Operating sustainably has become a
source of competitive advantage, but unlocking its
potential relies on building strong stakeholder
relationships.
New research reveals large consensus
gaps between leaders and stakeholders on
sustainability performance. This misalignment
obstructs the link between sustainability and
profitability.
Executives must strengthen their organizations’
Sustainability DNA through a three-stage cycle of
change: Diagnose, Define and Develop.
By closing consensus gaps and
operating more sustainably, businesses can deliver
greater financial value in tandem with positive
environmental and societal impact.
The health, economic and social crises of recent times
have raised people’s expectations about the role of
business in solving global problems. However, progress
against many of the United Nations’ 17 Sustainable
Development Goals (SDGs) has stalled.
Business activities are being
scrutinized like never before.
Employees
0%
believe organizations should be
responsible for leaving their people
“net better off” through work.
0%
want the flexibility to be
productive anywhere.
Consumers
0%
plan to make more sustainable or
ethical purchases over the next six
months.
0%
believe that ethical corporate
practices and values are an
important reason to choose a brand.
Investors
0%
increase in investor signatories in
2020 to the UN’s Principles for
Responsible Investment.
0%
of sustainable indices outperformed
their peer benchmarks in 2020.
Employees
0%
believe organizations should be
responsible for leaving their people
“net better off” through work.
0%
want the flexibility to be
productive anywhere.
Consumers
0%
plan to make more sustainable or
ethical purchases over the next six
months.
0%
believe that ethical corporate
practices and values are an
important reason to choose a brand.
Investors
0%
increase in investor signatories in
2020 to the UN’s Principles for
Responsible Investment.
0%
of sustainable indices outperformed
their peer benchmarks in 2020.
Sources: Accenture Future of Work
Study; Accenture Covid-19 Consumer Pulse Study; Principles for
Responsible
Investment; Accenture Global Consumer Pulse
Research; Blackrock
Sustainable organizations
are purpose-led businesses which inspire their people and partners
to deliver lasting financial performance, equitable impact and
societal value that earns and retains the trust of all stakeholders.
The sustainability consensus gap
Executives appear to be overconfident about
sustainability progress
Business leaders recognize the need to act.
When Accenture interviewed executives at the height of
the pandemic, 73% of them identified “becoming a truly
sustainable and responsible business” as a top priority
for their organization during the next three years. In
our latest research, 72% hold firm to that view.
But our new analysis reveals a misalignment
between business leaders and their stakeholders on
progress towards sustainability performance. It suggests
that the voices of stakeholders are not being heard.
While leadership teams are broadly convinced that
they are on track to operate more sustainably,
employees—an important stakeholder group as key
change-makers in organizations—tend to
disagree.
The apparent overconfidence
of leadership teams is also evident in how they grade their
organizations’ overall sustainability performance.
Our analysis reveals that executives
score their organizations 71/100 on average. Scores are
lower for employees overall (67) and for those below manager
level (65). Customers (57) and local community citizens (56)
are even less enthusiastic. Clearly, the further
stakeholders are from the management core, the more their
perspectives diverge, and the less able organizations are to
use their insights to shape decision-making.
Executives
rate the sustainability performance of their organizations
higher than other stakeholders
Source:Accenture
analysis of executive
and employee/consumer/citizen surveys. Note:
Respondents were asked a series of questions
relating to the 21 practices and 10 enablers from
our Sustainability DNA model. Executive and employee
scores were calculated from 23 questions; consumer
and citizen scores from 10 questions.
Consensus gaps limit stakeholder trust
The ambiguity around sustainability
performance is already having a negative impact.
Our survey finds that relatively few stakeholders
have full faith in the sustainability promises that
leadership teams make. Just under half of employees
(49%) believe senior leaders “walk the talk” on
sustainability “often” or “always”. This falls to
40% of consumers and 38% of local community citizens.
