Why Corporate Sustainability Goals Fail (And What Leaders Can Do About It)

A new report from GlobeScan and the software giant Salesforce pinpoints exactly what's keeping business leaders from reaching their sustainability goals.

Ninety-three percent of sustainability, finance, and technology leaders think sustainability is key to the financial success and longevity of their businesses, but only 37 percent say sustainability is well-integrated into company operations, according to the report based on   a survey of over 200 professionals across North America, Europe and Asia.

While sustainability excellence is often linked with long-term business success, many corporate leaders are not giving sustainability the capital it needs to succeed, the report found. 

TriplePundit spoke to Robert G. Eccles, founding chairman of the Sustainability Accounting Standards Board (SASB) and co-author of the report, about how companies can address the gaps that are stalling their progress. 

“Our results sadly show that, despite all the happy talk about the importance of sustainability, senior management teams aren’t giving it the attention and resources it needs to really contribute to value creation,” Eccles said. “Companies either need to dial back their claims about the benefits of their sustainability initiatives, or face this challenge head-on with more senior management commitment and capital.”

How companies can close the gaps that stand in the way of their sustainability goals

While companies face significant barriers to implementing sustainability programs and realizing the value created by those programs, some solutions and strategies can close the gaps. 

Access to high-quality sustainability performance data, for example, is critical to measure progress and achieve sustainability goals. Yet only 27 percent of companies have access to such data, even in the face of new regulatory frameworks like the European Union's Corporate Sustainability Reporting Directive, according to the report. Upcoming reporting requirements may leave companies that have not yet invested in data collection and management resources exposed to risk.

“Data builds resilience,” said Sunya Norman, senior vice president of environmental, social and governance (ESG) strategy and engagement at Salesforce. “There is so much coming at business executives all the time. We are in unprecedented times and the world is moving fast. Sustainability is a piece of the information puzzle that executives need in order to react to the big picture. It feeds into how we navigate multiple geopolitical crises, the talent wars, the polarization of issues. The CEOs of tomorrow need to have their head on a swivel and take in data from all parts of their business and society.” 

Investing in data management tools and resources is imperative for sustainability progress, regulatory compliance and value creation. However, the data must be accessible and understandable to everyone within the organization. Finance and technology are widely recognized by company leaders as critical for advancing sustainability goals, but surveyed professionals reported insufficient collaboration between these teams and the sustainability teams at their companies. 

“With [new reporting frameworks], companies need to upgrade their internal control and measurement systems,” Eccles said. ”This is a great opportunity for a CFO to also learn sustainability because the CSO and CFO will have joint responsibility for reports.” 

Norman agreed, adding: “A huge part of the role of a CSO or sustainability leader is helping different parts of a business connect. Integration is the only path forward, and companies need someone who can see across the business, take the horizontal view and help connect the dots.” 

Both Norman and Eccles emphasize the need for cross-functional collaboration, including comprehensive strategic planning processes that fully integrate sustainability. 

“Whenever a company talks about their sustainability strategy, we should wonder how it is connected to their corporate strategy,” Eccles said. “Companies should not just have a sustainability strategy. They should have a sustainable corporate strategy. We should ask if sustainability is a part of their strategic planning process and if it is tied to capital allocation.”  

Ultimately, no sustainability program can succeed without access to capital. Yet it is consistently underfunded. Only about a quarter of corporate leaders are allocating the necessary levels of capital to sustainability, according to the report.

“Companies say that they care about sustainability, but when push comes to shove, they have to invest the money,” Eccles said. “If the CSO sees that sustainability is not sufficiently resourced, they have to own it and go to their boss, even if their boss is the CEO. The company must understand themselves, find the gaps, accept those gaps, and stop greenwashing themselves … It’s a language problem. Until you can get a conversation on sustainability’s value creation over a period of time, companies won’t put capital into it.” 

The future of sustainability reporting

For companies to reach their sustainability goals, they need to be proactive about establishing their narrative and ensuring that it is consistent with their existing strategy, Eccles said. 

“Sustainability shouldn’t be a moral imperative,” he said. “If companies present themselves as though they are solving systemic problems when they are not, that is problematic. Don't make claims about sustainability unless you've attached that to your strategy.”

Companies should also do their best to ignore the political headwinds. 

“There are ESG culture wars. The general response has been to lie low and keep doing what we are doing and hope it blows over. That is a fundamental mistake," Eccles said. "The goal isn’t to make critics happy. The goal is to say who we are, what we stand for, what we can and cannot do, and flip it around so the company is proactive and controlling their narrative rather than reacting to outside forces. The good news for sustainability professionals is that they are in the bullseye now. There is money to step up and shine, but they have to find the courage to do so.”