Carolyn McMaster | November 18, 2014
What drives corporate sustainability initiatives, and how much influence do sustainability executives actually wield? I attended a webinar last week on a global survey of sustainability leaders of large corporations in hopes of finding out.
The survey, conducted by the UK-based sustainability consulting firm Verdantix, polled 260 executives—chief sustainability officers (CSOs) and similar titles—at companies around the globe with revenues of $250 million to over $20 billion. A quarter of them had revenues that topped the high end; only 38 were based in the U.S. Here are a few of my top takeaways:
Sustainability is taken seriously (sort of). Most CSOs report directly to the CEO or other top executive. Two years ago, 21 percent of sustainability execs had no decision-making authority; that number has dropped to 8 percent, and now 60 percent of them have full or shared authority. Still, that means just under a third act only in an advisory capacity.
Spending is up (kind of). Most sustainability budgets will be flat or grow just a bit in 2015; however, 61 percent said companywide spending on sustainability initiatives would rise. That’s not insignificant, since companywide spending typically is two or three times more than the sustainability department budget, on average, according to Verdantix. This may mean sustainability departments are maturing and responsibility for sustainability initiatives is being integrated throughout enterprises.
CEOs are guided mainly by short-term vision (a.k.a. Wall Street). Only a third of respondents said their CEO sees sustainability in the context of long-term viability; one-third said their CEO sees it as affecting annual and quarterly performance and one third said it impacts financial performance today.
Financials and risk are chief motivators. Sadly, this is not a surprise. (See above.) Drivers of sustainability initiatives are chiefly operational improvements, risk management and financial performance. The Verdantix analyst said branding is also a top concern, but I sensed a disconnect with action on that claim. Influential external factors are economic growth, regulatory disclosures, stakeholder pressures and B-to-B requests for information.
CSOs don’t control communications. Though nearly half of respondents have “shared authority” for decisions, only 26 percent control their communications spend. This is too bad, because corporate sustainability efforts have no shortage of communications opportunities. There’s more that sustainability leaders can do to educate top executives, boards and shareholders: they need memorable stories based on proof points that go beyond short-term goals—and speak credibly to corporate aspirations. (In fact, we’re about to launch a new collaboration in this vein—stay tuned for news on Thinkshift’s SustyCo Story initiative.)