The
credibility and authenticity of company sustainability
commitments should concern leadership teams. These
consensus gaps are leading to an erosion of trust that
can be felt across the entire enterprise and stymie
efforts to shape sustainable organizations that deliver
value and impact.
Sustainability remains a second-tier priority for
executives
Shaping more sustainable and equitable
organizations presents a major challenge to many
leadership teams: Most executives recognize the
benefits, but 58% believe operating more
sustainably involves a trade-off with
growth. As such, sustainability remains a
second-tier priority, in urgent need of more visibility,
data and resources to drive fundamental organizational
change.
When forced to choose,
executives show a clear preference for more traditional
concerns:
Sustainability trails other organizational priorities
Top business priorities (percentage of executives):
Source: Executive
survey (N=1,496).
Note:
Respondents were presented with 17 priorities
which we then assigned to five buckets. Graph
shows the weighted average for each
bucket.
Just
25% of executives have put sustainability goals in place
systematically across their entire organization, while
19% say they are standard practice in “parts of the
organization”. This leaves more than half (56%) of
organizations piloting, discussing or holding back from
setting sustainability goals, and raises questions over
executives’ claims to have sustainability under control.
The opportunity cost of persistent consensus gaps
The lack of leadership focus on
sustainability—and on nurturing the stakeholder
relationships underpinning it—carries an opportunity
cost of robust progress and financial outperformance.
Companies with strong positive
executive-employee alignment on sustainability
performance (top quartile) are financially outperforming
those where alignment is weakest (bottom quartile) by
13%.
Stronger
consensus on sustainability performance is associated with
better financial performance
Positive sustainability consensus vs financial performance:
Source: Accenture analysis of
executive and employee surveys. Note:
The X-axis is a composite index of executive and
employee perceptions of sustainability
performance, and the gap between the two. The
Y-axis is a composite index of self-reported
revenues and EBITDA growth over the past 3
years. Each datapoint shows a group of companies
of the same size, in the same industry.
Shaping change through Sustainability DNA
We have identified the 21 practices that deepen
stakeholder relationships and embed their perspectives
at the core of the business. These practices constitute
Sustainability DNA and strengthen stakeholder-centricity
in three ways: driving human connections, collective
intelligence and accountability at all levels.
Interact
with the chart below to see Sustainability DNA in
action.
Human Dignity
Champions inclusion, diversity and equality
inside the organizations and beyond.
Equal Workplace Opportunity
Human Development
Sustainability DNA in action
Vinci developed an online tool to help employees
build resistance to bias and discrimination across
150 workplace interactions.
Stakeholder Inclusion
Emotion & Intuition
Mission & Purpose
Technology & Innovation
Intellect & Insight
Stakeholder
Inclusion
Emotion &
Intuition
Mission &
Purpose
Technology
&
Innovation
Intellect
&
Insight
Human Connections
Collective Intelligence
Accountability at All Levels
How Sustainability DNA helps
Human Connections:
Sensing and championing the values and needs of diverse
stakeholders across the business ecosystem.
Collective Intelligence:
Decision-making mechanisms that help organizations make
better stakeholder-centric decisions.
Accountability at All Levels:
Making stakeholder value creation a requirement at all
levels of the organization.
Sustainable organizations deliver value and impact
Strong Sustainability DNA is
associated with higher financial value and sustainable
impact for all stakeholders
Companies with strong Sustainability DNA are more likely
to deliver environmental, social and governance (ESG)
impact. By building strong, mutually beneficial
relationships with diverse stakeholders, leadership
teams can also bolster financial performance.
Our Sustainable Organization Index (SOI) grades almost
4,000 companies according to market-facing evidence of
ESG-supporting
practices in 146 areas. Econometric analysis finds a
positive relationship between these index scores and
financial and non-financial performance measures at the
company level. In other words,
the strength of a company's Sustainability DNA
is central to the ability of companies to operate
both profitably and mindfully.
