Global Leaders Debate: The Sustainable Organization—Setting the Agenda for Business Sustainability

Sustainability has become an imperative for business. There is substantial and consistent evidence supporting this fact.  However, no one set of individuals or organizations will be able to come up with solutions that can work at local, national and global levels. Instead, collaborative, multidisciplinary approaches are needed, accompanied by innovative technologies or applications and new ways of doing business.

This report reflects the opinions of 53 executives and experts from Accenture’s 2012 Sustainability 24 debate, as well as the collective views of a large number of global thought leaders across industry, civil society and government, to capture the latest thinking on sustainability. It explores three themes:

• Sustainable strategies, innovation and business models.

• Sustainability and operational excellence, including supply chain and sustainable consumption.

• Energy and resource optimization.

As sustainability pilots and innovative programs proliferate, and organizations make progress with resource efficiency, the global footprint of human activity continues to expand. Moreover, with many economies struggling to emerge from recession, the growth imperative often appears to run counter to many sustainability goals.

These factors have important implications and it is now time for leaders to take a long, hard look at how to turn good intentions regarding sustainability, into scalable programs that deliver tangible and deep transformational results, especially when it comes to business strategy, operational models, resource management and energy consumption.

Accenture’s 2012 research, Long-Term Growth, Short-Term Differentiation and Profits from Sustainable Products and Services, polled 250 leading executives and found that more than three out of four (78 percent) now believe sustainability plays a “vital” role in the future growth of their businesses, while 83 percent see expenditure on sustainability as an investment, rather than an additional cost burden.  

• From pilots to transformation—Companies need to assess which programs are having an impact and scale those into business solutions for the whole business. Business sustainability should not be seen as a constraint, but as a mechanism for growth, cost savings and innovation.

• Sustainability is good practice for better results—Companies prepared to set long-term sustainability practices typically pay off with superior risk-adjusted returns and lower cost of capital.

• Tap into developmental goals for innovation and market access—Make use of development strategies as a source of experimentation and innovation within the business.

• Sustainable business growth is achievable without solely focusing on increased consumer consumption and related escalating resource demands.

• The supply chain is the primary driver for implementation of sustainability practices in companies.

• Transparency and integration come to the fore—Reporting needs to go beyond compliance and disclosure, it should be used to drive improved operational performance, innovation and cost-savings across the business.

• Sustainability is demanding new kinds of management skills—Tomorrow’s leaders will need new skills and capabilities to grapple with business sustainability, including the capacity for lateral thinking, cross-functional innovation and creative thinking. They also need the ability to collaborate widely, and with a range of stakeholders.

• Technology is part of the solution, even though it is not yet clear which part—Across a range of industries, a diverse portfolio of technologies will need to be designed and developed to tackle the sustainability challenges of the future.

• Cities are both part of the problem and a source of solutions—Cities are already responsible for 70 percent of global carbon emissions, but they can also act as test beds for new ideas and approaches to urban sustainability.

• Cleaner energy, greater energy efficiency and improved energy access are key.

A striking shift is taking place in corporate attitudes to sustainability. In a global survey of business executives across eight countries ahead of the Sustainability 24 global leaders debate, Accenture found that while nine of 10 executives say sustainability is either “critical” or “very important” to their business, the reasons for believing these are changing. Companies are starting to go beyond traditional motives such as compliance or reputation.

Instead, consumer expectations (selected by 62 percent of respondents) and business growth (60 percent) are becoming key considerations. This is a striking contrast to the conclusions of the 2010 survey of 800 chief executives, conducted with the United Nations Global Compact. Then, the main driver of sustainability was brand and reputation. Today, sustainable growth tops the agenda, with many more executives seeing sustainability initiatives as investments rather than costs.

Turning such investments into revenues is not easy—close to six in 10 (56 percent) said it was more expensive to operate as a sustainable business, while few are succeeding in generating sufficient returns. Furthermore, nearly half said margins were lower on sustainable products and services, with a similar proportion affirming that customers remain unwilling to pay higher prices for these products and services.

Even so, when companies look ahead, they are optimistic. Many see a demand for sustainable products and services as likely to grow and are responding by adding new product lines and promoting their sustainability credentials.

Setting the agenda for effective business sustainability calls for bold leadership, and will require businesses to re-think traditional commercial practices and develop innovative and scalable sustainability solutions that foster human development, conserve natural resources and drive profitability:

• Business should look for opportunities to collaborate with a broad range of non-traditional partners, including other corporations, non-governmental organizations, civil society groups and governments.

• Educate consumers on the availability of products and services, as well as on the consumers’ role in supporting sustainable business practices.

• Ensure the correct mixture of regulation, the creation of messages and incentives that encourage consumers to do the right thing.

• The availability of products and services that are environmentally sustainable in their production and distribution: the entire value chain is at stake.