Written by fe Bureaus | Updated: Dec 31 2009, 04:59am hrs
Sustainability issues

In the annual Business of Sustainability Survey by MIT Sloan Management Review, a number of thought leaders share the belief that the economic downturn has accelerated a shift towards a greater corporate focus on sustainability, particularly towards related actions that have an immediate impact on the bottom line. In the survey where more than 1,500 top global executives participated, there is a strong consensus that sustainability is having and will continue to have a material impact on how companies think and act, as more than 92% respondents said that their company was addressing sustainability issues in some way. And just one-fourth said their companies have reduced sustainability commitments during the downturn.

Respondents strongly believed in the importance of engaging suppliers across the value chain 62% of them considered it necessary to hold suppliers to specific sustainability criteria. Moreover, there was a high correlation between the depth of a business leaders experience with sustainability and the drivers and benefits that they perceived, suggesting that the more people know about sustainability, the more thoughtfully they evaluate it and the more opportunity they see in it.

Government legislation on sustainability-related issues had the greatest impact on their business. Three out of four respondents said that this issue had a significant impact on how their organisation was approaching sustainability. Many corporate leaders said their companies had played a role in shaping the regulatory framework rather than simply reacting to it.

On why companies struggle in their efforts to develop the business case for sustainability, respondents underlined three main challenges. The first is forecasting and planning beyond the one-to-five-year time horizon typical of most investment frameworks. The second challenge is gauging the system-wide effects of sustainability investments and the third important challenge is planning amid high uncertainty, which includes potential changes in regulation and customer preferences.