belief can be translated into tangible action, and sustainability integrated into core business within the next decade—and CEOs believe that it can, given immediate and sustained action—the business landscape will look very different: the regulatory, technology, investment, and consumer changes required will be staggering, creating significant winners and losers across businesses and industries.
Our findings highlight that companies are taking the long view on sustainability. They also realize that the journey will not necessarily be a short one. But, arguably, the modern era has never before seen such a high level of executive commitment to the environmental, social and corporate governance agenda. Many leading companies are aware of the power they have to change the world—but acknowledge that this is “the end of the beginning” and not “the beginning of the end” in the transition to a new era of sustainability.