Companies
with stronger Sustainability DNA are more likely to deliver
financial value and a lasting positive impact on society and
the environment
The EBITDA
margin of top
quartile companies on the index is 21% higher (+3.4
percentage points) compared with the bottom quartile. Their
sustainability performance is also 21% higher (+9.2 index
points).
Source: Accenture analysis;
Arabesque S-Ray; S&P Capital IQ
Sustainability DNA in action
Tune into this
podcast to learn how some leaders are uncovering the
business potential of sustainability when embedding it into
the core of their organizations.
AB InBev - Innovating to
close the loop
Challenge: Reducing waste throughout the
supply chain.
Solution: AB InBev has set a goal of
“closing the loop” throughout its value chain – for 100%
of primary packaging to be returnable or made from
majority-recycled content – by 2025.
Collaboration is central to these efforts. Since 2017,
the AB InBev team has enhanced its
strategic engagement with suppliers big and
small, including forging new partnerships with
local entrepreneurs through its 100+ Accelerator
program.
To further their efforts, AB InBev
has worked with a number of start-ups, inventors and
suppliers on a range of innovations
including the first ever fully compostable keg cap,
upcycling of by-products such as barley
straw and elimination of plastic beer rings using
recyclable paperboard.
The AB InBev team
has also focused on shifting behavior, leveraging its
brands to change consumer behavior, or
for example, working with Oxfam to understand the needs
and challenges of informal waste
collectors.
Ezgi Barcenas, Chief Sustainability
Officer:
“With our returnable bottles and kegs, we are
arguably one of the largest
circular businesses in the world. Consumers are
increasingly embracing
the concept of a circular economy but one of the
barriers still remains
meeting consumer expectations for convenience.
So we are constantly
innovating, and in doing so, building a more
sustainable and inclusive
value chain.”
Sustainability DNA in action:
Cisco - Delivering inclusive
virtual interactions
Challenge: Creating a more inclusive
virtual communication and collaboration experience for
customers.
Solution: Cisco has identified the link
between digital inclusion and economic and social
opportunity as an area in which the company could make a
tangible difference in the world. Drawing on
customer feedback to map out key pain points, the
company developed a roadmap to increase inclusion in the
virtual environment. Harnessing the power of responsible
AI to solve specific challenges—such as social
anxiety and differences in linguistic fluency—has been a
key enabler of progress. WebEx now allows a meeting host
to see who has yet to contribute to a conversation and
provides real-time translation in 15
languages. With the acquisitions of BabbleLabs and
Slido, Cisco is also working to mitigate issues such as
background noise and sustaining participant engagement.
Ruba Borno, Senior Vice President and
General Manager of Global CX
Centers:
“We have a very clear North Star: To make
virtual interactions 10 times better than
in-person interactions. So we’re constantly
thinking about how we adapt our products and
services to give everyone a
seat at the virtual table."
Sustainability DNA in action:
Ecoware - Creating a gender
balanced workforce
Challenge: Trying to create a more
gender equal workforce in the face of strong cultural
resistance.
Solution: Rhea Mazumdar Singhal, the
founder and CEO, prioritized bringing more women into
the workforce. Sensing resistance from her
male-dominated teams, she first connected with her team
on a
human level, setting a clear tone from the top around
the importance of women in the workforce.
She then engaged in regular, open conversations with
male managers to understand and mitigate concerns about
hiring
women. Then to help women at all levels better manage
their careers, she developed and embedded a set of
practices that offered greater flexibility to work
around personal commitments.
Rhea Mazumdar Singhal, Founder and
CEO:
“We got a lot of pushback from middle management
on the idea of hiring more women. They gave us
excuses such as ‘women can’t work in the night
which makes shift rotations harder to plan’ or
‘women will
always have issues with their children, meaning
they’re not reliable’. But now over 30% of our
workforce are women, and we won't stop there.
