When corporate executives talk about "Sustainability," they mean taking long-term responsibility for the environment and society. It is a combination of corporate social responsibility and environmental responsibility. A new report, titled "Sustainability Nears a Tipping Point," tells us that sustainability is increasingly important to bottom line profits.
In fact, this new global study finds that more than two-thirds of companies have placed sustainability "permanently on their management agenda." The analysis found that two-thirds of companies see sustainability as necessary to being competitive in today’s marketplace, up from 55 percent a year earlier. Moreover, two-thirds of respondents said management attention to, and investment in sustainability has increased in the past year.
Recently released by MIT Sloan Management Review and the Boston Consulting Group, the study focuses on those companies it calls "Harvesters" – the 31 percent saying that sustainability contributes to their profits. Harvesters do not merely implement individual initiatives, like reducing carbon emissions; they are changing their entire way of doing business.
"Further study of the Harvesters will refine where the true tipping point is, when the management focus on sustainability will rival that of marketing or human resources or other key drivers of performance," said David Kiron, a co-author of the report.
Compared to non-Harvesters, Harvesters tend to have a more distinctive cultural mind-set and design that supports sustainability. They are also three times as likely to have a written business case for sustainability. In addition, Harvesters are 50 percent more likely to have a person responsible for sustainability in each business unit. Harvester managers often have the support of a separate, cross-functional, senior management committee to approve initiatives.
Operationally, we see greater collaboration among Harvester business units as well as customers and suppliers, compared to other companies. Companies that have focused on sustainability and had it actively on their agendas for years are finally seeing reaping the rewards. Right now, Harvesters represent only about a third of companies. Expect that number to grow exponentially, as more companies recognize the value to their candidates, employees and customers, as well as their suppliers and society at-large. Clearly, for wise companies, as a corporate goal, sustainability is here to stay.
