Global c-suite struggling to fund sustainability investments

While a majority of organisations globally recognise sustainability as important to their business strategy, many c-suite leaders are struggling to fund their sustainability investments, according to a global study by the IBM Institute for Business Value. The study of 5,000 global c-suite executives revealed that almost a third (30%) said they have made significant progress in executing their sustainability strategy, up from 10% a year ago, but almost half (47%) of executives said they struggle to fund sustainability investments, with six in ten saying they have to make trade-offs between financial and sustainability outcomes. The survey, Beyond checking the box – how to create business value with embedded sustainability, found that organisations that embed sustainability within their operations see better sustainability and financial outcomes, while spending less money than their peers. “Organisations that embed sustainability more deeply into their operations show a marked difference in outcomes from enterprises with a singular focus on areas such as regulatory reporting or sustainability as a corporate project. Organisations that embed sustainability are 75% more likely to attribute greater improvement in revenue from their sustainability efforts, and are 52% more likely to outperform their peers on profitability,” the IBM study found. The IBM Institute for Business Value said the findings indicate that many organisations are focused on managing complex, varied reporting requirements rather than real business value and results. The study found that spending on sustainability reporting exceeds spending on sustainability innovation by 43%. Only 31% of executives surveyed report they are incorporating sustainability data and insights into operational improvements to a great extent, while 14% say they do so with innovation initiatives. “An organisation’s approach to sustainability may be holding it back. There is no quick fix. Sustainability requires intentionality and a shared corporate vision,” said Oday Abbosh, global managing partner, sustainability services, IBM Consulting. “Sustainability needs to be part of the day-to-day operations, not viewed only as a compliance task or reporting exercise. By embedding sustainability across their business, organisations are more likely to drive internal innovation, attract and retain skilled talent, and be better positioned to deliver both positive environmental impact and financial outcomes.” The survey found that 75% of executives surveyed agree that sustainability drives better business results, and 76% agreed that sustainability is central to their business strategy. At the same time, 69% of executives surveyed said that sustainability needs to be a higher priority in their organisation. While 82% of executive respondents agreed that high-quality data and transparency are necessary to achieve sustainability outcomes, only about four in ten organisations can automatically source sustainability data from any of the following core systems: ERP (finance, HR, supply chain), enterprise asset management, CRM, energy management systems, facilities management systems. The study also revealed that 39% of executives surveyed cite a lack of requisite skills as the top barrier to sustainability progress. “The survey underscores the urgent need for organisations to integrate sustainability objectives within business strategy and apply technologies like AI to realise greater progress and profitability,” said IBM.

Global c-suite struggling to fund sustainability investments

Study highlights importance of sustainability but funding a challenge

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