Summary of Report’s Introduction, MIT Sloan Management Review and Boston Consulting Group, May 23, 2017
In the final annual report of an 8-year study, we see that corporate sustainability finds itself at a sort of crossroads. As companies continue to demonstrate workable and profitable sustainability strategies, current sociopolitical upheaval is a threat to reverse key gains made.
Today, companies demonstrate a much higher level of commitment to corporate sustainability than has existed in the past. 9,000 companies have joined the UN Global Compact committing to 10 sustainability principles since it was established in 2000. 74% of the world’s largest companies now track and report their sustainability performance using the Global Reporting Initiative process. Corporate sustainability is no longer a marginal or money-losing set of activities.
A vast network of tool makers and platforms now exist to spur and aid sustainable business practices. One trend is that companies, as well as value chain partners, have become much more transparent about sustainability-related activities. Another trend is companies or nations working together to set new goals and standards for sustainable business practices, including the Sustainability Consortium’s commitment to sustainability guidelines for products and supply chains, and the 2016 landmark agreement between 195 countries to set limits on greenhouse gas emissions beginning in 2020.
At the same time, trust in government institutions decreasing and there has been an increase in populist anti-regulatory agendas, particularly in the U.S. The potential for corporate sustainability to lose momentum is real. To avoid backslide, companies need to increase sustainability efforts and resist anti-regulatory incentives that tempt company leaders to scale back efforts.
The report assesses the emergence of corporate sustainability across industries and identifies evidence-based strategies for accelerating a company’s sustainability progress, which include:Articulating a practical sustainability vision and ambition that lays the foundation for new business practices.
- Identify and prioritizing material issues to focus resources.
- Embedding sustainability organizationally through cross-functional teams, clear targets, and key performance indicators.
- Innovating on multiple dimensions of your business model.
- Developing a clear business case.
- Getting the support of the board of directors.
- Communicating a value-creation story to shareholders.
- Collaborating with a variety of stakeholders to drive strategic change.
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