Sustainability: Reports Show Greater AcceptanceJun 19th, 2012 | By Marc Karell | Category: Sustainability
The number of corporate sustainability programs grew markedly in 2011 according to Sustainability Nears a Tipping Point, a report released recently by the Massachusetts Institute of Technology (MIT) Sloan Management Review. According to the report, about 70 percent of the nearly 3,000 executives who were surveyed said that sustainability was on their management agenda in 2011 and will probably remain there permanently. In fact, two-thirds of the managers who were surveyed stated that sustainability-related strategies are required to stay competitive.
Twenty-four percent of the survey participants’ companies were classified in the report as sustainability “embracers,” companies that
- have incorporated sustainability into their management agenda
- have made a business case for sustainability within their company
- feel that sustainability is necessary to stay competitive
About 31 percent of survey respondents were classified as working for sustainability “harvesters,” companies that have begun a sustainability program and realize the business case but have not made sustainability a far-reaching or permanent part of their culture.
What is especially telling are the motivating factors that companies cited to become more sustainable. The factor that was said to be the greatest driver is the belief that customers increasingly prefer sustainable products and services (41 percent of those surveyed). Political pressure (35 percent) was next, followed by resource scarcity and price volatility (30 percent), competitors’ sustainability programs (28 percent), and stricter requirements from customers (26 percent).
The economic benefits of sustainability have also been evaluated in several studies conducted by McKinsey & Company. These studies demonstrate that energy efficiency is particularly profitable. For example, one study shows that proper energy efficiency programs could generate an average internal rate of return of about 17 percent while providing a significant percentage of the greenhouse gas emission reductions needed to meet Kyoto Protocol targets. If the profit generated from these investments were reinvested into other, less-profitable reduction strategies, then total Kyoto goals could be met at no net cost. These days a 17 percent return on investment is too good to ignore. This is not an environmental group talking, but a leading global business management firm.
The results of these and other studies prove that being more sustainable is not a cost sink but an opportunity to improve the bottom line of a business while protecting society as a whole, driving further economic growth.
About the Author
Marc Karell, P.E., CEM, is the owner of Climate Change & Environmental Services, LLC (CCES), a consulting firm specializing in air pollution, climate change, sustainability, and energy services for a wide variety of industrial and corporate clients. CCES and its technical experts develop successful sustainability strategies and greenhouse gas emission reduction programs for companies, buildings, and institutions. Strategies are determined and implemented to create maximum economic benefits and a healthy return on investment.
Photograph: Flower Macro 4 by Dave Dyet, Cambridge, Ontario, Canada.