Progress and Perspectives for Business Sustainability

Abstract

Sustainability has become an integral part of the strategy and mission of many organizations, and this translates into business practices and communication. For example, global automaker BMW published its first sustainable value report in 2014 to demonstrate the company’s sustainability strategy and the progress the company had made in integrating sustainability into its corporate processes. A series of surveys highlights the relevance of businesses implementing sustainable practices. In 2002, Ernst and Young conducted a survey of CEOs within the Global 1000 list of companies, and found that ninety-four per cent of respondents agree that a business sustainability strategy could result in financial benefits, but only eleven per cent actually implemented any such strategies in their operations. That is, executives recognize the value of sustainability strategy, but the majority fails to maximize the associated business opportunities (Ernst and Young 2002). A survey conducted by KPMG in 2008 also found that about eighty per cent of companies agreed that an understanding of how to make their businesses more sustainable within the areas of identifying and prioritizing issues, developing strategies and policies, and measuring sustainability performance was a challenge (KPMG 2008). More recently in 2010, Accenture, with the United Nations Global Compact (UNGC), surveyed 766 CEOs from over 100 countries and 25 industries, and found that most CEOs agreed that ‘sustainability is more important than ever to the future success of their businesses’ (Accenture 2010, p. 16). A recent worldwide survey of 1,946 executives undertaken by McKinsey & Company (2010) showed that more than fifty per cent consider that sustainability is a very important, or extremely important, proportion of their business practices. In particular, environmental sustainability, for example in climate change and waste reduction, has become an urgent issue for many industry sectors. A majority of respondents see sustainability as creating real value. It is agreed by seventy-six per cent of executives that sustainability contributes positively to shareholder value in the long term, while fifty per cent see short-term value creation (McKinsey & Company 2010). Similarly, MIT Sloan Management Review, in partnership with the Boston Consulting Group, has conducted a global executive sustainability survey every year for the last few years. The recent 2014 survey included responses from more than 3,795 executive and managers from 113 countries (Kiron et al. 2015). The survey reports suggest that corporate sustainability is moving steadily away from ad hoc or opportunistic efforts towards strategic and transformational initiatives that engage multiple entities. The main goals of sustainability collaborations include corporate benefits such as gathering access to resources and developing new markets. Ninety per cent of executives agree that businesses need to collaborate to address the sustainability challenges they face. Despite consensus on the importance of these collaborations, only forty seven per cent of respondents are actually engaging in sustainability collaborations and partnerships.