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Architects of a Better World—CEOs on accelerating the journey from plateau to peak on sustainability
The global economy is on the wrong track, and business is not playing its part in forging a sustainable future. This is the strong view from our study of more than 1,000 chief executive officers (CEOs) across the world: A clear majority—67 percent—do not believe business is doing enough to address global sustainability challenges.
The United Nations Global Compact is the world’s largest corporate sustainability initiative. The UN Global Compact—Accenture CEO Study on Sustainability 2013 is the world’s largest CEO study on sustainability, representing CEO perspectives on what it will take to harness sustainability as a transformative force in the global economy—helping to put in place a new global architecture for corporate sustainability.
Indeed, the CEOs see their companies stuck on a plateau of good intentions, uncertain of the way to the summit. But among sustainability business leaders, we see the beginnings of a collaborative, systems approach to sustainability, focused on the impact business can make.
These companies are seizing opportunities at speed through building skills, measuring value and performance, and improving the dialogue with consumers, investors and governments. In these innovations lie the seeds of a new approach to sustainability, with pockets of real innovation beyond the four walls of the firm collaborating within and across industries and sectors, and working closely with stakeholders to develop the beginnings of a transformational change can unlock the full potential of business in contributing to global priorities.
This is the third CEO study conducted by the UN Global Compact and the second in partnership with Accenture after A New Era of Sustainability in 2010. It involved 1,000 global CEOs from 27 industries across 103 countries and was supported by in-depth interviews of more than 75 CEOs globally.
Since the first study in 2007, sustainability has become firmly established on the leadership agenda of almost every leading business worldwide. The 2010 study investigated individual companies’ progress in integrating sustainability into core business and turning environmental, social and governance issues to business advantage.
As we approach the target year of the Millennium Development Goals in 2015, CEOs believe that we should judge progress by a different standard. There is a growing recognition that even the success currently achieved by the most advanced companies is happening within an unsustainable system.
This year, the UN Global Compact and Accenture study team set out to investigate the links between CEO attitudes and the performance of their companies against traditional business performance metrics and sustainability leadership indicators. CEOs that combine externally recognized sustainability leadership with market-leading business performance approach sustainability in markedly different ways—with different motivations, different influencers and different areas prioritized for investment, innovation and action.
Sustainability is firmly on the CEO agenda, but underlying our in-depth conversations with these leaders is a sense of frustrated ambition. Some 63 percent expect sustainability to transform their industry in five years—and 76 percent believe that embedding sustainability into core business will drive revenue growth and new opportunities. But they are constrained by market expectations.
There is growing skepticism among business leaders that addressing global sustainability challenges will ever become critical to their business success—and in turn, the CEOs appear to be refocusing on issues close to home. While 93 percent of CEOs regard sustainability as key to success, only 45 percent feel sustainability is “very important” to future success. Also, two-thirds selected “growth and employment” as top priorities to address for future business success—a reflection of the economic priorities foremost in the minds of many.
Business leaders also see a plateau effect in sustainability—and are struggling to make the business case for action. Fully 76 percent of the CEOs are satisfied with the speed and effectiveness of the execution of their company’s sustainability strategy, and nearly two-thirds believe they are doing enough to address sustainability challenges. However, more than a third—37 percent—report that the lack of a clear link to business value is a critical factor in deterring them from taking faster action on sustainability.
Marking a watershed in the progression of corporate sustainability, CEOs make an unequivocal call for greater government intervention to shape a supportive landscape for business action on sustainability. They also favor a new approach from business toward harnessing sustainability as an opportunity for innovation and growth at scale—becoming the “transformative leaders.”
Our findings may begin to lay the foundations of a deeper understanding of how companies can drive sustainability to competitive advantage. Emerging from our research, we see seven key themes developing that are enabling these transformational leaders to achieve both value creation for their companies and impact on global challenges.
Realism and context: Understanding the scale of the challenge—and the opportunity. Companies taking the most ambitious action on sustainability were also the most realistic about the scale of the challenge.
Growth and differentiation: Turning sustainability to advantage and value creation. Seeing sustainability through the lens of growth and differentiation provides an opportunity to differentiate products and services, access new market segments and expand into new regions.
Value and performance: “What gets measured gets managed.” The challenge is twofold: not just to measure and manage metrics of reduction and mitigation, but also to quantify the value of sustainability initiatives and more sustainable business models to the company, and to track their impact on the communities in which they operate.
Technology and innovation: New models for success. Environmental and resource constraints as well as growing social pressures are acting as a stimulus for innovation; leading companies are securing business advantage through innovative R&D and the deployment of technologies.
Partnerships and collaboration: New challenges, new solutions. CEOs are increasingly confident that business can lead the way and can maximize companies’ impact through close partnerships with governments, policymakers, industry peers, consumers and NGOs.
Engagement and dialogue: Broadening the conversation. In a constructive dialogue, CEOs are actively engaging consumers and local communities; regulators and policy makers; investors and shareholders; employees and labor unions, to negotiate the role of their business in addressing global challenges.
Advocacy and leadership: Shaping future systems. CEOs recognize a new need to play a part in leading collaborative solutions through advocacy and public commitment. Learn more about The UN Global Compact Accenture CEO Study on Sustainability
September 19, 2013
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