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Sustainable Products a Key Factor for Far East Businesses

vestvik-lunde, joacim, dnvSustainability is no longer of interest to big corporations only; smaller firms are just around the corner. Considerable focus on sustainability comes from Asian investors; European investors are lagging behind.

Product sustainability is becoming key for Asian businesses. This is one of the key findings from an international survey conducted by the research institute GFK Eurisko and DNV Business Assurance, on more than 2300 professionals from companies across different industries in Europe, North America, Central & South America and Asia.

Need and capability to deliver sustainable products

The strongest commitment for delivering sustainable products comes from the Far East, with 95% of respondents firmly believing it is a key factor for the successful performance of their business. About 10 percentage points more than in Europe and North America.

Sustainability is a core issue not only for medium and large companies, but for small ones too. In fact, 83% of firms employing less than 50 people feel the need to deliver sustainable products. Large companies still lead the way but, as highlighted by The Global Corporate Sustainability Report 2013 by United Nations Global Compact, smaller companies are catching up.

What respondents believe is important, and what they actually do, differs. Numbers become smaller when participants are asked if they currently sell sustainable products. Yet 80% of Asians interviewed consider some of their own products to be sustainable, 82% in China.

Key aspects for products to be sustainable

Environmental impact (94%), safe use (89%) and finance (85%) are the aspects Asians consider essential for a product to be sustainable. However, these aspects are a key concern globally, especially environmental impact, which records percentages slightly below average only in North America (88%).

Stakeholders influence

Pressure from customers (90%) is the number one reason for Far Eastern companies to deliver sustainable products. Corporate policies (83%) and final consumers (76%) come next after.  The burden is heavier in Asia than in any other region. Pressure is weaker in all other regions, especially in Central & South America.

In the Far East, sustainability is a key element also for financers. 62% of Asians and 70% of Chinese feel pushed by investors to deliver sustainable products while in the rest of the world only 1 in 2 professionals feel somewhat influenced by financiers. Sustainability isn’t central especially for investors from mature economies. In Europe, they are less influential than in any other region (39%) and they’re not that crucial to North Americans either, in fact only 43% assert to be pushed by financers to focus on sustainability. When questioned about the future, professionals from all world regions confirm that customers and corporate policies will continue to be the main drivers but they also expect a growing pressure coming from local communities (+15%), NGOs (+14%), final consumers (+13%) and regulators (+12%).

Sustainability focused actions performed by world companies

But what do companies do in order to offer more sustainable products? They take initiatives across the whole life cycle of what they make. The larger the companies, the more initiatives are undertaken and the greater the focus on consumer behavior. Nevertheless small companies are intensely working on these issues too.

Companies are engaged in a variety of actions of different kinds but to date sustainability is mostly concerned with safeguarding the environment. Once again, uptake of environmental actions is above average in the Eastern world. Asian corporations implemented initiatives aiming to reduce energy use (80%), waste (76%) and water consumption (62%) and to avoid use of hazardous substances (73%). Proportions are even higher when considering Chinese firms only. Central & South American companies too are very dynamic, while Europe and North America are a step behind.

Benefits and investment intention

Professionals from Central & South America and Asia (72% of Chinese respondents) are those who claim to have profited most from the different actions undertaken. However, 48% of people surveyed assert that benefits exceed costs.

Corporations benefited both in terms of ability to meet customer needs (46%), brand reputation enhancement (41%) and competitive advantage (31%). Central & South Americans and Asians are the most enthusiastic, while sustainability has a weaker differentiating power in Europe and North America.

Will companies keep on investing in sustainability for the future? No doubt, they will. 68% of Central & South Americans and 47% of Asians state that will invest even more than today.

“The spotlight is shining on the Far East and Asian companies are taking action. Ten years ago they wouldn’t have answered this way but today sustainable business development is a key factor for Asians to keep growing. These rising economies are making a leap towards product sustainability, overtaking Europeans and North Americans, who are distracted by the economic crisis,” says Luca Crisciotti, CEO of DNV Business Assurance.

Methodology and sample

The survey was conducted in June 2013, on a sample of about 2300 professionals who work at prominent companies from the primary, secondary and tertiary sector across different industries in Europe, North America, Central & South America and Asia.
The sample is qualitative and not statistically representative
– 25% of the firms involved employ less than 50 people, 32%  from 50 to 249 and 43% 250 and more
– Most of the companies involved belong to the manufacturing industry, particularly food (5%), chemicals (5%), metals (10%), machinery (7%) and electrical (5%)
– For approx. 63% of survey respondents, their position is directly involved in technical management, while approx. 10% are senior decision makers (CEO, COO, managing director, etc.)
The questionnaire was administered using the CAWI methodology

Luca Crisciotti is CEO of DNV Business Assurance. As of 12 September 2013, DNV and GL have merged to form DNV GL. Driven by its purpose of safeguarding life, property and the environment, DNV GL enables organizations to advance the safety and sustainability of their business. DNV GL is a leading provider of classification, certification, verification and training services.  Its origins go back to 1864, and today DNV GL operates globally in more than 100 countries with its 16,000 professionals dedicated to helping their customers make the world safer, smarter and greener.

In business assurance, DNV GL is one of the world’s leading certification bodies. We help businesses assure the performance of their organizations, products, people, facilities and supply chains through certification, verification, assessment, and training services. Partnering with our customers, we build sustainable business performance and create stakeholder trust.

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