Executive Briefings

Corporate Leaders Not Walking the Walk on Sustainability

An overwhelming majority of corporate executives believe that sustainability-related issues are having or will soon have a material impact on their business. Yet relatively few companies are taking decisive action to address such issues, according to a new study by MIT Sloan Management Review (MIT SMR) and The Boston Consulting Group (BCG).

The study, titled "The Business of Sustainability," is being released  in two publications -- a detailed special report by MIT SMR and a summary report by BCG. The findings are based on a global survey of more than 1,500 corporate executives and more than 50 in-depth interviews with experts from a range of disciplines such as energy science, civil engineering, management, and urban studies.

"What came across loud and clear is that sustainability is having an increasingly significant impact on business, and executives are placing it high on the corporate agenda," said Maurice Berns, a BCG partner and a lead author of the report. "But we also found a wide gap between intent and action. Simply put, a majority of companies are not acting decisively to exploit the opportunities and mitigate the risks that sustainability presents. The findings should be a wake-up call to executives that if they want to make progress on sustainability, it's time to get serious."

Although almost all the executives in the survey (92 percent) said that they were trying to address the issue of sustainability, most said that their companies were either not taking bold action on sustainability or falling short on execution.

There are several noteworthy exceptions, however. The study profiles a small number of companies (including Nike, Better Place, and Rio Tinto) that have aggressively integrated a sustainability strategy into their businesses -- and that are reaping substantial rewards. The five companies cited most often by survey respondents as "world class" in addressing sustainability were General Electric, Toyota, IBM, Royal Dutch Shell, and Wal-Mart.

The research indicated that once companies begin to pursue sustainability initiatives in earnest, they tend to unearth opportunities to reduce costs, create new revenue streams, and develop more innovative business models. "One of the most interesting findings was that the more you know about sustainability, the more it matters," said Michael Hopkins, editor in chief of MIT SMR and a co-author of the report. "Executives who have been thinking and strategizing around the issues are much, much more likely to see the competitive advantage that a sustainability strategy can grant."

For more details on the study's findings and interview transcripts, visit the Sustainability Initiative Web site at http://sloanreview.mit.edu/busofsustainability.

Read Full Article

An overwhelming majority of corporate executives believe that sustainability-related issues are having or will soon have a material impact on their business. Yet relatively few companies are taking decisive action to address such issues, according to a new study by MIT Sloan Management Review (MIT SMR) and The Boston Consulting Group (BCG).

The study, titled "The Business of Sustainability," is being released  in two publications -- a detailed special report by MIT SMR and a summary report by BCG. The findings are based on a global survey of more than 1,500 corporate executives and more than 50 in-depth interviews with experts from a range of disciplines such as energy science, civil engineering, management, and urban studies.

"What came across loud and clear is that sustainability is having an increasingly significant impact on business, and executives are placing it high on the corporate agenda," said Maurice Berns, a BCG partner and a lead author of the report. "But we also found a wide gap between intent and action. Simply put, a majority of companies are not acting decisively to exploit the opportunities and mitigate the risks that sustainability presents. The findings should be a wake-up call to executives that if they want to make progress on sustainability, it's time to get serious."

Although almost all the executives in the survey (92 percent) said that they were trying to address the issue of sustainability, most said that their companies were either not taking bold action on sustainability or falling short on execution.

There are several noteworthy exceptions, however. The study profiles a small number of companies (including Nike, Better Place, and Rio Tinto) that have aggressively integrated a sustainability strategy into their businesses -- and that are reaping substantial rewards. The five companies cited most often by survey respondents as "world class" in addressing sustainability were General Electric, Toyota, IBM, Royal Dutch Shell, and Wal-Mart.

The research indicated that once companies begin to pursue sustainability initiatives in earnest, they tend to unearth opportunities to reduce costs, create new revenue streams, and develop more innovative business models. "One of the most interesting findings was that the more you know about sustainability, the more it matters," said Michael Hopkins, editor in chief of MIT SMR and a co-author of the report. "Executives who have been thinking and strategizing around the issues are much, much more likely to see the competitive advantage that a sustainability strategy can grant."

For more details on the study's findings and interview transcripts, visit the Sustainability Initiative Web site at http://sloanreview.mit.edu/busofsustainability.

Read Full Article