From sustainability to business value
We talked to more than 200 US-based executives to hear what they think about sustainability and business value. Here’s what we found out.
Sustainability, in some shape or form, is by now a well-established feature on the US corporate agenda. Yet there’s still a big difference among US companies in terms of the importance and attention given to sustainability over other business priorities.
Done well, sustainability-driven initiatives — improving energy efficiency, rethinking supply chains and even transforming business models — have the potential to drive competitive advantage, innovation and revenue growth. But few companies are realising the full extent of these gains today.
ING interviewed 210 US-based finance executives from sectors including financial services, manufacturing, technology and consumer goods (to name a few). Nearly two-thirds of the companies have revenues between $500 million and $5 billion.
Here are some highlights of what we learned:
- Still early stages for many
Four in five US companies surveyed have formal sustainability strategies in place, and 48% say sustainability concerns actively influence their growth strategies.
Despite this, only a third (34%) say they apply their sustainability strategies throughout their operations, which suggests that many companies are still in the relatively early stages of their sustainability journeys and are taking a fragmented approach to implementation.
- It’s a growth driver
Companies that have done the most to embrace sustainability are more likely to view it as a potential driver of revenue growth. Those less ‘mature’ are more likely to see cutting costs and efficiency gains as the major benefits of sustainability.
- Integrated strategy means revenues rise
The research finds that 87% of US companies with integrated, organisation-wide sustainability frameworks have experienced some level of revenue increase over the past 12 months, compared with only 67% of those with less-integrated sustainability strategies. In addition, 65% of the most mature firms have improved their credit ratings over the past two years, compared with just 51% of the less-mature companies.
- Hard to identify opportunities
For US companies, difficulty identifying sustainability-led business opportunities is cited as the biggest barrier to greater investment in sustainability initiatives (52%). They also want to see more evidence that sustainability-led initiatives deliver real business value before they increase their investment levels.
- Green bond appetite growing in smaller companies
Appetite for green bonds has been strongest among the largest companies, but it is now growing among smaller ones. Larger US companies have issued the majority of green bonds over the past two years: 48% with more than $10 bln in revenue have done so, compared with only 32% of those with less than $10 bln revenue. However, 37% of smaller companies plan to issue green bonds in the coming two years.
For more information about the Sustainability Study, feel free to contact us.