More Than Window Dressing, Sustainability Can Drive Corporate Growth

Nov. 19, 2009
Executives stress importance of sustainability initiatives in their business strategy, study findings show.

The seeming speed with which corporations embraced sustainability in recent years and then publicly shared their many initiatives in this area brought with it a certain level of skepticism. Were these public relations efforts only? Do they contribute in any way to corporate growth? Are they sustainable?

Findings from a recent survey show that sustainability initiatives have become integrated into many businesses' strategy. Indeed, fully 78% of respondents to an Economic Intelligence Unit survey identified sustainability initiatives as very important to somewhat important to their overall business strategy today, with 87% reporting they regard such initiatives as important to their future growth plans. The respondents spend about 22% of their working time integrating sustainability initiatives into their business strategy.

Profitability is largely the reason why. Some 86% of survey respondents reported that sustainability can enhance their company's revenue growth, and 32% said revenue growth is one of their primary motivations to pursue sustainability initiatives. (Environmental protection led the list of primary motivations, cited by 35% of respondents.)

Nevertheless, inconsistent implementation of sustainability initiatives has hurt firms in the past year. One in five respondents said such inconsistencies have decreased their ability to execute strategy and hampered innovation. Another 18% said slower time to market with new products resulted from inconsistent implementation of sustainability initiatives.

What are these inconsistencies? Some 37% of those surveyed said they lack clear objectives or mandates, 36% spoke to the complexity of consistent implementation, and 29% said senior management lacks interest in or understanding of sustainability initiatives.

For about one-quarter (27%) of respondents, the embrace of sustainability initiatives has primarily delivered rewards. Not only were they doing a better job than their peers in integrating such initiatives into their core strategy and making a financial investment in sustainability, but they were also delivering better financial results. Some 35% of them said their financial performance was stronger than their peers and 33% believed their revenue growth was better as well. Additionally, 43% of these sustainability leaders said sustainability was important to their customers.

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