Report: Sustainability Gains Traction Among Executives
Amidst the backdrop of unprecedented high temperatures and a surge in climate-related disasters, a notable transformation is underway in corporate mindsets, with three times as many executives across various sectors now recognising the compelling business case for sustainability compared to the previous year.
This revelation stems from the latest findings in the 'A World in Balance 2023' report by the Capgemini Research Institute. Despite this positive trend, the report underscores the necessity of elevating investment levels to ensure tangible outcomes.
The second-year iteration of the report reveals a substantial shift, with 63% of executives concurring that the business case for sustainability is unequivocal—a stark increase from a mere 21% in the summer of 2022.
Additionally, the proportion of executives viewing sustainability initiatives as financially burdensome has dwindled from 53% to 22%. The escalating frequency and cost of extreme weather events worldwide are significant factors contributing to this shift in perspective. Regulatory pressures and the anticipation of a return on investment are identified as pivotal motivations for embracing environmental and social sustainability strategies, with 74% of executives aspiring to boost future revenue.
While organisations are making strides in defining their sustainability roadmaps, with 61% having identified a priority list of initiatives for the next three years, the report points out a potential shortfall without increased investment.
Unfortunately, the average annual investment in environmental sustainability initiatives has only marginally increased by 0.01 percentage point compared to the previous year. Moreover, the report highlights persistent deficiencies in reporting, particularly in measuring and collecting scope 3 emissions. The ability to measure and collect data on scope 1 and 2 emissions has remained stagnant, while for scope 3 emissions, there has been a decline from 60% in 2022 to 51% in 2023.
Cyril Garcia, Head of Global Sustainability Services and Corporate Responsibility, emphasises the urgency for companies to invest in future-proof sustainability measures and pivot their business models. He asserts that organisations must prioritise sustainability in their strategies to reap the long-term benefits, given the pressing consequences of climate change.
The report further unveils a growing focus on the social dimension of environmental, social, and corporate governance (ESG), with 56% of executives noting an increased emphasis on the well-being of their own employees. However, there is room for improvement in supporting workers in the supply chain, as only 38% of executives exclusively collaborate with suppliers who provide a living wage.
A significant perception gap is identified between executives and consumers regarding greenwashing, with 33% of consumers globally suspecting organisations of greenwashing, in contrast to only 17% of executives acknowledging consumer concern. Notably, Generation Z exhibits higher scepticism (50%) compared to boomers (18%), and a substantial percentage of consumers (49%) express limited trust in environmental claims about their potential purchases.
Looking ahead, organisations are placing their bets on digital technology, particularly generative AI, to advance their sustainability goals, with 59% of executives foreseeing a key role for generative AI in their sustainability transformation efforts. Simultaneously, 57% of executives report that their organisations have initiated measures to mitigate the environmental impact of employing generative AI models.
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