Global study reveals just 4% of business revenue goes to sustainability efforts
Global research exposes gap between businesses spearheading positive change and those stalling for time in new study of corporate behaviours to tackle climate crisis
● 11% (one in nine) leadership teams only look at sustainability once a year
● Companies spend an average of 4% of revenue on sustainability
● Half of all businesses state that having too much data to make sense of, or not having the right data, is the biggest single barrier to sustainability
● ‘Laggard’ companies are more likely to have responsibility for sustainable practices fall to a CSR role, whereas ‘leaders’ make it the CEO’s responsibility
A new study from experience innovation consultancy Designit reveals that ‘laggard’ leadership teams in businesses across the globe are failing to address sustainability, despite every impetus to act.
In the worst cases, 11% of international businesses consider sustainability at board level only once each year. This compares to those companies deemed ‘leaders’ in sustainability that constantly review their strategies, with 78% always including it on their quarterly boardroom agendas.
The Designit findings, compiled from 1,000 sustainability professionals with an influence on or responsibility/accountability for sustainability, ESG or corporate responsibility within large organisations, reveals that the most advanced businesses are much better at partnering and collaborating for greater value.
These businesses experience more benefits for their sustainability efforts, and reference profitability as a driver for sustainability almost twice as much as the least advanced businesses (70% and 38%, respectively).
Furthermore, CEOs at the most advanced businesses – those classified as ‘leaders’ – are 50% more likely to have ultimate responsibility for sustainability, while ‘laggards’ are twice as likely to allocate ultimate sustainability responsibility to someone in a CSR role.
By covering all levels of maturity in corporate sustainability practices, the Leaders and Laggards analysis assesses the behavioural and attitudinal distinctions between the most advanced businesses (‘leaders’ representing 12% of the total respondent size), and those falling behind (15% are ‘laggards’).
“Our findings show that all businesses – no matter where they stand on the road to improved environmental practices – face multiple internal and external challenges that design-led innovation is specially prepared to tackle,” says Miguel Sabel Pereira, Designit’s European head of sustainability.
Hurdles to sustainable progress
Half (49%) of all businesses state that having too much data to make sense of, or not having the right data, is the biggest single barrier to sustainability. However, the figure is more pronounced for ‘leader’ businesses than ‘laggards’ (58% vs 43%).
Meanwhile, more than half (54%) of all businesses have difficulty in integrating sustainability innovation into products – and on average they spend only 4% of their revenue on sustainability.
And although the majority of companies (63%) state that rising costs are the biggest external barrier to sustainability, unclear government guidelines are also rated as one of the most challenging roadblocks (47%), alongside geopolitical instability (43%), and technological constraints (42%).
The study’s far-reaching findings also reveal:
● All companies leading in sustainability consider themselves to be purpose-led, and they are more likely to be headquartered in Europe
● Purpose-driven leaders’ desire to do good extends far beyond their own organisation – they proactively develop industry standardised practices and approaches to tackling carbon emissions
● Purpose-driven leaders are also committed to sustainability: 8 in 10 will even go as far as collaborating with other companies in their industry to solve the world’s most pressing sustainability problems
Designit hopes that highlighting the behaviours of leaders against laggards can lessen the gap between the two and allow less advanced businesses to design effective sustainable transitions that move beyond the superficial. This entails applying strategic design across the entirety of a business, from organisational structure to product development.
Miguel continues: “Our research shows how hard it can be for many businesses to turn ambition into progress on sustainability. Yet crucially, it also shows what the most advanced businesses are doing. It showcases what effective corporate behaviours look like in a way that those trailing behind can adopt.
“What really sets the most advanced businesses apart is an innovative approach to sustainability. They are intent on consistently and holistically applying strategic design innovation until it forms part of the organisation’s DNA and extends into its wider value chain.
“This has allowed them to reimagine their value to society and the environment, places sustainability at the core of their proposition, and empowers people’s potential in driving sustainable value. It’s a template others can and should adopt if we’re to see wholesale change across the world of business.”
