Sustainability playing an 'increasingly important' role in corporate strategies

13 May 2015

Supply chain’s role in increasing sustainability is becoming an increasingly important strategic issue for corporations, according to research.

Ethical Corporation’s State of Sustainability report revealed that 71 per cent of respondents to a survey said their organisational leader was convinced of the value of sustainability. And even where corporate leaders were not fully engaged, 87 per cent of respondents agreed that sustainability was becoming increasingly important for strategy.

Supply chain and procurement was the department most directly impacted by a company’s sustainability strategy, the survey found. Supply chains were also the area of corporate activity where sustainability was most important.

Some 49 per cent of respondents said sustainability was driving business revenues, with 67 per cent agreeing it provided savings.

However, only 21 per cent of corporate respondents said their company was leveraging the potential of sustainability as fully as possible. Only a third said that they are measuring the return on investment of sustainability, or that they could say with confidence that they accurately measure the impact of their sustainability initiatives.

Ethical Corporation concluded organisations were making strides in incorporating sustainability into their strategies, in particular seeking to minimise environmental and social impacts in their supply chains.

“But there is still a huge amount to do in moving from theory to practice, fully operationalising sustainability and understanding the business case and the impact on revenues,” the report added. “Grappling with these issues will be the key challenge in the year ahead.”

The study was based on the responses of nearly 1,500 sustainability professionals worldwide, and looked at the significance of sustainability in different organisations, who takes responsibility, sustainability budgets and returns, and how sustainability will evolve.

Ethical Corporation predicts that 2015 is likely to be a crucial year for corporate sustainability, as new targets for poverty reduction, sustainable development and emissions-reduction are due to be set out by world leaders this year.

The report says: “Business will be called on to shoulder much of the burden in delivering the promises made by leaders at these events. The degree to which companies are in a position to respond to the call will to a great extent determine their future sustainability.”

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