Business Case for Sustainability – Summary of BCG/MIT Report



Forwarded by: Rajiv Maher <RMaher@ifc.org>
Date: November 26, 2009 4:20:39 PM EST

Subject: Business Case for Sustainability – BCG/MIT Report

Look at their Sustainability Audit on page 26 it has 10 statements for a Self Assessment on operationalizing Sustainability in firms. 

Business Case For Sustainability Report

The MIT Sloan Management Review and consultants Boston Consulting Group have released the findings of a global study into company attitudes towards the business case for sustain-ability. The report findings are based on a survey of over 1,500 global corporate executives and more than fifty in-depth interviews with experts from a range of disciplines. [Look at their Sustainability Audit on page 26 it has 10 statements for a Self Assessment on operationalizing Sustainability in firms.]

Key Findings: The vast majority of corporate executives believe that sustainability-related issues are having or will soon have an impact on their businesses.However, more than 70% of them say their companies have not developed a clear business case for addressing sustainability.

  • There is strong consensus that the underlying drivers of sustainability are highly complex, interrelated, and lasting, and that the corporate sector will play a key role in solving the long-term global issues related to sustainability.
  • Although 92% of respondents said that they were trying to address the issue of sustainability, most said that their companies were either not taking bold action on sustainability or were falling short on execution.
  • Less than a third of survey respondents said that their companies have developed a clear business case for addressing sustainability.
  • Less than 45% said their organizations were pursuing basic sustainability strategies such as reducing or eliminating emissions, reducing toxicity or harmful chemicals, improving efficiency in packaging, or designing products or processes for reuse or recycling.
  • The majority of sustainability actions undertaken to date appear to be limited to those necessary to meet regulatory requirements.
  • The biggest drivers of corporate sustainability investments include government legislation, consumer concerns and employee interest in sustainability.
  • The researchers identified three major barriers to decisive corporate action: a lack of understanding of what sustainability is and what it means to an enterprise, difficulty modeling the business case, and flaws in execution, even after a plan has been developed.
  • Many thought leaders interviewed for the study believe that the risks of failing to act are growing, say the researchers.
  • 68% of executives with sustainability expertise cited improved financial returns as a benefit from their organization’s investments, compared with only 32% of novices.
  • In addition, those executives with more knowledge also considered the economic, social, and even political impacts of sustainability-related changes in the business landscape.
  • Fewer than 25% of respondents said that their company had decreased its commitment to sustainability during the downturn.
  • Respondents in some segments, such as the automotive industry and the media and entertainment industry, reported an increased company commitment to sustainability relative to the average.
  • Once companies begin to pursue sustainability initiatives in earnest, they tend to unearth opportunities to reduce costs, create new revenue streams, and develop more innovative business models.
  • Early movers’ approaches have several key characteristics in common: the incorporate a comprehensive set of data into a robust business case, which they then integrate throughout all relevant aspects of their operations to deliver measurable financial results.
  • http://www.bcg.com/documents/file29480.pdf

About Bruce

Work for sustainable development of small islands; ex-Peace Corps (Volunteer and staff) in LA & Caribbean; cruised Caribbean on S/Y Meander for three years; like small tropical islands, French canals, Umbria, Tasmania, and NZ. Married 50 years. Former President (1995 to 2016) of Island Resources Foundation.
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