Just in time for the BSR conference running this week in San Francisco, BSR and GlobeScan published their fifth annual State of Sustainable Business Survey report. One of the world’s largest annual surveys of corporate sustainability executives, this report provides an interesting look into the state of sustainability in business.
The survey’s comprehensive exploration of companies’ attitudes and behavior generated a balanced presentation, showing both the achievements and challenges of companies in embedding sustainability into business. Add to it the ability to compare the results to past surveys and you get a valuable tool to check the pulse of sustainability in business.
The survey is full of interesting findings and lessons. Here are four of the more important lessons I learned:
This is an interesting contradiction - on one hand companies believe climate change will become more important next year, but on the other hand, the priority they give to climate change is systematically declining. How can that be?
One reason might be found in the barriers to integrating sustainability into business. According to the report, convincing leadership of the value of integrating sustainability and changing management mentality are the most commonly mentioned barriers. So it looks like many CEOs and boards are still not convinced of the value of taking steps to reduce their companies’ exposure to climate change risks, no matter how likely these risks seem to be. In other words, for many companies, climate change is still not a material issue.
Another reason seems to be that companies believe that substantial progress on climate change can take place only through collaborations. As the report notes, the problem is that while government is seen as a key player in this issue, respondents find government to be the most difficult stakeholder group to collaborate with. So if companies believe that they can move forward on climate change mainly through collaborations, where government will have an important role, but they don’t really trust the government when it comes to collaborations, is it any wonder companies have little incentive to do anything at all?
I was surprised that one big event wasn’t even on the list – Hurricane Sandy. Even though this event was considered to be almost a game changer when it comes to climate change awareness by both the public and policy makers, it didn’t make the list. One can only wonder if this is an indication of business’ suppression of the fact that climate change is already here or just of the short memory banks of respondents.
The most frequent reasons given currently for not measuring ROI were that it’s too complicated or difficult to measure (24 percent), lack of methodology, tools, metrics, or data (20 percent), not a priority or not relevant to company (14 percent), and limited resources (10 percent).
You can see how calculating the ROI on sustainability has remained a challenge also from the fact that when companies actually measure the ROI, it’s mostly in terms of energy reduction (23 percent). Maybe once companies have a better way to comprehensively measure the ROI on sustainability, the rest of the pieces will fall in place – from convincing the c-suite of the value of sustainability to integrating it into the core of the business.
At the bottom of the list you can find marketing (28 percent), strategic planning (28 percent) and finance (16 percent). As the report notes, the ongoing disengagement between the finance and sustainability functions can be a major barrier to the long-term planning needs of corporate sustainability.
Interestingly, the findings show decline or no change in the levels of engagement with all functions of the company comparing to 2011. It might suggest that CSR departments are not mastering yet what Tim Mohin called in his book, Changing Business from the Inside Out: A Treehugger’s Guide to Working in Corporations, the most important skill they need in order to succeed – communication. As Mohin wrote, CSR managers need to master this skill because they “lead a function where you have broad responsibility for issues that you have almost no authority to control.”
Raz Godelnik is the co-founder of Eco-Libris and an adjunct faculty at the University of Delaware’s Business School, CUNY SPS and Parsons The New School for Design, teaching courses in green business, sustainable design and new product development. You can follow Raz on Twitter.
Raz Godelnik is an Assistant Professor and the Co-Director of the MS in Strategic Design & Management program at Parsons School of Design in New York. Currently, his research projects focus on the impact of the sharing economy on traditional business, the sharing economy and cities’ resilience, the future of design thinking, and the integration of sustainability into Millennials’ lifestyles. Raz is the co-founder of two green startups – Hemper Jeans and Eco-Libris and holds an MBA from Tel Aviv University.