CEOs See Sustainability As Engine For Growth But Industry Sectors Split On Priorities

A new research study published today reveals that there are significant differences in perceptions of sustainability between CEOs in different industry sectors, and significant gaps in the level of integration of sustainability in their companies, in spite of an overall trend towards seeing the importance of business sustainability.

The study released today is based on "A New Era of Sustainability," a study conducted by Accenture and the UN Global Compact last year that revealed that 93 % of the 766 CEOs surveyed believed that sustainability will be "important" or "very important" to the future success of their company. The study released today looked much more closely at industry-level data with in-depth examinations of CEO responses in seven key industry sectors, which include: automotive, banking, infrastructure & transportation, communications, consumer goods, energy, and utilities.

Closer examination reveals that significant differences appear at the industry level. For instance, 100 % of automotive CEOs, and 100 % of executives heading large consumer goods companies, see sustainability as critical to their success. While the banking sector has not traditionally focused on sustainability, banking CEOs see these sustainability as a strategic priority, with 68 % regarding sustainability as "very important" to their future success.

On the other hand, only 22 % of CEOs in the communications sector perceive sustainability to be a "very important" factor in shaping their future success, the lowest in any of the seven industries. However, with 70 % of communications CEOs seeing the potential for revenue growth and cost reduction as a primary motivation for taking action on sustainability (the highest figure across the seven sectors), the research suggests that sustainability may be growing in importance.

"Whilst it's clear that business is now embedding sustainability at the core of their strategy and operations, "we've not had sufficient evidence on how different sectors manage this integration," said Sander van't Noordende, Group Chief Executive, Accenture Management Consulting, speaking during the launch of the reports at Accenture's Sustainability 24, an online gathering of sustainability decision makers across the world. "These industry specific insights make sustainability become real at an industry level, helping us understand the specific challenges and opportunities within each sector, as well as how leaders are going about creating competitive advantage," he added.

Some of the similarities and the differences among the sectors can be seen below:

