Not long ago sustainability was the almost exclusive purview of specialist professionals. In fact, getting other parts of the business to take it seriously was a major challenge. Today, however, a far broader range of stakeholders have quickly moved from spectators to full participants in their organization’s sustainability agenda.
ERM’s latest survey of 150 companies with annual global revenues ranging from USD2Bn to USD42Bn, from a cross-section of industries, explores how executives currently view sustainability within their own organizations and how prepared they feel as it rapidly grows in importance to, and influence on, their business.
We found that executives are now serious – and intensely practical – as they confront the growing business risks and opportunities associated with climate change, population change and natural resource constraints. It’s not surprising that three of the top ten threats cited by CEOs attending the most recent World Economic Forum meeting in Davos involve climate change. Over the last two years investors have forced a move for sustainability and climate change from a marginal issue for boards and executive teams to a core element of the near-term business plan. We are seeing the forces on the sustainability agenda evolve from regulatory and policy led initiatives, to customer and investor led drivers. These provide a stronger, clearer and unrelenting voice directly into boards and the C-Suite.
The push to integrate sustainability into mainstream business operations is being driven by multiple forces. Consumers continue to demand more sustainable products and services from brands. Those brands, in turn, are demanding their suppliers demonstrate performance that matches consumer expectations. Industry peers are doing better financially through sustainable business practices – often aided by new technologies that provide a competitive advantage. And employees – in particular younger talent – expect their companies to be tackling the sustainability issues they themselves hold dear.
None of this has been lost on investors who, as ERM’s previous Bridging the Gap research demonstrated, are demanding better information and accountability from companies as they make decisions based on the risks and rewards facing business. This as a driver cannot be understated. Increasingly, executives who never considered sustainability to be part of their role are being influenced by these external forces and are realizing the power and importance of embracing it in order to keep their businesses – and their own positions – relevant in a changing world.