2Sustain

Most executives (69 percent) in an Economist Intelligence Unit survey believe there is a strong link between financial performance and commitment to sustainability in the long term (five to 10 years). However, only 24 percent feel there is a strong link in the short term (one to two years).

The survey, which polled more than 200 finance and corporate social responsibility executives in December 2009 and January 2010, defined sustainability as “operating in a way that preserves the long-term productive capacity of the natural and social environments.” Interestingly, the results also revealed that:

• The vast majority of survey participants (87 percent) agree that sustainability will become more important in the coming three years. Of these, 46 percent strongly agreed.

• Among those polled, the top obstacles to embracing sustainability are: the poor business climate and lack of consensus and clarity. Specifically, about one-third (34 percent) said their firms’ immediate financial goals were a more pressing priority than sustainability.

• Executives report including sustainability into a variety of corporate functions, including supply chain relationships (29 percent), improving energy efficiency (38 percent), educating employees on sustainability (32 percent), and engaging employees in sustainability related activities (30 percent).

• 54 percent say sustainability efforts have been led by top management.

• Even though companies are beginning to incorporate sustainability into a wide range of functions, only 49 percent of those in the survey said they report progress in meeting their environmental sustainability goals. Slightly over half (53 percent) report their progress on meeting social sustainability goals.

• 38 percent of survey respondents use employee recognition programs as employee incentives. 18 percent said they link pay to sustainability indicators.

It’s encouraging to read that business executives seem to be fully recognizing the direct long-term correlation between financial performance and commitment to sustainability. Clearly, while sustainability still represents a risk for some, others appreciate the opportunity. Successful companies are making sustainability a fundamental component of their overall business strategy. They realize that the business case for sustainability is stronger than ever –because of factors such as globalization, impending regulations, climate risks and evolving stakeholder concerns.

The full report, “Managing for Sustainability,” is available at www.eiu.com/sponsor/enel/managingsustainability