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ASEAN CEOs Remain Committed to Sustainability and are More Ready to Measure ROI than their Global Counterparts

Largest global CEO study on sustainability, by UN Global Compact and Accenture, identifies approaches that combine high performance in market leadership and sustainability

Overview

SINGAPORE; September 24, 2013 – A majority (56 percent) of chief executives in ASEAN report that sustainability issues will be very important to their future success, a figure above the global average of 45 percent. ASEAN CEOs (55 percent) are also more positive than their global counterparts (33 percent) in assessing the business contribution to global sustainability challenges, according to a survey by the United Nations Global Compact and Accenture (NYSE: ACN).

The survey also shows that while CEOs globally are struggling to quantify the business value of sustainability, over half (64 percent) of ASEAN CEOs believe they will be able to set out the strategy to profit from sustainability over the next five years, and 51 percent have already done so.

Amid evidence that ASEAN CEOs are strongly committed to embedding sustainability throughout their organisations, the vast majority now call for action to incentivise and reward sustainability leaders and unlock the full potential of the private sector.

Business leaders’ views on the private sector’s progress in addressing global sustainability challenges are detailed in the survey of 1,000 CEOs in 103 countries, including ASEAN. It is the latest triennial global poll by the UN Global Compact and Accenture, and the largest such study of top executives ever conducted on sustainability. Published in The UN Global Compact-Accenture CEO Study on Sustainability 2013: Architects of a Better World, the study also includes in depth interviews with 75 CEOs and an analysis of those companies that successfully combine sustainability leadership with market leading business performance.

As the UN Global Compact continues to see rapid growth, with almost 8,000 corporate participants, the study demonstrates broadening awareness on the part of global business of the opportunities presented by sustainability. While 76 percent of ASEAN CEOs believe that it will lead to competitive advantage in their industry, they point to a number of barriers:

  • A lack of financial resources is the leading barrier to advancing sustainability, cited by 54 percent of ASEAN CEOs, which is consistent with the belief of the CEOs globally.

  • Forty-six percent of ASEAN CEOs say that difficult operating environment has made it challenging to embed sustainability into core business, a figure significantly higher than the global average of 30 percent.

  • The third key challenge is the range of competing strategic priorities close to home such as education, employment and climate change that create obstacles to embedding sustainability at scale within their companies.

“As the CEO study reflects, the challenge at hand is to unlock the full potential of corporate sustainability to transform markets and societies around the world,” said Georg Kell Executive Director of the UN Global Compact. “With thousands of companies, from market leaders to small enterprises, committed to responsible business practices, we can see that there is enormous momentum. Now, we need policymakers, investors and consumers to send the right signals to spur the next level of corporate sustainability action, innovation and collaboration.”

A call for partnerships with governments and market intervention

CEOs around the world are demanding greater collaboration between business, governments and policymakers, according to the survey. In ASEAN, an overwhelming majority of CEOs believe that government efforts to provide an enabling environment (87 percent) as well as clearer policy and market signals to support green growth (95 percent) will be integral to the private sector’s ability to advance sustainability.

When asked which policy tools should be prioritised, CEOs globally tend to call for harder measures, but ASEAN CEOs indicate a stronger preference than their global counterparts. Seventy-four percent of ASEAN respondents (vs. 55 percent globally) point to regulation and standards and 53 percent (vs. 43 percent globally) call for governments to adjust subsidies and incentives. A further 46 percent seek intervention through taxation, a figure surpassing the global average of 31 percent. Softer measures, such information and voluntary approaches, are supported by only 18 percent of CEOs.

“CEOs’ initial optimism has given way to the belief that the constraints of market structures and incentives prevent them from embedding sustainability at the heart of their business,” Peter Lacy, the study lead from 2007 to 2013, and managing director, Accenture Sustainability and Strategy Services, Asia Pacific. “Many would now welcome government action to reshape market rules. But before taking this step, business leaders should recognise that even in today’s imperfect markets, high performing companies do manage to combine commercial and sustainable success. These companies are harnessing sustainability as an opportunity for growth, innovation and differentiation, and demonstrate that sustainable business is good business.”

High Performers in Sustainability

Using Accenture’s methodology to assess high-performing companies, the report identifies a number of approaches most likely to be taken by what the study categorises as “Transformational Leaders”, those assessed as sustainability leaders that also outperform their industry peers on traditional business metrics. These companies more readily accept that the world is not on track to meet the needs of a growing population and that business is not doing enough. They are also more committed to engaging consumers, local communities, policy makers, investors and other stakeholders. The analysis reveals that these leaders set an example for other businesses by being more likely to:

  • See sustainability as an opportunity for growth and innovation, according to 81 percent of Transformational Leaders, by accessing new markets, developing new products and services, and differentiating their offerings through superior social and environmental performance.

  • Go beyond measuring their emissions and mitigation efforts to fully quantify and track the positive value of sustainability to their company and their impact on the communities in which they operate; 81 percent of Transformational Leaders practice integrated reporting of financial and sustainable metrics.

  • Invest in innovation and deploy new technologies to advance sustainability. These include more sustainable and efficient uses of energy, data analytics to better manage resource consumption, machine-to-machine technologies and closed loop business models; 95 percent of Transformational Leaders report that they will invest in and deploy new technologies on sustainability in the next five years.

“While CEOs globally are clearly disappointed that markets have not aligned with sustainability in the way they had hoped three years, the good news is ASEAN CEOs have not lost faith in the role of business to drive sustainability and remain committed,” said Lacy. “To drive on the momentum and move from incremental to large scale transformation, businesses must accept that instead of persuading consumers about sustainability they must give them sustainable products and services they want at prices they can afford. And instead of showing investors the savings made from sustainability, the will have to demonstrate the positive business value it can generate.”

About Accenture

Accenture is a global management consulting, technology services and outsourcing company, with approximately 266,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$27.9 billion for the fiscal year ended Aug. 31, 2012. Its home page is www.accenture.com.

Learn more at: www.accenture.com/ungcstudy

Join the conversation at @actsustainably or visit accenture.com/sustainability.

About the UN Global Compact

The UN Global Compact is a call to companies everywhere to voluntarily align their operations and strategies with ten universally accepted principles in the areas of human rights, labour, environment and anti-corruption, and to take action in support of UN goals and issues. By doing so, business can help ensure that markets, commerce, technology and finance advance in ways that benefit economies and societies everywhere. Endorsed by chief executives, the UN Global Compact is a leadership platform for the development, implementation and disclosure of responsible corporate policies and practices. Launched in 2000, it is the largest corporate sustainability initiative in the world—with over 12,000 signatories from business and key stakeholder groups in 145 countries, and more than 100 Local Networks www.unglobalcompact.org.

Follow us on Twitter: @globalcompact

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