business reports
Published on : Mar 4, 2024
A new global study by the IBM Institute for Business Value found that while a majority of organizations recognize sustainability as important to their business strategy, many C-suite leaders are struggling to fund their sustainability investments. Data collected from 5,000 global C-suite executives highlighted that organizations that embed sustainability within their operations see better sustainability and financial outcomes, while spending less money than their peers.
The study*, "Beyond checking the box – how to create business value with embedded sustainability," revealed that almost one-third (30%) of executives surveyed say they have made significant progress in executing their sustainability strategy – up from 10% a year ago – but turning ambitions into impact remains a challenge. Almost half (47%) of executives surveyed struggle to fund sustainability investments; six in 10 say they have to make trade-offs between financial and sustainability outcomes.
Organizations that embed sustainability more deeply into their operations show a marked difference in outcomes from enterprises with a singular focus on areas, such as regulatory reporting or sustainability as a corporate project. Organizations that embed sustainability are 75% more likely to attribute greater improvement in revenue from their sustainability efforts, and are 52% more likely to outperform their peers on profitability.
The findings indicate that many organizations are focused on managing complex, varied reporting requirements rather than real business value and results. The study found that spending on sustainability reporting exceeds spending on sustainability innovation by 43%. Only 31% of executives surveyed report they are incorporating sustainability data and insights into operational improvements to a great extent, while 14% say they do so with innovation initiatives.
"An organization's approach to sustainability may be holding it back. There is no quick fix. Sustainability requires intentionality and a shared corporate vision," said Oday Abbosh, Global Managing Partner, Sustainability Services, IBM Consulting. "Sustainability needs to be part of the day-to-day operations, not viewed only as a compliance task or reporting exercise. By embedding sustainability across their business, organizations are more likely to drive internal innovation, attract and retain skilled talent, and be better positioned to deliver both positive environmental impact and financial outcomes."
Other key study findings include:
Organizations continue to pursue sustainability, but funding, skilling and operationalizing actions remain a challenge
Despite most organizations not incorporating sustainability into innovation initiatives, leaders expect generative AI to help supercharge sustainability efforts
Organizations that embed sustainability more deeply into their operations see benefits that can convert sustainability efforts into business value
Further analysis of the survey data found that:
Beyond checking the box - how to create business value with embedded sustainability underscores the urgent need for organizations to integrate sustainability objectives within business strategy and apply technologies like AI to realize greater progress and profitability. The study also serves as a resource for business leaders, outlining actionable strategies to help enterprises with challenges around data, business integration and decision-making.