OR WAIT 15 SECS
Patricia Van Arnum was executive editor of Pharmaceutical Technology.
A recently released study by Accenture shows that sustainability is becoming an increasingly important part of the strategies and operations of companies.
In June 2010, the management consulting firm Accenture released the results of a study on sustainability, which surveyed 766 CEOs globally.The study, A New Era of Sustainability: UN Global Compact-Accenture CEO Study 2010. was conducted in cooperation with the UN Global Compact, a corporate-social-responsibility initiative facilitated by the United Nations. The study gained feedback from CEOs on the importance of sustainability to their businesses and the barriers to and facilitators of implementing sustainability in their companies.
The key finding was that a large majority, 93% of CEOs, said that sustainability is critical to the future success of their companies. On a more immediate basis, 80% of CEOs say the recent economic downturn has raised the importance of sustainability as a potential engine of growth for the economy as a whole or for their businesses. Other key findings on the relationship between sustainability and the recent economic downturn are as follows:
• 83% said the economic crisis elevated the role of sustainability and ethics in building trust in business
• 80% said the downturn raised the importance of sustainability as a leadership issue for top management
• 77% said the downturn led them to take a longer-term view of business and the role of sustainability.
The importance of sustainability in company strategy is growing. In a similar survey conducted in 2007, 50% of the CEO respondents said that sustainability issues had become part of their companies’ strategy and operations. In the 2010 survey, that number increased to 81%. According to the survey findings, three corporate attributes (brand, trust, and reputation) were by far the primary considerations CEOs cited for acting on sustainability.  They were identified by 72% of the respondents as one of their biggest motivators, followed in descending order by: the potential for revenue growth and cost reduction (cited by 44%), personal motivation (cited by 42%), consumer and customer demand (cited by 39%), and employee engagement and retention (cited by 31%).
Although reporting progress in reaching their sustainability goals, the CEOs surveyed in the study pointed to several barriers. These barriers included the following:
• The complexity of implementing strategy across business functions (cited by 49%)
• Competing strategic priorities (cited by 48%)
• Lack of recognition from financial markets (cited by 34%).
CEO respondents also pointed to several conditions that they felt need to be in place before sustainability is fully integrated into their business operations. These included the following:
• Shaping consumer tastes to build a stronger market for sustainable products
• Training management and employees to deal with sustainability issues
• Communicating with investors to create a better understanding of the impact of sustainability
• Measuring performance on sustainability and explaining the value of business in society
• Working with governments to shape clearer regulation and create a level playing field.
Although CEOs recognized the value of sustainability in their business, less than half said that sustainability was discussed with financial analysts and the investment community. Additional survey findings showed that education and climate change were identified by the CEO respondents as the “big issues” they face, with resource scarcity and health starting to emerge as crucial issues. Education was identified by 72% of the respondents as the most important development issue for the future success of their business, followed by climate change at 66%. Ninety-one percent of CEOs said their companies would use new technologies to address sustainability issues during the next five years such as by developing renewable energy and creating greater energy efficiency. Seventy-eight percent of the respondents said that companies should engage in collaboration with a variety of stakeholders to address sustainability issues such as through partnerships with suppliers, nongovernmental organizations, and governments.
“It is clear from the survey results that global business has its work cut out in order to build sustainability programs that become key components of a company’s core business,” said Peter Lacy, who led the study and is the managing director of sustainability services for Europe, Africa, and Latin America, at Accenture in an Accenture press release. “If sustainability does become fully integrated into global businesses within the next decade, the regulatory, technology, investment. and consumer changes required will be staggering, creating significant winners and losers across businesses and industries. However, it’s great to see that some progress is being made, and that the movement toward a more sustainable economy and business context is clearly gaining momentum.”