Six growing trends in Corporate Sustainability summarizes results from 272 respondents from 24 sectors who are employed by companies with annual revenue greater than $1 billion, with 85% of the people based in US. So, it is a fairly correct representation of the corporate sustainability sentiment in the US.
“These trends suggest that sustainability efforts are now well-integrated into the corporate fabric of a growing number of large and midsized companies. But the effectiveness of such efforts may be limited by internal systems that don’t allow companies to effectively measure, track and optimize their sustainability impacts, or to understand and manage the risks of insufficient action. To do so will require new levels of engagement by the C-suite, and more sophisticated methods of sustainability reporting and assurance”
The six growing trends are:
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Sustainability reporting is growing, but the tools are still developing
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The CFO’s role in sustainability is on the rise
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Employees emerge as a key stakeholder group for sustainability programs and reporting
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Despite regulatory uncertainty, GHG reporting remains strong, along with growing interest in water
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Awareness is on the rise regarding the scarcity of business resources
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Rankings and ratings matter to company executives
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Though the main driver was not going with the philosophy of “doing well by doing good” but rather of cost reduction. As any business would do during tough times is to reduce their costs – which becomes the major sustainability driver. Stakeholder expectations, managing risks, revenue generation and government regulation follow suit.
In the coming year, energy costs will be the most important factor in driving sustainability initiatives, closely followed by changes in customer demands and brand risks. Oddly, still about 40% of the companies are doing it to avoid fines or penalties for non-compliance. And about 53% of respondents plan for their budgets for sustainability to increase in the coming years. A quarter of the companies are working directly with the suppliers to measure their footprint and performances, while there is no single company (that responded to the survey) that is not invloved with their suppliers in some way or the other.
These 6 growing trends are positive and represent a cross-section of the US industry at large, yet we would like to see the CFO getting involved in sustainability at a more deeper level viewing sustainability as a profit center driving further investments. Sustainability champions are good but nothing gets done without resources at hand. Businesses that are too much natural resource-centered (water, energy, forest products, rare earth minerals and metals) are the ones that will be affected the most and they need to take the right steps to reduce their impacts.
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