Sustainability has traveled lightyears in the last two decades, but is not yet woven into the fabric of the American corporation, according to this year’s BSR/Globescan State of Sustainable Business 2012 survey of 550 member companies. The survey, looking at the last 20 years in honor of BSR’s 20th anniversary, shows that transparency and reporting have been the greatest area of progress, but that this increased knowledge has not yet changed the behavior of investors, R&D and product design, or government affairs.
“In the last 20 years, everything has changed, and nothing has changed,” said CEO Aron Cramer. “There have been a ton of successes, but if you look at the Millennium Development Goals or the amount of carbon in the atmosphere, we’re going in precisely the wrong direction. We need, as a community, to never mistake activity for achievement. We need to push fast forward.”
When asked which areas they felt business had taken the most leadership in, BSR’s 550 survey respondents chose measuring positive impacts (40 percent), responding quickly and efficiently to accidents (38 percent), and creating innovative products and business models designed for sustainability. They felt there had been less leadership on improving stakeholder engagement, working with NGOs, increasing board and CEO involvement, aligning with lobbying goals, and reducing executive compensation.
However, when it came to which sustainability efforts were best for profitability, survey respondents identified different priorities: “creating innovative products and business models for sustainability” was picked by 67 percent of respondents, followed by “measuring and demonstrating positive social and environmental impacts” (42 percent) and “improving stakeholder dialogue and engagement” (35 percent.)
We know a lot, but is everyone paying attention?
The survey found that over the last couple of years, a surprisingly high number of respondents are measuring the ROI of their sustainability efforts, 38 percent, with another 20 percent saying they intend to start soon. However, that number has stalled over the last few years, according to respondents who said it was too hard to do (24 percent), no demand for it (22 percent), lack of resources (8 percent) or simply not knowing how (7 percent).
So why hasn’t all this news reached investors or boards of directors?
“Reporting is a very well-entrenched part of the sustainability landscape,” said Cramer. “It aims to reach a very diverse range of authors, and reaches a lot of important audiences but seems to have marginal impact on investors.” One of the solutions that BSR is pushing is International Integrated Reporting accounting, where sustainability data is combined with traditional financial reporting. “If done right, it has great potential,” said Cramer.
Asked about overall current sustainability priorities, the respondents named human rights, worker rights, and climate change.
The most important leadership challenges named by the respondents were:
– integration of sustainability into core functions (62 percent)
– planning for the long-term (31 percent)
– convincing investors that sustainability enhances value (29 percent)
The public vs. business vs. government
BSR said its respondents remained “pessimistic” about the amount of public trust in business. The majority is neutral about the amount of trust the public has, with 26 percent believing the public has little trust.
One bright spot, Cramer noted, was increased faith in the potential of public policy solutions to solve ecological and social problems.
“We saw a collapse of that since Copenhagen (with the breakdown of the international climate talks),” said Cramer. “But we’ve seen an uptick – that’s really interesting. I think we’re reverting to a more natural level.”
Most of the respondents were sustainability executives and officials, and BSR has not found a lot of interaction with the lobbying efforts of companies, which are usually very traditional and focused on fairly narrow regulatory goals.
BSR live in New York this week
BSR’s 20th anniversary conference BSR 2012: Fast Forward is this week in New York, and the report will be presented and discussed there in a number of sessions. The conference schedule can be viewed here….keynoters include Marc Bolland, the CEO of Marks and Spencer, Tracy Palandijan, CEO of Social Finance, and José Ramos-Horta, who won the Nobel Peace Prize for helping end the war in East Timor. 3p staffers Raz Godelnik and Nick Aster are on hand to bring you all the news from the conference.