The Ups & Downs of Creating Sustainability

Some buzzwords stick in CEO circles. The word sustainability seems to be one of them lately.

Need proof? Check out this UN Global Compact-Accenture CEO Study on Sustainability 2013. Here's the upside:

  • 93 percent of the 1,000 CEOs in 27 industries surveyed see sustainability as important to the future success of their business
  • 80 percent see sustainability issues as a route to competitive advantage in their industry
  • 78 percent see sustainability primarily as an opportunity for growth and innovation
  • 81 percent of CEOs believe that the sustainability reputation of their companies is important in consumers' purchasing decisions

But, there's a flipside:

  • Only 32 percent of the executives surveyed believe that the global economy is on track to meet the demands of a growing population
  • Only 33 percent report that business is making sufficient efforts to address global sustainability challenges
  • Only 38 percent believe they can accurately quantify the value of their sustainability initiatives
  • 37 percent see the lack of a link to business value as a barrier to accelerating progress
  • 46 percent believe that sustainability issues will always be secondary to traditional factors of price, quality, and availability.

That's a quite a contradiction. CEOs see sustainability as a way to create a competitive business advantage, but can't define the business value. They see it as an important part of there future, but can't quantify the value of their efforts so far.

If the top cheese can't make head or tails of this hot-to-trot buzzword, how are product design, manufacturing, and supply chain teams supposed to deal with these inconsistencies? One day, they are charged with the job of creating supply chains that make the world a better place — from sourcing environmentally-friendly components from conflict-free geographies, to tracking anti-counterfeit parts to reducing carbon emissions at the manufacturing facilities and within their logistics routing. In the same breath, they have to abide to the other important corporate buzzwords known as cost management, product quality, inventory management, and operational efficiency.

Did you just shrug your shoulders? Right, what's a supply chain professional supposed to do? This sounds like being caught between a rock and a hard place.

If there's any reassurance in all this, I guess it will come from the notion that business leaders see the sustainability effort as having reached a plateau; whereas in 2010 executives were more confident in the prospects sustainability would offer, in 2013 they are more reticent and feel limited in how far they could go in the absence of broader alignment between companies, markets, investors, governments, and consumers, according to the survey's accompanying video.

None of this, of course, should imply that the sustainability efforts should be halted. Creating earth-friendly companies — and architecting a better world, as Accenture alludes to in the subtitle of its report — is important work. Really. It is.

Soon enough, mark my words, the word will be buzzing again and executives long with every other part of the business world ecosystem will push companies to finding the balance in the sustainability business case.

How have your company's effort paid off so far? How much further would you like to see your company go?

8 comments on “The Ups & Downs of Creating Sustainability

  1. SP
    October 24, 2013

    Definitely for CEOs, sustai nability is top in the list. But these days its so difficult to sustain , its the age of mergers and acquisitions.

  2. Hailey Lynne McKeefry
    October 24, 2013

    This is certainly one of those easy to say, hard to do things. I think it might be like eating an elephant though: you have to do it one bite at a time. Readers, let us know where your organization started? Is there one thing or one area you chose to concentrate on first?

  3. prabhakar_deosthali
    October 25, 2013

    In my opinion, to be sustainable a company needs to have a niche product and a continuous innovation plan to maintain that niche product still ahead of its competitors.

    The do-it-all approach many times lands companies in trouble so much that it looses the focus on exactly what product it wants to push in the market.

    Once you have the product line well defined , whether it is the local market, suppliers or whether a global outreach makes the best sense or whether it is a combination of the two can well be managed by the supply chain professionals

  4. SunitaT
    October 28, 2013

    Business ethics should be maintained keeping in mind that the only right way is the way that does well in the largest amount to the largest number of people. If CEOs can handle the competition without sustainability, and if it's for the sake of the marketing future, then so be it, as long as customer satisfaction is guaranteed.

  5. apek
    December 5, 2013

    My upcomign EBN article would also solve this problem of sustainability and how to avoid Mergers and Acquisitions leading to better macro-economic growth

  6. Daniel
    December 5, 2013

    “My upcomign EBN article would also solve this problem of sustainability and how to avoid Mergers and Acquisitions leading to better macro-economic growth”

    Apek, M&A will be there as long as there is business. M&A are happening due to various reasons and it's a natural process too.

  7. apek
    December 5, 2013

    Well M&As occur due to un-nforced Anti Trust laws and Monopoly Capitalism

  8. Daniel
    December 8, 2013

    “Well M&As occur due to un-nforced Anti Trust laws and Monopoly Capitalism”

    Apek, I won't think so. For that, competitors have to acquire all companies having similar products or services, which is impossible.

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