The first quarter of 2012 has come to an end, meaning the release of surveys and other studies of sustainability in 2011. The MIT Sloan Management Review Report was recently released, and according to their survey, corporate sustainability programs grew markedly in 2011.
About 70 percent of nearly 3,000 executives surveyed said that sustainability was on the management agenda in 2011 and will probably remain so permanently. Two-thirds of those managers surveyed said that sustainability-related strategies are not just “nice” or even adding on to profit, but are necessary to stay competitive. Twenty-four percent of those surveyed meet their criteria of “embracers,” companies that have incorporated sustainability in the management agenda, have a business case for sustainability within their company, and feel that sustainability is necessary to stay competitive. About 31 percent of those surveyed meet their criteria of “Harvesters,” companies that have begun a sustainability program and realize the business case, but have not made it a far-reaching or permanent part of the culture.
What is especially telling are the corporate motivators to become more sustainable. The factor that was said to be the greatest motivator is the belief of customer preference for sustainable products and services (41 percent of those surveyed). Political pressure (35 percent) was next, followed by resource scarcity/price volatility (30 percent), competitors’ sustainability programs (28 percent), and stricter requirements from customers along value chain (26 percent).
A study by McKinsey & Company (“Energy efficiency: A compelling global resource”) shows that energy efficiency is particularly profitable. Their study shows that proper energy efficiency programs will generate an average internal rate of return of about 17 percent and would result in meeting a significant percentage of the greenhouse gas emission reductions needed to meet Kyoto Protocol targets. If just these profits were reinvested into other strategies, then total Kyoto goals can be met at no net cost. These days, a 17 percent return on investment is too good to ignore. This study of a major business management firm and additional studies prove that being more sustainable is not a cost sink and is not a theoretical exercise, but, intelligently approached, improves the bottom line of business and society as a whole, while driving further growth.
Marc Karell is the owner of Climate Change & Environmental Services. Read more useful material in the company’s blog: www.CCESworld.com/blog. CCES technical advisors can help you start a sustainability program from scratch or to move it along more smoothly to implement feasible projects to generate direct business benefits for your company and your stakeholders. Others are doing it. Contact us now.