Corporate change is hard, and one study shows that sustainability change is even harder: companies surveyed by Bain & Company indicated that they are achieving or exceeding just 4% of their sustainability goals (compared to the 12% of goals they are achieving in general corporate change). Still, the numbers are improving. In 2015, companies said they were meeting or exceeding just 2% of their goals, according to Bain & Company’s new report based on a survey of 297 global companies.
Nearly Half Miss the Mark…
Sustainability initiatives often fail to achieve the expected results: 47% of sustainability programs are considered failures by companies. And that number has more than doubled from the percentage that were considered failures in 2015.
That may, in fact, be good news for building a sustainable economy: “This could be evidence that companies are taking the issue seriously, and therefor more scrupulously measuring progress and acknowledging that advances are insufficient,” Bain & Company says.
Despite failures, companies are taking sustainability seriously. Eighty-one percent said sustainability is more important to their business today than it was five years ago, and 85% believe it will be even more important in another five years. Overwhelmingly, companies are also recognizing that more needs to be done or the current trajectory will have immense human and financial costs, with 99% believing we need to either maintain a fast pace of progress or step it up even more.
…But Sustainability Progress Is Happening
Increasingly, business leaders are taking a transformational approach to goal setting by looking to the future. “They will create a vision of what their future will look like in a truly sustainable economy and then craft an objective to fit that vision,” the report author writes.
The report predicts that companies that have adopted a truly transformative sustainability aspiration will nearly triple over the next five years, growing from 9% to 26%.
Tech, Tech, and More Tech
As companies and studies have demonstrated, the technology that will help companies achieve their sustainability goals is being created – and implemented – at a rapid pace. Top business leaders will seek and seize opportunities to use advanced technology to intensify their efforts while achieving competitive advantage.
Rapid advances are putting game-changing tools within the hands of organizations, with success often following.
“For instance, when Google applied artificial intelligence (AI) to optimize data-center energy efficiency, it reduced the amount of energy used for cooling by 40%,” according to the report. “Apple uses Daisy, a recycling robot, to disassemble and sort used iPhones. Meanwhile, Walmart, IBM and others formed the Blockchain Food Safety Alliance to improve supply chain traceability in China.”
Improving their value proposition in terms of their customers will also be vital for companies as the consumers who are demanding sustainability moves from a niche market to the mainstream. “Over the next five years, customer loyalty and revenue generation will replace public reputation and cost savings as the primary drivers for sustainability action among leaders,” according to the survey.
While companies face the challenge of convincing customers to pay more for sustainable goods, they are slowly making sustainability part of a holistic value proposition, pinpointing attractive product attributes like customer service or performance and price savings.
Photo credit: Bain & Company, Transforming Business for a Sustainable Economy