  • Automotive - In the automotive industry, sustainability has moved beyond a moral obligation and is now viewed as a top-line opportunity. Leading automotive companies are successfully implementing sustainability across business functions and processes to drive cost reduction, revenue growth, risk management, innovation and brand value. The sector is undergoing a substantial shift, with many macro forces rapidly changing the industry dynamics. Trends such as rising fuel prices, technological innovation, global urbanization, changing consumer demands, increasing regulation, intense competition (and more) are starting to create a market environment where sustainability will be a key component for future success.
    The Numbers: One-hundred % of automotive CEOs believe that sustainability issues will be critical to the future success of their business. 95% of automotive CEOs believe that sustainability issues should be fully integrated into the strategy and operations of a company. 71% of automotive CEOs cite 'brand, trust and reputation' as one of the top three factors driving them to take action on sustainability issues. 86% of automotive CEOs believe that companies should integrate sustainability through their supply chain; only 57% believe that their company has. [See Carbon Management Is Becoming a Core Supply Chain Business Issue] - Read more
  • Banking - While the banking industry may not historically have been the sector most preoccupied with the business impact of sustainability, there is a growing recognition amongst CEOs that the crisis has been the perfect storm for the industry. The collapse in public trust is beginning to shape a new reality for banks, and growing opportunities, both in new markets and in financing the transition to a low-carbon economy, are creating new waves of growth for the industry.
    The Numbers: Ninety-eight % of the banking CEOs surveyed believe that sustainability issues will be important to the future success of their business. Strengthening brand, trust and reputation is the strongest motivator for taking action on sustainability issues for 76 % of banking executives. Eighty % of banking CEOs stated that sustainability issues are now fully embedded into the strategy and operations of their company. - Read more
  • Communications - Leading companies in the communications sector are already beginning to position themselves to take advantage of new waves of growth, and those who act quickly have the potential to realize a significant competitive advantage. The research, however, suggests that CEOs in the communications industry may not yet fully appreciate the scale of the opportunity, or the scale of the transformation—in mindsets and approaches, capabilities and skills—that will be required to embed the industry at the heart of the transition to a more sustainable economy. [See Corporate Governance for Sustainability Needed for a Green Economy] Foremost amongst the challenges will be creating a compelling business case for investment in sustainability, from cost savings through efficiency initiatives to new revenue streams opened through innovation.
    The Numbers: 81% of communications CEOs believe that sustainability issues will be 'important' or 'very important' to the future success of their business. 81% of communications CEOs believe that sustainability issues should be fully integrated into the strategy and operations of a company. 70% of communications CEOs cite 'brand, trust and reputation' and 'potential for revenue growth and cost reduction' as among their top three factors driving them to take action on sustainability issues. 81% of communications CEOs believe that companies should integrate sustainability through their supply chain; only 48% believe that their company has done so.
  • Consumer Goods - The increased complexity of sustainability issues and more diffuse networks through which they will have to be managed will take businesses into new, often unfamiliar terrain. CEOs in the consumer goods sector believe, however, that this is a future where the role of business, in the consumer goods sector and beyond, will be integral to development. In the words of Gareth Penny, Group CEO of De Beers, "Successful business is what drives sustainable growth."A new era of sustainability is far from guaranteed and will require both leadership and urgency. As Paul Polman, CEO of Unilever, warned: "If you run a business for the long term, sometimes you have to overcome some short term hurdles. I always say that you cannot climb a mountain if it is a smooth surface: tradeoffs are often used as excuses not to do things."
    The Numbers: 98% of consumer goods CEOs believe that sustainability issues will be critical to the future success of their business. 97% of consumer goods CEOs believe that sustainability issues should be fully integrated into the strategy and operations of a company. 79% of consumer goods CEOs cite 'brand, trust and reputation' as one of the top three factors driving them to take action on sustainability issues. 92% of consumer goods CEOs believe that companies should integrate sustainability through their supply chain; only 59% believe that their company has. - Read more
  • Energy - As leading energy companies seek to shape the transition towards a future energy system and a more sustainable industry, the challenges will be both pressing and complex. Securing future competitiveness will depend not only on traditional factors such as efficiency and cost control, but on forging new, more collaborative relationships with customers, governments, regulators and other stakeholders, to address new waves of demand while managing environmental and social impacts.
    The Numbers: 94% of CEOs in the energy industry believe that sustainability issues will be critical to the future success of their business. 96% of CEOs in the energy industry believe that sustainability issues should be fully integrated into the strategy and operations of a company. 70% of CEOs in the energy industry cite 'brand, trust and reputation' as one of the top three factors driving them to take action on sustainability issues. 94% of CEOs in the energy industry believe that companies should integrate sustainability through their supply chain; only 57% believe that their company. 91% of CEOs in the energy industry report that their company will employ new technologies to address sustainability issues over the next five years. - Read more
  • Infrastructure & Transportation - Rising demand for a more sustainable urban environment and transport infrastructure is changing the nature of demand for companies in the infrastructure and transportation industry. As leading companies look to grow in the emerging markets while strengthening their domestic position, the effective management of social, environmental and governance issues is becoming a critical factor in determining success. If new opportunities are properly harnessed through new products and services that help public authorities and private enterprise match their ambitions with execution, the opportunities are immense.
    The Numbers: 89% of I&TS CEOs believe that sustainability issues will be critical to the future success of their business.93% of I&TS CEOs believe that sustainability issues should be fully integrated into the strategy and operations of a company. 71% of I&TS CEOs cite 'brand, trust and reputation' as one of the top three factors driving them to take action on sustainability issues.84% of I&TS CEOs believe that companies should integrate sustainability through their supply chain; only 50% believe that their company has done so. - Read more
  • Utilities - Government pressure, regulatory requirements, resource scarcity and commodity volatility all present a challenging operating environment for utilities companies, but new waves of investment in advanced technologies, smart infrastructure and Intelligent Cities present new opportunities for those companies able to master the new dynamics of the industry.
    The Numbers: 92% of utilities CEOs believe that sustainability issues will be important to the future success of their business. 88% of utilities CEOs believe that sustainability issues should be fully integrated into the strategy and operations of a company. 56% of utilities CEOs cite 'brand, trust and reputation' as one of the top three factors driving them to take action on sustainability issues. 84% of utilities CEOs believe that companies should integrate sustainability through their supply chain; only 64% believe that their company has. - Read more

The industry analysis shows that some sectors may be ahead of the pack when it comes to integrating sustainability into core business. For example, 80% of utilities CEOs report their company has embedded metrics to track sustainability performance, ahead of the cross-industry average of 64 percent. Similarly, 83 % of CEOs in the energy sector, and 81 % of those in infrastructure say their company measures both positive and negative impacts of their activities on sustainability outcomes, a finding which suggests sustainability performance management capabilities are beginning to take root in leading industries.

"Insights from the study have helped us to understand the executive business lens for sustainability across industries," said Peter Lacy, Managing Director, Accenture Sustainability Services for Europe, Middle East, Africa and Latin America and the overall study lead. "Most importantly, we heard from a growing number of CEOs that sustainability is becoming part of their innovation and growth agenda. That may not be new for certain well-known companies, but it marks a significant departure to see this more widespread across industries. There are many challenges ahead—and legitimate questions about scale and real impact—but we're starting to see signs of high performing businesses aligning sustainability with the top line."

Nevertheless, performance gaps remain between CEOs' ambition and execution. Ninety-five % of automotive executives, for example, believe that companies should invest in enhanced training of managers to integrate sustainability into strategy and operations, but just 52 % report that their company already does so.

"Much more remains to be done to help companies turn sustainability goals into action," said Georg Kell, Executive Director of the UN Global Compact. "CEOs clearly see the need to instill sustainability at all levels and roles within organizations, and this unprecedented level of data and analysis will enable us to help them on their journey to truly embedded long-term sustainability."

Add New Comment

0 Comments