Companies struggling to adopt sustainability, say Boston Consulting Group and MIT

Companies value sustainability issues but are failing to fully integrate solutions into their business plans, a new report has found. Many are also struggling to connect sustainability with profits.

A global survey by the Boston Consulting Group and MIT Management Review questioned over 1,800 executives and managers from commercial enterprises. Respondents covered a wide variety of sectors and were surveyed about the importance their company placed on sustainability.

The report said, “Although some companies are addressing the issues, we found a disconnect between thought and action on the part of many others.

“For example, nearly two-thirds of respondents rate social and environmental issues, such as pollution or employee health, as ‘significant’ or ‘very significant’ among their sustainability concerns. Yet only about 40% report that their organisations are largely addressing them. Even worse, only 10% say their companies fully tackle these issues.”

Over the last five years the number of businesses with a sustainable business case has only risen 7%, reaching 37%. The small rise is likely to be linked to businesses struggling to adopt sustainability. Since 2008 the number of companies that have tried but failed to build a sustainable business case has increased from 8% to 20%.

The majority of companies are still not able to connect sustainability with profits, with only 32% saying they think it has added to revenue. Separate research suggests that sustainability and increasing revenues can coincide. Some 25 companies, out of 49, exhibited revenue growth whilst decarbonising.

Despite the lack of action respondents said sustainability issues were significant. Economic issues, such as competitiveness and market pressures, were deemed the most important with 80% saying tackling them was valuable. This was followed by environmental (70%), for which the biggest concerns are energy efficiency, pollution and waste management, and social issues (66%).

The report added that businesses fall into two categories: the ‘walkers’, which ‘walk the talk’ and take action on the issues; and ‘talkers’, which are equally concerned about sustainability but fail to address the problems or do so to a lesser degree.

The so-called walkers were found to focus on five business fronts: sustainability strategy, business case, measurement, business model innovation and leadership commitment.

There was little disagreement that sustainability is necessary to be competitive. Eighty-six per cent of respondents said it is or will be, and the companies that are progressing now are more likely to have long-term viability.

Further reading:

51% of corporations emitting unsustainable levels of CO2, study finds

World on track to use up entire 21st century carbon budget by 2034

IPCC climate report: global temperatures likely to exceed 2C this century

Carbon Trust says engaging workers on energy and waste could save UK £300m

We are a long way from achieving stability in supply chains