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Have Corporate Sustainability Efforts Hit a Plateau?

Have Corporate Sustainability Efforts Hit a Plateau?

A new survey indicates that CEOs are committed to sustainability, but they believe that market and policy incentives are needed to keep the momentum going.

In a new survey, 78 percent of CEOs say they see sustainability as a path to growth and innovation, and 79 percent say they believe that sustainability will lead to competitive advantage in their respective industries.

However, those same CEOs see the economic climate and a range of competing priorities creating obstacles to taking their sustainability efforts to the next level, according to the survey by the United Nations Global Compact and Accenture.

The results of the previous CEO survey in 2010 suggested that companies were well on their way to embedding sustainability into their core operations and business strategies.

"CEOs saw the global economy progressing toward a 'peak,' where markets would be aligned with the requirements of sustainable development, and sustainability leadership would be incentivized and rewarded," Accenture and the UN Global Compact explain in the survey report.  

However, the latest survey of 1,000 CEOs in 103 countries "reveals that business efforts on sustainability may have reached a plateau."

"It is clear that the corporate sustainability movement is broadening, with a deeper awareness and commitment evident in every quarter of the world, but many business leaders express doubts about the pace of change and the scale of their impact," the report says.

"Far from continuing to a new peak of achievement, many companies have become stuck on their ascent, unable to scale sustainability at the pace required to address global challenges and achieve business success."

Just 32 percent of the CEOs believe that the global economy is on track to meet the demands of a growing population within environmental and resource constraints, and a clear majority – 67 percent – do not believe that business is doing enough to address global sustainability challenges.

"To build upon individual pockets of real innovation, as companies large and small find new ways to combine sustainability impact with value creation, CEOs now call for a global architecture that can enable business to scale sustainability efforts from individual, incremental achievement toward new structures and systems that can tap into the evident commitment of business leaders around the world and unlock the full potential of business in contributing to the world's most pressing challenges," the report explains.

Barriers to Sustainability Progress

While 84 percent of the CEOs say they believe that business should lead the way in addressing sustainability challenges, 51 percent say that a lack of financial resources is preventing them from embedding sustainability into their core business, while 40 percent point to the global economic conditions as the top obstacle.

The failure to make a link between sustainability and business value is the fastest-rising barrier.

In 2007, 18 percent said this deterred them from taking further action, rising to 30 percent in 2010. This year, 37 percent of responding CEOs cite this factor, and just 38 percent believe they can accurately quantify the business value of sustainability.

Only 15 percent of responding CEOs say that business has made good progress over the last three years in making sustainability a must-have factor for consumers, even though 82 percent believe that this is critical to harnessing sustainability as a transformative force in the economy.

Almost half (46 percent) believe consumers always will consider sustainability as secondary to price, quality and availability.

The survey results also suggest that investors are ambivalent about sustainable business practices.

Although 52 percent of respondents see investor interest as an incentive for them to advance sustainability practices, only 12 percent of respondents see investor pressure as a leading motivator.

Nevertheless, only a small minority of CEOs (15 percent) blame the short-term view of financial markets as a barrier, and 69 percent believe that investor interest will be increasingly important in guiding their approach.

"As the CEO study reflects, the challenge at hand is to unlock the full potential of corporate sustainability to transform markets and societies around the world," said Georg Kell, executive director of the UN Global Compact.

"With thousands of companies, from market leaders to small enterprises, committed to responsible business practices, we can see that there is enormous momentum. Now, we need policymakers, investors and consumers to send the right signals to spur the next level of corporate sustainability action, innovation and collaboration."

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