Sustainability gulf emerging between companies

11% of businesses only consider sustainability at board level once a year, survey finds

A wide gap is emerging between companies acting on sustainability and those falling behind, a study has found, but more than half of businesses say too much data is hampering their efforts.

The study, from innovation consultancy Designit, is based on 1,000 online interviews with sustainability professionals with an influence on, or responsibility or accountability for, sustainability, ESG or corporate responsibility within their organisation.

It found in the worst cases, 11% of international businesses consider the issue at board level only once each year.

This compares to those companies deemed ‘leaders’ in sustainability that constantly review their strategies, with 78% always including it on their quarterly boardroom agendas.

The most advanced businesses in terms of sustainability are much better at partnering and collaborating for greater value.

These businesses experience more benefits for their efforts, and reference profitability as a driver for sustainability almost twice as much as the least advanced businesses (70% and 38%, respectively).

Leadership is a key difference between sustainability leader and laggard companies, the survey found.

CEOs at leaders businesses are 50% more likely to have ultimate responsibility for sustainability.

Meanwhile, laggards are twice as likely to allocate ultimate responsibility to someone in a corporate social responsibility role.

Barriers to progress

However, many businesses reported facing hurdles to progress in their sustainability efforts.

Half (49%) of all businesses state having too much data to make sense of, or not having the right data, is the biggest single barrier to sustainability. The figure is more pronounced for ‘leader’ businesses than ‘laggards’ (58% vs 43%).

Meanwhile, more than half (54%) of all businesses have difficulty in integrating sustainability innovation into products, and on average they spend only 4% of their revenue on sustainable practices.

The majority of companies (63%) state rising costs are the biggest external barrier to sustainability.

But unclear government guidelines are also rated as one of the most challenging roadblocks (47%), alongside geopolitical instability (43%), and technological constraints (42%).

Miguel Sabel Pereira, Designit’s European head of sustainability, said: “Our findings show that all businesses, no matter where they stand on the road to improved environmental practices, face multiple internal and external challenges.”

The study’s findings also found all companies leading in sustainability consider themselves to be purpose-led, but they are more likely to be headquartered in Europe.

Purpose-driven leaders’ desire to do good also extends far beyond their own organisation. They proactively develop industry standardised practices and approaches to tackling carbon emissions.

Eight in 10 will even go as far as collaborating with other companies in their industry to solve the world’s most pressing sustainability problems.

Sabel Pereira added: “Our research shows how hard it can be for many businesses to turn ambition into progress on sustainability. Yet crucially, it also shows what the most advanced businesses are doing, and what effective corporate behaviours look like in a way that those trailing behind can adopt.”