Top management key to sustainability success

Senior leadership buy-in is key to companies' successful sustainability initiatives, say executives, though few firms give responsibility to directors

A survey of more than 330 company board members and executives from European businesses reveals that “senior leadership engagement” is likely to be the difference between success and failure of companies’ sustainability strategies, with the majority of respondents citing board-level support as being crucial to achieving sustainability objectives.

However, the research, which was commissioned by Coca Cola Enterprises, also confirms that just 22% of those polled worked for companies where a director held responsibility for sustainability goals, and only 26% say their firm assesses the success of sustainability initiatives across the whole business.

“This suggests that while companies recognise the critical involvement of senior leaders in advancing these strategies, few have managed to institutionalise sustainability concretely for their top executives,” the report states.

On a more positive note, technological developments, which are also cited by respondents as an important to future sustainability initiatives, are playing a key role in reducing firms’ environmental impacts.

Almost three-quarters of those polled report that their business is using new technologies in sustainability efforts, with 43% confirming that technology has helped to reduce impacts and 41% say technologies are being used to develop new, more sustainable products.

The research also demonstrates that companies are working with other organisations to tackle sustainability. Almost half (49%) of those polled say they are working with their suppliers; 27% with universities and NGOs; and 32% joining forces with competitors.

“We have to work internally and use our network of research and development centres, but we also want to be much more open to the outside world than we have been in the past,” commented Didier Roux, vice president of R&D and innovation at Saint-Gobain, the French building materials group.

Another key finding was that despite the challenging economic climate, and the belief that concerns over cost and rates of return are the biggest barriers to sustainability, more than half of the business executives surveyed agree that their company has maintained its commitment to reducing environmental impacts.

“Companies have largely stayed with their sustainability goals,” confirmed Brian Gardner, senior editor at the Economist Intelligence Unit, which carried out the research. “What we are seeing now is a real shift to mainstream sustainability related initiatives in Europe. Companies are learning how to better integrate this into their businesses profitably, but there is still a lot of room for improvement.”

Just 21% of respondents report that increased profits are one of the key benefits of their sustainability approach, with improved reputation being the most often cited benefit (61%) from pursuing a sustainability strategy. Almost one-third of respondents agree that sustainability helps to differentiate their business from competitors, and 29% say it helps to boost stakeholder engagement.