Our managers understand that gender equality is
central to our
purpose as a company—and that we expect them to
help us deliver on that purpose.”
Sustainability DNA in action:
Putting Sustainability DNA in action
AB InBev - Innovating to close
the loop
Challenge: Reducing waste throughout the
supply chain.
Solution: AB InBev has set a goal of
“closing the loop” throughout its value chain – for 100% of
primary packaging to be returnable or made from
majority-recycled content – by 2025.
Collaboration is central to these efforts. Since 2017, the
AB InBev team has enhanced its
strategic engagement with suppliers big and small, including
forging new partnerships with
local entrepreneurs through its 100+ Accelerator program. To
further their efforts, AB InBev
has worked with a number of start-ups, inventors and
suppliers on a range of innovations
including the first ever fully compostable keg cap,
upcycling of by-products such as barley
straw and elimination of plastic beer rings using recyclable
paperboard. The AB InBev team
has also focused on shifting behavior, leveraging its brands
to change consumer behavior, or
for example, working with Oxfam to understand the needs and
challenges of informal waste
collectors.
Ezgi Barcenas, Chief Sustainability
Officer:
“With our returnable bottles and kegs, we are arguably
one of the largest
circular businesses in the world. Consumers are
increasingly embracing
the concept of a circular economy but one of the
barriers still remains
meeting consumer expectations for convenience. So we are
constantly
innovating, and in doing so, building a more sustainable
and inclusive
value chain.”
Sustainability DNA in action:
Cisco - Delivering inclusive
virtual interactions
Challenge: Creating a more inclusive virtual
communication and collaboration experience for customers.
Solution: Cisco has identified the link
between digital inclusion and economic and social
opportunity as an area in which the company could make a
tangible difference in the world. Drawing on customer
feedback to map out key pain points, the company developed a
roadmap to increase inclusion in the virtual environment.
Harnessing the power of responsible AI to solve specific
challenges—such as social anxiety and
differences in linguistic fluency—has been a key enabler of
progress. WebEx now allows a meeting host to see who has yet
to contribute to a conversation and provides real-time
translation in 15 languages. With the
acquisitions of BabbleLabs and Slido, Cisco is also working
to mitigate issues such as background noise and sustaining
participant engagement.
Ruba Borno, Senior Vice President and General
Manager of Global CX Centers:
“We have a very clear North Star: To make virtual
interactions 10 times better than in-person
interactions. So we’re constantly thinking about how we
adapt our products and services to give everyone a seat
at the
virtual table."
Sustainability DNA in action:
Ecoware - Creating a gender
balanced workforce
Challenge: Trying to create a more gender
equal workforce in the face of strong cultural resistance.
Solution: Rhea Mazumdar Singhal, the
founder and CEO, prioritized bringing more women into the
workforce. Sensing resistance from her male-dominated teams,
she first connected with her team on a human
level, setting a clear tone from the top around the
importance of women in the workforce. She then engaged in
regular, open conversations with male managers to understand
and mitigate concerns about hiring women.
Then to help women at all levels better manage their
careers, she developed and embedded a set of practices that
offered greater flexibility to work around personal
commitments.
Rhea Mazumdar Singhal, Founder and CEO:
“We got a lot of pushback from middle management on the
idea of hiring more women. They gave us excuses such as
‘women can’t work in the night which makes shift
rotations harder to plan’ or ‘women will always
have issues with their children, meaning they’re not
reliable’. But now over 30% of our workforce are women,
and we won't stop there. Our managers understand that
gender equality is central to our purpose as a
company—and that we expect them to help us deliver on
that purpose.”
Sustainability DNA in action:
Most companies need to
strengthen their Sustainability DNA
On average, companies score 52 out of 100 on the Sustainable
Organization Index.
0
Score
Human Connections
Companies perform better at listening to their stakeholders
through activities that deepen human connections.
0
Score
Collective
Intelligence
Companies are weaker at turning insights about stakeholder
perspectives into action.
