Chief executives recognize the importance of measuring businesses’ whole footprint — environmental, social, fiscal and economic — but most companies still only measure and report on their financial performance, according to PwC’s 17th Annual CEO Survey.
The survey found 75 percent of participants agree that satisfying societal needs beyond those of investors, customers and employees, and protecting the interests of future generations, is important to their business.
Seventy-four percent agree that measuring and reporting their total (non-financial) impacts contributes to their long-term success and 68 percent agree that the purpose of business is to balance the interests of all stakeholders.
And yet the PwC report cites a study by the United Nations High-Level Panel on the post-2015 development agenda that says only about a quarter of large companies currently report on their social and environmental impact.
According to PwC, measuring a company’s whole footprint shows management the full impact it’s making and despite the challenges, quantifying an organization’s footprint in a common business language has two major benefits. It helps management understand the trade-offs between different strategies and make the best decisions for all its stakeholders. That, in turn, helps the organization earn more trust, more customers and more profit.
A September 2013 survey by PwC echoed these findings. It suggested the era of growth at any cost is over with the majority of CEOs agreeing their company’s environmental and social impacts should be measured alongside financial data. The survey found 93 percent of CEOs believe measuring their organization’s total impact could help them make better decisions about business risk and build a stronger reputation with employees, investors and regulators, than using financial measures alone.