Sustainability tends to get a lot of positive press coverage. Who can argue with the principle that it’s good to save the planet? But in some boardrooms, sustainability has often been dismissed as a diversion from the core purpose of a business: making money and serving the interests of the shareholders. But CEOs—at least, the smart ones—are starting to think again. According to the second annualinnovation and sustainability survey conducted by The Boston Consulting Group andMIT Sloan Management Review, corporate investment in environmentally aware strategies is on the rise. Why now? Simon Targett, BCG’s editor in chief, spoke with Knut Haanæs—global leader of BCG’s Sustainability Initiative and a coauthor of the report on the survey conducted with MIT Sloan Management Review—to discuss why companies are increasingly viewing sustainability-driven strategies as a worthy investment of time and money.
Simon Targett: How do you define “sustainability” for companies?
Knut Haanæs: Sustainability—deriving from the Latin words meaning to keep up or maintain—has come to mean the capacity to endure. And, in a business context, it signifies a robust and forward-looking strategy. A company that is excellent at sustainability has several striking characteristics: It is continuously seeking to improve the way it manages its resources—not only raw materials for products but also time, information, and people. It is sensitive to the fast-changing outside world, and its leaders think about how to thrive tomorrow rather than how to make a fast buck today.
Sometimes, sustainability is viewed as a “nice-to-have”: once you’re making money, this theory holds, you can afford to think about being altruistic. But, in actuality, sustainability is not about being altruistic and “doing good.” Rather it’s about being profitable and “doing well.” In this sense, it is a “must-have” rather than a “nice-to-have.” Yes, there is a sense that sustainability is good for the brand—and certainly it offers a good insurance policy for companies. But it is more than this: sustainability offers a company the chance to gain a real competitive advantage over its rivals and over the long term.
You have, in partnership with MIT Sloan Management Review, conducted a survey of more than 3,000 managers from around the world. What has been your top finding?
We've found that, despite the troubles in the global economy, companies say they are increasing the amount of time and money that they are investing in sustainability-driven strategies. Of the managers we polled, some 59 percent revealed that they had boosted their investment in such efforts. And this rise is set to continue: some 68 percent of our survey respondents said that they plan to increase their investment this year.
Why are executives increasing their investment in sustainability? Do we know?
To some extent, it seems to be a leap of faith. We found that only one in three executives were able to say with any real conviction that sustainability adds to profitability today.
Yet, probe a bit deeper, and you find that the top-performing companies are significantly stronger “embracers” of sustainability than low-performing companies are.
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