Human Connections Collective Intelligence
How strong is your Sustainability
DNA?
Note: Scores have been scaled
to highlight the differences between the top performing companies
(score = 100) and worst performing companies (score = 0) for each
enabler.
Becoming stakeholder centric
Building consensus with
stakeholders
A truly sustainable organization
cannot be shaped in a vacuum. Design of a credible
sustainability strategy should be based on building
closer stakeholder relationships.
To do this, leadership teams must
strengthen the Sustainability DNA of their organizations
to gather the insights they need to ensure robust,
stakeholder-centric decision-making combined with the
transparency and communication stakeholders are
demanding.
Actions to shape the sustainable organization
1. Diagnose
Understand the strength of your
Sustainability DNA from diverse
perspectives through feedback from
multiple stakeholder sets. Tools such as
the “Sustainable
Organization Diagnostic” could
help.
Conduct a high-level assessment
of the strength of the
Sustainability DNA in your
organization; a diagnostic tool
such as the "Sustainable
Organization
Diagnostic"
is a good starting point.
Explore the root causes of
existing mindsets and behaviors
which help or hinder the
development and employment of
Sustainability DNA in your
organization; for example,
conduct deep analytics of
existing stakeholder feedback
datasets such as customer
feedback and employee engagement
surveys.
Disaggregate the data (e.g., by
department or geography) and
triangulate between different
data sources and perspectives
(e.g., customer, leader, team
member) to identify areas of
your business where the
Sustainability DNA is relatively
stronger; these can be used to
build best practice case
studies.
Example: you claim to have
sustainability at the heart of
your organization, but no
executive has their compensation
tied to the fulfillment of
sustainability-related metrics,
e.g., net-zero targets (Animated
Purpose, Planetary Boundaries).
2. Define
Identify key interventions to boost
stakeholder alignment and key actors of
change to achieve your sustainability
goals.
Establish Sustainability DNA by
aligning it with your
organization's sustainability
strategy; mapping specific
stakeholder-centric practices to
specific sustainability goals
can help boost credibility.
Ask the owners of each
sustainability goal to assess
the extent to which they employ
Sustainability DNA on a
day-to-day basis; augment this
with an objective, third-party
appraisal.
Actively solicit stakeholder
feedback on how to meet your
sustainability goals;
crowdourcing that is well
incentivized and that moves
beyond the superficial can build
shared ownership.
Example: to meet your supply
chain sustainability goals, you
incentivize your suppliers to
prioritize
environmentally-positive
innovation (Planetary
Boundaries, Tangible
Empathy).
3. Develop
Build your roadmap for sustainable
and equitable change with a clear set of
KPIs to balance value and
impact.
Outline your vision of the
transformation required to
become a truly sustainsable
organization; this should
highlight the critical role of
Sustainability DNA in realizing
your ambition.
Develop a set of clear of KPIs
to measure the extent to which
Sustainability DNA informs
day-to-day decion-making; build
associated incentives into your
performance management
practices.
Test new approaches at speed
using agile, multidisciplinary
teams; leadership commitment
(including investment) is
critical to scaling the most
promising interventions.
Example: to develop a robust
inclusion, diversity and
equality strategy, you set bold
workforce representation goals
and supporting metrics, coupled
with key actions that enable you
to look beyond the numbers and
create sustainable change (Human
Dignity, Deep Metrics).
Turn responsible
values into sustainable outcomes
By
embedding stakeholder-centricity at the heart of organizational
transformation, leaders can deliver multi-dimensional value and
realize the promise of stakeholder capitalism.
About the authors
Ellyn Shook
Chief Leadership & Human Resources
Officer
Peter Lacy
Chief Responsibility Officer & Global
Sustainability Services Lead
Christie Smith
Talent & Organization/Human Potential
Global Lead
Matthew Robinson
Managing Director Sustainability Thought
Leadership
