18 Apr 2011 04:04:36
Sustainability increases profitability
New survey reveals that sustainability strategies deliver wider commercial and operational benefits for businesses, but requires meaningful benchmarks.
Major new survey has revealed that corporate sustainability strategies are delivering a wide range of commercial and operational benefits for many of the world's leading companies. Consultancy giant KPMG and the Economist Intelligence Unit commissioned the survey that polled over 370 senior figures at large firms, half of whom hold board positions.
According to the survey, improved customer relations, enhanced profitability and the development of new products and services are among the wide-ranging benefits of sustainability strategies.
Vincent Neate, European head of climate change and sustainability at KPMG said "While most of the companies we spoke to implemented sustainability strategies for brand reputation enhancement and compliance reasons, those companies have also benefited from increased profitability, new and better quality products and services and improved employee morale."
The survey confirmed that the main driver behind the development of sustainability strategies remained the desire to enhance brand reputation or comply with environmental regulations. But, the benefits that resulted from such strategies were wider than that, with 32% claiming sustainability helped them attract and retain customers, 31.5% citing increased profitability, and 25% stating that they had developed better quality products and services as a result of sustainability efforts.
However, sustainability strategies are held back by the absence of standardised metrics to measure their success. Three quarters of respondents said that the lack of meaningful benchmarks was a challenge for sustainability strategies, while 40% noted that competing short-term business priorities also hampered green efforts.
According to Neate, in a tough economic environment, it is crucial that the progress that has been made in engaging the business community in sustainable practices is not affected by lack of measurability. And, he added that task forces set up by the Global Reporting Initiative and the International Integrated Reporting Committee were making progress towards developing common standards for sustainability metrics.