2Sustain

Corporate sustainability programs are now standard fare for most large, publicly-listed corporations, but a new survey from KPMG found that nearly one-third of smaller businesses still don’t have a sustainability strategy in place.

The study, Corporate Sustainability: A Progress Report, polled 378 senior executives from around the world. It found that:

• Overall, 62 percent of companies participating in the survey have a corporate sustainability plan –up from just over half polled in a similar survey in 2008.

• However, larger publicly-listed companies are clearly leading the charge. Nearly eight out of 10 of the large companies polled have a strategy, compared with less than  half of smaller businesses.

• US companies are lagging companies elsewhere around the globe. Of the 86 American firms included in the survey, about half (55 percent) said their organization has a formal sustainability strategy in place. More than four out of 10 of the US respondents reported that it was difficult to overcome organizational focus on other programs that provide more readily measureable short-term financial benefits.

• Fortunately, businesses are beginning to connect the dots between sustainability and profitability.  Almost half the executives surveyed said they believe that implementing sustainability programs will contribute to the bottom line, either through cost reduction or increased profitability. What’s more, among those that do not have a strategy currently in place, seven out of 10 expect to do so within one to five years. One-quarter said they had no specific timeframe.

What are the biggest obstacles companies face when trying to implement a sustainability program? According to the executives polled, the short list of hurdles includes:

• A lack of common set metrics and tools – and information systems- for measurement and analysis of the impact of sustainability programs
• A lack of available financing that will put sustainability on par with operational programs that have a higher short-term return on investment (ROI)
• A lack of a clear and rigorous international framework of regulation within which companies can plan with confidence.

Not surprisingly, two-thirds of those polled believe that a new set of rules is either very important or critical, and the survey found that there is widespread support for tougher international regulations if these would reduce the complexity and cost of complying with widely differing national and local rules.