When surveying the corporate landscape in the context of sustainability, a new study found that companies largely fall into two camps.
In one group are those that see sustainability through a narrow lens focused on risk management and efficiency. The other is dominated by the growing number of companies taking a long view of sustainability, seeing it as a core strategy that enables long-term business growth and creates a range of intangible advantages.
Across the board, nearly 60 percent of companies revealed that despite the recession, sustainability investments actually grew in 2010, according to the second annual global sustainability study from the MIT Sloan Management Review (MIT SMR) and The Boston Consulting Group. About two-thirds of companies in the second group, the so-called "embracers," believe these kinds of sustainability investments are paying off and boosting their profits.
"What's fascinating is that our findings depict a business landscape in general that's tilting hard toward where the embracers already are," Michael Hopkins, MIT SMR editor-in-chief and report co-author, said in a statement. "So the embracers have handed us a kind of crystal ball. Their insights and behaviors suggest a blueprint for how management practice and competitive strategy will evolve."
The embracers share some common traits: They tend to be large and resource intensive. They believe sustainability offers a competitive advantage and can help a company earn their license to operate. Embracers are both early movers and long-term thinkers that balance a broad perspective that takes in a distant horizon with an immediate focus on short-term results. Sustainability is driven from the top, bottom and integrated across the company.
Embracers put stock in sustainability's intangible benefits, but also measure and assess everything. Along the way, they strive to be authentic and transparent about their efforts.
"These companies are measuring sustainability commitments in the way they would any other investment," the report said. "They are setting realistic goals expectations for the return on those investments. And yet by heading down one path -- by taking that leap of faith -- they are finding unexpected benefits emerge. Employees are more engaged in meeting environmental goals than had been anticipated. Brand value is enhanced, often in unexpected ways."
Most companies in the survey cited brand-building and reputation enhancement as sustainability's chief benefit. But its role in competitiveness is also significant, especially in some industries. For example, some 80 percent of respondents said sustainability is critical to helping companies in the automotive sector compete.
Image CC licensed by Flickr user jumpyjodes.
This report highlights
This report highlights similar traits between innovative 'first mover' companies and followers related to a Capgemini and Aberdeen Research study that that I wrote about just yesterday - Surveys Lift the Lid on Innovation & Sustainable Supply Chain Management, Uncovering Value & Leadership Traits http://bit.ly/h941Jb.
The results also compare well with Peter Senges and Bob Willards remarks in several of their books, showing the development phases in organizations toward a sustainability culture, governance and business strategy. As leading organizations implement more efficient, less resource intensive and wasteful practices, they quickly realize direct and indirect financial and brand benefits. They 'embrace' this new paradigm as part of organizational 'core values' as successes rack up...its like a snowball effect. This tends to widen the chasm between the leaders and followers, who in turn have to spend much more to play catch up.
Reports like this are great to see and underscores what I have been practicing with my clients for decades. Thanks to MIT and the BCG for this timely report. Even business manager should read this and use it to make a strong business case in favor of sustainability.
Dave Meyer
SEEDS Global Alliance