Sustainability is transitioning from an image and cost-driven initiative into an integrated business strategy.
Sustainability is transitioning from an image and cost-driven initiative into an integrated business strategy. A new survey from McKinsey finds the No. 1 reason executives now say they implement environmentally friendly practices is to align with “overall business goals, missions or values.” That’s according to almost half (43 percent) of executives surveyed, up from 30 percent in McKinsey’s sustainability survey two years ago. Reputation ranks second with only a marginal change, while cost cutting as a reason for addressing sustainability drops by 10 percentage points.
One reason for the shift seems to come from the top. CEOs are more than twice as likely as they were in 2012 to regard sustainability as their top priority. However, that can also create executional challenges because the more priority placed on sustainability, the more it needs to be integrated into the core business, McKinsey reports. The new survey notes increasing concern around issues such as the absence of performance incentives and lack of accountability at companies already involved in sustainability efforts.
The eco-friendly actions taken most often by corporations in this year’s survey were reducing energy usage (64 percent) and reducing waste (63 percent), which aligns with the circular economy trend we recently spotlighted.
When you factor in consumers’ growing preference to do business with socially responsible companies, according to Nielsen, and the expanding belief that sustainable companies can also be profitable, as Forbes notes, it’s likely that incorporating sustainability into company strategy will become a business norm.
Image credit: McKinsey