Ernst + Young and the GreenBiz Group just released their “2013 six growing trends in corporate sustainability” report, providing some insight into what’s happening in the world of sustainable business. It’s a survey-based report, so we have to be mindful that the observations are based upon responses from just under 300 respondents from companies with over $1billion in annual revenue, 85% of which are from the United States.
That caveat aside, the report shows that:
· CEO/Board engagement in sustainability is key to successful management of associated risks
· Governments and NGOs aren’t playing much of a role in corporate sustainability at this point in time
· Companies’ understanding of sustainability has become more sophisticated, now focusing on risk and resource availability
· Although the understanding is more sophisticated, the response is immature, with little or no scenario planning
· Integrated reporting (simultaneous reporting of financial, environmental, social and governance information), perhaps the key to alignment on the sustainability issue, is only slowly advancing
· Investors and shareholders are demanding more information and concrete action on sustainability
These findings mirror our experience and, frankly, it’s a “good news, bad news” situation. The good news is that companies are exploring sustainability in a more sophisticated way without government prodding or regulation. The bad news is that there’s still plenty of uncertainty (partly because of the lack of regulation) and there’s not enough scenario planning being done – particularly problematic in light of the level of uncertainty.
The bigger concern, however, is the fact that this survey represents responses from companies that are engaged in sustainability initiatives. What about the thousands of companies that haven’t begun work in this space? How do we get them engaged? What are the carrots and/or sticks that get people to move through awareness to understanding to action?