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Most business leaders see environmental sustainability as a costly obligation rather than an investment in the future
Executives recognize the urgency for climate action but limited impact is visible on the ground so far, as they lack an overarching strategy, clarity on the business case, and coordinated implementation
To understand whether companies are taking the urgent mandate of environmental sustainability sufficiently seriously, and to assess their progress over the years, the
Although the sustainability vision is being integrated into remodeled business strategies and nearly two thirds (64%) of executives say that sustainability is on the agenda of each of the C-suite in their organization, there is still a gap between climate ambition and concrete actions: less than half (49%) have a defined list of initiatives for the next three years, and just over a third (37%) of respondents say their company is redesigning its operating model. In total, the level of investment into sustainability initiatives for companies with over
The report found that many organizations are lacking a collective vision and coordination around sustainability efforts across their operations, and the various teams are still working in silos. For example, only 43% of respondents say that sustainability-related data is available and shared across the entire organization, and less than half (47%) of businesses are actively recruiting new talent with strong sustainability skills.
Employee expectations and regulations currently the main drivers for sustainability initiatives
Currently, the main drivers for sustainability initiatives are pressure from current and future employees (for 60% of executives) and the need to pre-empt stricter future regulation (57%), while 52% of executives say they expect it will increase their revenue in the future. Most businesses are holding back because they are fearful of short-term cost implications. Sustainability is frequently seen as a cost center, rather than a value center, particularly within the context of the global macro-economic landscape. Only one in five (21%) respondents believe that the business case for sustainability is clear, while 53% believe that the cost of pursuing such initiatives outweighs the potential benefit.2 On the contrary, the report found that organizations that are prioritizing sustainability are already outperforming organizations that aren’t.3
“Many companies understand the sustainability mandate, but organizations need to align on a clear strategy and short-term objectives to deliver concrete outcomes that will enable society to live within and not beyond the planetary boundaries,” says
Some companies are investing in technology to limit their environmental impact
Companies are more conscious of the environmental footprint of their technology and leveraging new tools to achieve their objectives. Over half (55%) of executives say that their company knows how much carbon its technology emits – across digital tools, apps, IT systems, and data centers –, and this proportion reaches 63% in industrial manufacturing, and 61% in consumer products and energy. In order to achieve their sustainability objectives, 58% of organizations say they are already using AI and automation, in particular in the energy sector (72%), and over half (54%) of organizations globally are investing in digital technologies such as AR/VR, or collaboration tools to reduce employee travel.
Methodology:
For this research, the
To get access to the report, click here: https://www.capgemini.com/insights/research-library/sustainability-trends
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1
2 This perception is particularly profound in
3 From 2020 to 2021, the 11% most advanced companies in sustainability or “frontrunners” realized 83% higher revenue-per-employee compared to the average, whereas the 26% least advanced were 13% below the average. “Frontrunners” also realized a 9% higher net profit margin compared to the average during the same period. This doesn’t demonstrate that sustainability directly leads to profitability, but highlights that it isn’t necessarily a financial drain and that organizations can be financially ahead and sustainable at the same time. “Frontrunners” have for example put in place measures which benefit both on the financial and sustainability fronts, like smart systems to reduce energy consumption, waste reduction schemes, or encouraging work from home to reduce emissions. “Frontrunners” are defined as companies demonstrating the most maturity in 1) value-chain processes, including Sourcing, R&D/Product Design/Innovation, Manufacturing and Logistics; 2) how they get their people to buy into their sustainability visions and 3) the use of technology for sustainability.
Attachment
- 11_08 Capgemini_Sustainability_Trends_2022_ENG
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