What Are the Key Sustainability Trends to Expect?

Sustainability
January 14, 2020
By Laurie Toupin

As a new year begins, surveys abound with what happened during 2019 and what people expect from the yet unscripted 2020. Everything from the top musical hits, movies, fashion, and of course, business practices, are polled and published.

For the latest in environmental sustainability trends, look no further than “The State of Sustainable Business 2019: Results of the 11th Annual Survey of Sustainable Business Leaders,” as seen by BSR members and recorded by GlobeScan.

The results are based on the responses of 125 BSR global member companies. The data was collected entirely online from June to September 2019. Industries include, but are not limited to, consumer products and retail, healthcare, heavy manufacturing, energy, and travel.

Mixed Results

Climate change now takes lead role in business priorities, pushing ahead of such issues as ethics/integrity, diversity/inclusion, and human rights.

Reputational risks and customer/consumer demand are still important drivers of company sustainability efforts. However, because of growing shareholder activism and consumer awareness, the importance of investor interest increased substantially in 2019. It is up 25% from 2018.

Given the emphasis on the issue, however, only about half of the companies surveyed are pursuing the integration of sustainability into strategic planning, products and services.

Although CEOs are interested in the issue and are increasingly more vocal about it, few companies are providing any financial incentive to them to pursue solutions.

And even though sustainability is reported to be “fairly well” integrated in two-thirds of the companies polled, this number hasn’t changed since 2016.

Communication

To have the most positive impact for business, good communications is key. However, only four in ten companies report success in communicating sustainability to customers/consumers.

While many struggle with this, communication largely depends on a company’s clients. Business-to-consumer sectors, for example, find it more challenging to communicate their sustainability efforts than business-to-business companies.

Communications to stakeholders are a bit easier. Six in ten companies believe that they have been fairly effective in publishing their sustainability efforts to stakeholders. Although larger companies, with revenues above $50B, appear to have an easier time than smaller companies with revenues below $10B.

Changing Priorities

Sustainability has changed corporate priorities. Fewer companies are committing to reduce inequalities and end poverty, for example. Companies prefer to concentrate on climate action, responsible consumption, decent work, gender equality, and economic growth.

In addition, fewer companies are looking to emphasize long-term value creation. Related to this, few companies are looking to future scenario planning to help their longer-term view.

There is also a low emphasis on influencing policy frameworks, which the authors of the report find puzzling “given the urgency of achieving sustainability goals and the important role of business in influencing relevant policies.”

Supply Chain

For the question “How much, if at all, does your company focus on Inclusive Economy, Supply Chain Sustainability, Climate Change, Human Rights, or Women’s Empowerment through each element of the value chain”, companies reported finding it extremely challenging, especially regarding Tier 2+ suppliers.

More than half of companies place a high priority on an inclusive economy. This trend has been ongoing, with the exception of 2017, when there was a sharp decline. Although according to the report, the decline “was not a de-prioritization of inclusive economy, but a more purposeful response from some companies to trends such as Brexit and the US election.”

Supply chain sustainability efforts still leave a lot to be desired. Only half of the companies feel their efforts have been successful. Those that are successful felt that implementing new technology such as blockchain helped tremendously.

The emphasis on climate change emerged from the pack as it made a significant jump over the previous year. More than 50% of respondents cited it as a “very significant” priority over the coming year. Company leaders plan to explore how they can move toward net-zero carbon emissions, while also assessing their climate risk scenarios.

About half of the companies surveyed are addressing human rights beyond their own operations and Tier 1 supply chain. Other important factors, such as product and service use, are lagging behind.

An interesting fact about human rights: “…just over four in ten believe that disruptive technology will affect their company’s human rights impacts,” while “almost a third do not know or do not believe that it is applicable to them.”

And while not a lot of emphasis was placed on women empowerment, “women make up the majority of workers in many global supply chains” and are the main consumers of many of the products.

Future Endeavors

When discussing sustainability strategy milestones, 2020 seemed like a worthy goal five or ten years ago to achieve key objectives. More than eight in ten companies surveyed reported that they were at least fairly successful in realizing those ambitions. Although “fairly successful” is the key phrase here.

“In 2018, 41% of respondents indicated that there had been ‘no change to our approach.’ In 2019, this has dropped significantly to 23%. All actions have seen a slight (but not statistically significant) increase in proportion”, the report says.

We all know the importance of sustainability and are witnessing first-hand the impact of climate change.

It is helpful to look at what other companies are doing also.

But, perhaps the most significant thing is to look at what your company is doing to promote sustainability in your industry, community and the future.

For a copy of the report, go to https://www.bsr.org/reports/BSR-Globescan-State-Sustainable-Business-2019.pdf

Author

Laurie Toupin