Short-term profits put corporate sustainability commitments at risk
Sustainability is at risk of dropping off the corporate agenda post-recession with business ditching it in favour of strategies to generate short-term profits and enhance their balance sheet, according to a new report released by O2 today.
With spending still under pressure, Harnessing Change: Preparing for Business in the Next Decade, reveals that the downturn has left British boardrooms deeply divided on the issue. Nearly half (46%) of business and public sector leaders plan to prioritise sustainability over the next two years, but more than a third (36%) admits they will turn away from it. 1 in 3 argues that they don’t have the expertise to quantify and justify its benefits resulting in it failing to fly in boardrooms.
Despite being at odds with sustainability in the short-term, the report finds that corporate commitment to environmentalism has reached a tipping point, with an emerging consensus that sustainability is good for business. Nearly 60% of the senior executives questioned said it will increase market share over the next ten years and almost half (44%) said it will boost profits by making their operations more efficient.
The findings come after warnings from the Committee on Climate Change that the UK is in danger of missing carbon reduction targets, and follows a report for the UN in June that said the downturn had done little to dampen global corporate commitment to sustainability.
Ben Dowd, O2 Business Sales Director, said: ‘Our report reveals that success and sustainability go together, but UK executives are facing serious barriers to pushing it up the agenda. With budgets under ever increasing scrutiny, sustainability will only gain real traction in Britain when boardrooms have the tools to prove its commercial benefit. Harnessing state of the art technology is the answer with energy monitoring, and expert consultancy just some of the ways that can give British boardrooms the confidence they need to make sustainability part of their profit improvement plans.’
Commissioned by O2 and authored by The Future Laboratory, the report surveyed executives at companies with turnovers between £50 million and £500 million and includes interviews with leading members of the business and academic communities.
Tom Savigar, the report’s author and director of The Future Laboratory, said: ‘The recession should have prompted all organisations to see opportunities for cost reduction in improving sustainability, but it hasn’t, yet. Sustainability strategies that encompass the environment, governance and society, will come to define growth in the future, but it requires long-term thinking, with the commercial return on investment not realised immediately. There will be those that will be reluctant to take on board a long-termist view; but indecision and hollow sustainability promises will increasingly come under fire from legislators and consumers.’