Chief executives globally are more convinced than ever of the need to embed environmental, social and corporate governance issues within their core businesses.
The imperative to act is moving from moral to business case, according to the findings of the largest-ever global survey of CEOs on their sustainable business views and practices.
In many ways it mirrors the values of New Zealand business decision-makers.
The latest report by Accenture for the UN Global Compact business group should send chill through the large numbers of New Zealand businesses which think they are behaving sustainably (62 percent) – and the number who actually have sustainable development strategy (38 percent).
The latest nationwide ShapeNZ-Fairfax survey of New Zealand businesses on sustainable practice, finds 75 out of every 100 senior executives and New Zealanders overall believe businesses should make profit and contribute to the social good.
This translates into 25 percent actively buying goods and services for their organisations from suppliers who act sustainably. Only 29 percent say they don’t care who supplies goods and services, provided they are at the best price. Another 44 percent say they practise something in-between these two options. So between 25 and 69 percent of all business people buying in New Zealand will be saying to themselves “The price might be right, but…”
They know that the damage to reputation, sales, and ability to attract and keep valuable skilled staff depends on their organisation behaving properly toward the environment and the society they live in.
The Global Compact business group says: “It is decade that CEOs believe could usher in new era where sustainability issues are fully integrated into all elements of business and market forces are truly aligned with sustainability outcomes. Conversations conducted as part of this landmark study make clear that today’s CEOs are more convinced than ever of the need to embed environmental, social and corporate governance issues within core business… The imperative to act has shifted from moral to business case. Furthermore, executives see significant progress in executing their plans to integrate sustainability.”
Here are Global Compact’s findings:
• 93 percent of CEOs believe that sustainability issues will be critical to the future success of their business.
• 72 percent cite “brand, trust or reputation” as one of the top three factors driving them to take action on sustainability issues.
• 58 percent identify consumers as the most important stakeholder group that will impact the way they manage societal expectations. Employees were second with 45 percent.
• 91 percent report that their company will employ new technologies to address sustainability issues over the next five years.
• 96 percent believe that sustainability issues should be fully integrated into the strategy and operations of company.
• 49 percent cite complexity of implementation across functions as the most significant barrier to implementing an integrated, company-wide approach to sustainability.
Here and abroad the worst recession in 81 years has barely dented support for sustainable practice. In New Zealand, only three percent more businesses are buying on price alone.
Globally chief executives see sustainability as one area where doing the right thing is helping reduce costs and lift profits when revenue is hardly moving. Here companies are adding millions to their bottom lines from measuring and managing emissions – which leads them to plans to cut energy, water, travel and other costs. At the same time it cuts waste and emissions and boosts the use of smarter technology.
For business, sustainability is about getting balance between profit, people and the planet.
Just know that when you go to do deal in New Zealand you’ll have to come up with something better than sharp price with 71 out of every 100 of the people you want to sell to.
Buying cheaply without regard for your community or our quality of life will get you expensively offside with 75 out of every 100 New Zealanders.
Peter Neilson is chief executive of the New Zealand Business Council for Sustainable Development.
www.nzbcsd.org.nz, www.shapenz.org.nz
