Less Than a Third of Companies Have Fully Integrated Sustainability Programmes

Fewer than a third of companies have fully integrated sustainability programmes throughout their organisations, according to a new study.

Sustainability programmes have increasingly become a business imperative. They can help reduce carbon footprints and waste, improve brand reputation, and boost employee retention, and ultimately, driving long-term value. Yet a new report by The Conference Board finds that while some progress has been made in integrating sustainability, many companies have an opportunity to better reap the benefits by further developing such programmes. It turns out that less than a third (31%) of sustainability executives report that their organisations have fully implemented corporate sustainability programmes; 48% are in the mid-stage of maturity, while 21% are in the early stage of their sustainability journey.

The report also sheds light on what could be affecting the progress of these programmes. According to 60% of sustainability executives at large US companies, organising and implementing their sustainability strategy is their number-one challenge. Other challenges include embedding sustainability into the corporate culture and communicating their sustainability story to multiple constituencies.

“Creating the right structure to integrate the company’s sustainability strategy into its operations, products, and services – all while coordinating efforts across functions – poses a significant challenge for chief sustainability officers (CSOs). A successful sustainability transformation requires a well-defined plan of action. It should not only set goals but also outline the strategy and the means to achieve such goals,” stated Nathalie Risse, Senior Researcher at The Conference Board ESG Center and author of the report.

NAVIGATING SUSTAINABILITY CHALLENGES

The report offers CSOs and the C-suite insights for navigating organisational challenges related to the sustainability transformations of their companies. The findings come from a survey of more than 100 sustainability leaders – primarily chief sustainability officers and executives with equivalent responsibilities at predominantly large US companies.

The data shows that half of companies are in the mid-stage of integrating their sustainability programmes into their organisations. For example:

• Around 21% of surveyed companies are in the early stage of their sustainability journey. They are in the process of establishing a sustainability strategy and governance structure.
• 48% are in the mid-stage of maturity. They have developed a strategy and are in the process of integrating sustainability throughout their organisations.
• 31% are in the advanced stage. Their strategy is well-implemented throughout their firms.

ROLE OF CSO & SUSTAINABILITY TEAMS

The survey also showed that nine out of 10 sustainability executives anticipate more responsibilities for the CSO in the coming years. In fact, 87% of sustainability executives expect CSOs’ responsibilities to increase in the next 3-5 years. Only 6% expect CSOs’ responsibilities to stay the same, and 2% expect them to decrease.

“Organisations should assess both the existing and future demands on CSOs and incorporate these assessments into strategic planning. They should also secure support from internal ‘allies’ from other departments or functions to reduce CSOs’ overall workload. By doing so, companies can keep the CSO focused on the most critical elements of their sustainability transformation, such as high-priority strategy execution and value creation,” said Matteo Tonello, Managing Director of The Conference Board ESG Center. 

The study also showed that most companies have just recently appointed a CSO. Around seven in 10 (68%) of companies have had a CSO or equivalent for less than five years. Additionally, most sustainability executives expect to continue to grow their sustainability teams. Furthermore, 64% of respondents foresee an increase in the number of full-time employees working on sustainability across their organisation in the next 3-5 years.

“As the demands on sustainability teams continue to grow, it’s important for sustainability departments to prioritise upskilling as a part of their employee development programmes. Equipping employees with new or advanced skills, such as sustainable supply chain management and technologies for optimising sustainability reporting, will enhance the organisation’s sustainability capabilities and performance,” said Lindsay Beltzer, Senior Programme Producer at The Conference Board ESG Center.

SUSTAINABILITY EFFECTIVENESS

Companies are divided on the effectiveness of sustainability programmes, teams, and steering committees, noted the report. It found that effectiveness rating tends to be higher in companies with bigger sustainability teams; sustainability steering committees; and those with a CSO for an extended period. The study showed that:

• Less than half (48%) of surveyed companies believe their sustainability programmes  are Effective/very effective.
• 47% believe they are somewhat effective.

Companies give high marks to the effectiveness of their sustainability teams. This rating tends to be higher when the company has a sustainability steering committee; and the CSO has a longer tenure or reports directly to the CEO. For example:

• 73% of surveyed companies rated their central sustainability teams as effective/very effective:
• 24% rated them somewhat effective.

Sustainability steering committees scored the lowest when it comes to their effectiveness. This rating is often correlated with the tenure of the CSO; the existence of a charter that outlines the committees’ roles and responsibilities; the maturity of the sustainability programmes; and the company size, as larger companies have more resources. For example:

• 46% of surveyed companies rated their sustainability steering committees at the C-suite level as effective/very effective; and 36% for steering committees below the C-suite.
• 12% rated their sustainability steering committees at the C-suite level as somewhat effective: 27% for steering committees below the C-suite.

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