The sense of urgency to address climate change is intensifying in every sector of the economy. People, governments, investors and business partners are demanding to see change. But what does this mean in practical terms?
To get a snapshot of the state of Sustainability in business, Sphera surveyed 133 leaders from companies across industries including Manufacturing, Construction, Education, Automotive, Oil & Gas, Technology and Health Care. Conducted from September-November 2020, the Sphera Sustainability Maturity Survey helps establish a global benchmark in terms of commitment, strategy, implementation, measurement and reporting.
The findings, which were first shared at Sphera’s Virtual Sustainability Summit, show companies around the world are prioritizing Sustainability, but, in many cases, implementation lags behind commitment. Here are four market trends that emerged in the survey:
1. Organizations are optimistic about early progress for Sustainability.
More than 100 countries and many more businesses around the world have set targets to achieve climate neutrality over the next several decades. While we are witnessing a newfound acknowledgement of the critical risks of climate change, the idea of Corporate Sustainability isn’t new. In fact, many survey respondents consider their organizations relatively far along on their Sustainability journey. When we asked business leaders to gauge the maturity of their organization’s Sustainability efforts, a little less than half of respondents (44%) said they considered their companies to be leaders in this area. Another third (34%) of respondents reported that Sustainability efforts are seen as avenues to optimize processes and boost innovation. This widespread confidence indicates companies are engaging in the transformation in earnest and are beginning to see Sustainability as a catalyst for long-term value generation.
2. Sustainable practices lag behind commitments.
As businesses embrace the long-term strategic benefits of Corporate Sustainability, we have seen a surge in public commitments to meet climate-related goals. Sphera’s survey underscores this trend with encouraging findings that show most senior leaders are discussing climate commitments internally at both the strategic (87%) and product development (71%) levels. However, the responses also show that there is still work to be done. Just over half (53%) of respondents said that their organizations have a clear, communicated Sustainability Strategy, and 59% said they incorporate Sustainability into their product innovation processes. This suggests many companies are poised to take the next step toward translating commitments into action.
3. Transparency is a top priority.
Sustainability efforts have historically lacked a standardized, evidence-based framework for climate-related goals, which has made it difficult for businesses to set meaningful incremental targets and gauge progress. Our survey suggests the tide is turning on this issue since a majority of companies (70%) are already publicly reporting on Sustainability, and 62% of companies said they are working with a clear Sustainability target. More than half (52%) of business leaders surveyed said their organizations are engaging with science-based targets to set company goals.
4. The window of opportunity to digitalize sustainability efforts has opened.
The pandemic has accelerated Digital Transformation across the value chain. However, when it comes to Sustainability, digital technology is nascent at best for most companies. Sphera’s survey showed just one-quarter of companies (26%) had a dedicated system in place to manage Sustainability performance. The rest of organizations use manual processes and spreadsheets or ad hoc processes, according to the survey results. A lack of standardization and centralized information strains transparency efforts, limits investment leverage and slows strategic agility going forward. It’s clear the digitalization of processes is the biggest opportunity for businesses seeking to accelerate their Sustainability efforts in 2021.
The results of our survey confirm the private sector is committed and ready to engage with sustainability efforts in a meaningful way. However, not all companies have determined what that will look like in terms of implementation, processes and tools. This means 2021 will likely be a pivotal year to get sustainability efforts off the ground.