Harnessing sustainability: hearing the voice of the CEO
Having just returned from Davos, where the uncertain economic outlook was preoccupying delegates, it surprised me just how many were talking about sustainability as a growing imperative despite -- or perhaps because of -- the gloomy business environment in many parts of the world.
It was fitting that it was at Davos that the United Nations Global Compact and Accenture launched their third tri-annual CEO study on sustainability, appealing to the world’s business leaders to participate in what is sure to provide valuable insights on business commitment and concerns about the topic. This year’s study will examine three key themes: the business case for sustainability, the globalization of sustainability innovation and moving beyond today’s incremental approach to sustainability.
In Accenture's 2010 study, it was clear that CEOs were just beginning to pin down ways to assess the value that sustainability was generating in their business. Three years on, we see business leaders in every industry grappling with the same questions: How to measure, track and communicate their performance on sustainability, how to tie their performance to traditional measures of business value and how to communicate these links to investors and other stakeholders.
By examining how real CEOs are wrestling with real issues, we will be able to go beyond the theoretical understanding of sustainability and business value to get a better handle on how we can remove some of the barriers to investment in sustainability -- and align market incentives with sustainable development.
Globalization of sustainability innovation
This week, one business leader told me that sustainability has often been a “north-south” dialogue, with the big western economies doing much of the talking. But as I work with clients from my new home in Shanghai, it’s clearer than ever that much of the real innovation is coming from the south and east.
With high-growth markets in Asia, Africa and Latin America fast becoming the powerhouses of the global economy, it is evident that sustainability is becoming an irresistible force for innovation and growth. China was responsible for almost one-fifth of total global investment in renewable energy last year, and this investment is providing an impetus for innovation unmatched in the West. It’s equally clear that the sustainability innovation that is at the heart of the growth strategies of big companies in these emerging economies will drive the way the world thinks about sustainability in the coming decade.
Moving beyond incrementalism
But one of the biggest challenges that the new research will explore is how we can move beyond incrementalism and begin to harness sustainability as a transformative force in the global economy. Our interviews with CEOs have uncovered game-changing examples of sustainability permeating corporate strategies, operations and supply chains in a way that would have been unthinkable even five years ago.
Among the outstanding examples:
- The GreenTouch initiative, a global consortium that aims to increase efficiency across communications and data networks by a factor of 1,000 from current levels.
- China’s Esquel Group, which in partnership with Danish biotech innovator Novozymes, is using enzymes found in nature to achieve dramatic reductions in water use and CO2 emissions.
- New Hampshire-based outdoor-clothing specialist Timberland’s “Designing for Disassembly” program encourages buyers of Timberland’s Earthkeepers boots to return them to the company at the end of the product’s life. Timberland then recycles the boots so that most of their parts can be used for new shoes.
We’d be wrong to think that these innovations represent a “new normal.” Many other initiatives suffer from “pilot paralysis,” and they haven’t reached the scale or moved at the speed required to have a material impact. As one leading CEO told me, “We’re doing nowhere near enough, individually or collectively, to address the challenges we face.” So this year, we’ll be asking CEOs what they believe will accelerate progress: what they need to do themselves, what they can do in collaboration with others and what they will need from other actors such as consumers, investors, governments and civil society.
On a personal level, the thing that excites me most about partnering with the UN Global Compact on our third CEO Study is the opportunity that will come from giving CEOs a voice on sustainable business. That will be important both in informing UN leadership about how they can most effectively support efforts to align market forces with sustainable development. It also will contribute greatly to the global dialogue on sustainability by providing a body of knowledge that can help drive sustainable business into a transformational force in the global economy.