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Sustainability Nears a Tipping Point

December 15, 2011 | David Kiron, Nina Kruschwitz, Knut Haanaes, Ingrid von Streng Velken | Social Responsibility

MIT Sloan Management Review and the Boston Consulting Group recently conducted their third annual sustainability survey of executives and managers worldwide. The survey results indicate that an increasing number of managers and companies are taking sustainable business practices seriously.
According to the survey data, 70% of companies that have placed sustainability on their management agenda have done so in the past six years, and 20% have done so just in the past two years. Two-thirds of respondents said that sustainability was critically important to being competitive in today’s marketplace, up from 55% in the 2010 survey. And despite ongoing economic uncertainty, many companies are increasing their commitments to sustainability initiatives. In fact, 31% of respondents said their companies are profiting from sustainable business practices.
Some of the interest can be explained by increasing pressure, internally and externally. Among the external factors are stakeholder groups–including investors–and also regulations, climate change, resource constraints and consumer demand. Internal demands for brand integrity, employee engagement and increased efficiencies play a part as well. But the recent increase in the business focus on sustainability may also be because we are nearing a “tipping point” at which a critical mass of companies is taking sustainability seriously.
Survey and interview data identified companies that are profiting from sustainability, which the authors termed “Harvesters.” Harvesters are 50% more likely to have a CEO with a strong commitment to sustainability, and nearly two and a half times as likely to have a chief sustainability officer. They are also more likely to be involved in external collaborations. Starbucks, for example, brought in representatives from its entire supply chain, government officials and an MIT professor in order to develop a detailed assessment of and life-cycle analysis for take-out coffee cups.

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