Environmental experts and scientists from all sorts of disciplines have been loudly pushing for an increased focus on sustainability in the business world. Due to some extreme weather occurrences over the past few years the government is also finally getting seriously involved, demanding that corporations toe the line and start making it a priority. Leaders of industry and political pundits have been lukewarm about the whole thing, often pointing to the fact that environmental issues could have a wide range of causes, and the impact of sustainability efforts are hard to measure. But thanks to a study recently released through a joint effort of the Boston Consulting Group and MIT’s Sloan Management Review the debate may be coming to an end. According to their research, sustainability as a cornerstone of business practices is rewarding people on a number of levels, and well over half of all companies they polled have now shifted their entire model to take best advantage.
The bottom line is that sustainability is now not only a core philosophy for businesses, but also one of the major drivers of profit and innovations. The study culled this information from questionnaires given to over 2,600 international companies. Finally, it is clear that the business world is paying attention to what science has been saying for years. But is the answer to mankind’s environmental and resource problems just this simple? As with most things in life, the answer is a resounding “no”.
There are a lot of positives to be taken from the results. First off, it is clear that today’s business leaders are looking at sustainability efforts as a driver of innovation. Limitations and rules often lead to new thinking, as innovators must come up with ways to accomplish their goals that fit inside stricter parameters. That makes sustainability an advantage as much as it is a detriment to the corporate bottom line. The challenge businesses now face is how to differentiate themselves from other companies that focus on sustainability.
The study also found that these initiatives stick and make the largest impact when the most senior management at the company focus their attention on these efforts. More than 60% of the companies that changed business models did so because their management targeted sustainability as a profit generator. Even so, companies still struggle with showing the tangible results of this refocus to their investors and shareholders. It may be that sustainability is something of a branding buzzword. Everyone is on board with the idea that it’s a difference-maker, even though most people can’t quite say what that difference will finally be.
So what’s the concern? If you are passionate about the environment, this is basically good news. But the report is based upon responses to a questionnaire, not a scientific study. That means the companies are asked to describe their efforts within certain parameters, as opposed to a true study, where a company’s work is reviewed by an independent, unbiased organization from Northeastern University or a scientific research group. In addition, more CEOs declared a commitment to sustainability efforts than there are companies showing real shifts. It’s a general term, and some industry leaders may not actually understand what they are committing to. It’s all movement in the right direction, but clearly the work of the government and the private individual is nowhere near over.