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Susainability Leaders

Which Companies Lead at Integrating Sustainability into Business Strategies?

Susainability LeadersUnilever does the best job integrating sustainability into its business strategy, a position the company has held for the past six years, according to a survey by global consultancies GlobeScan and SustainAbility.

This year’s survey, which interviewed more than 900 sustainability executives, consultants, academics and government officials, also finds that respondents expect corporations to play an equal role to government in advancing sustainability, especially in regards to the UN’s Sustainable Development Goals.

Four in 10 respondents — or 43 percent, up five points from 2015 — named Unilever as the no. 1 sustainability leader, according to the annual Sustainability Leaders Survey, conducted in partnership with Sustainable Brands.

The questions and survey didn’t define “sustainability,” and instead left it up to the respondents’ interpretations. But, according to a GlobeScan spokesperson, the sustainability experts who responded to the survey understand the term to at least apply to environmental, social and economic sustainability.

Patagonia (in second position at 17 percent, up six points), Interface (tied for third with 10 percent, up two points) and Ikea (tied for third position at 10 percent with an increase of five points) received more endorsements this year.

Tesla, which is the only new entrant within the list of the top 13, also saw a boost in its reputation for sustainability and is tied for fifth position along with Nestlé, Natura and Marks & Spencer, all at 6 percent respectively.

GlobeScan director Eric Whan told Environmental Leader the takeaway for companies is two-fold.

“First, sustainability experts hold hope for private sector leadership on this agenda, particularly around the essential ambition of achieving the Sustainable Development Goals,” Whan said. “At the same time though, few companies are breaking through barriers to become recognized and capture the reputational value that comes with that. Second, no other company has yet managed to challenge Unilever’s leadership, commitment and effective integration of sustainability into their business strategy.”

The Sustainability Leaders Survey has been tracking expert opinions on the evolution of the sustainability agenda for two decades. This is the first edition of the survey since the adoption of the Sustainable Development Goals and the Paris Agreement on climate change in late 2015.

While expectations for corporations’ sustainability efforts have been increasing year over year, according to the survey, this year’s report finds that respondents expect corporations to play an equal role to governments.

“Sustainability experts now believe that national governments and the private sector must take equal responsibility for advancing sustainable development over the next two decades, with 34 percent of experts rating each as vital to progress,” said Mark Lee, executive director at SustainAbility. “Expectations for governments to lead have gradually decreased in recent years, while those for the private sector have been rising.”

This played out in Paris at COP21, with businesses playing a leading role in advocating for a climate agreement and making their own commitments to reduce carbon pollution. They are seeing the business benefits of climate action as well. Unilever, for example, says about half of its growth last year came from its “sustainable living” brands, which grew 30 percent faster than the rest of the company’s business. In the company’s other sustainability efforts, Unilever has said achieving zero-waste has contributed about $227 million in cost-benefits to the company.

Whan says the survey’s findings are “proof” that companies can improve their environmental sustainability while growing their business. Some of the steps they are taking include procuring renewable energy, putting an internal price on carbon and implementing land-use practices that conserve natural resources, among other actions.

An April report published by the We Mean Business coalition found that companies taking steps to mitigate climate change accrue an internal rate of return above average — close to 27 percent. Unilever, Ikea and Marks & Spencer are all members of the We Mean Business coalition, and recognized as being the most sustainable, according to the Sustainability Leaders Survey.

“The companies that are awarded with recognition in our study are also succeeding financially, growing their businesses, and offering great case studies to others,” Whan said. “This is all tremendously rewarding to their teams, which helps sustain their commitment. For a growing number of experts, the question is no longer whether companies say the right things about sustainability, but how they integrate environmental purpose into their core business.”

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