New IBM study spotlights sustainability as a critical business imperative
by Matt Davies
March 5, 2024
Businesses that have embedded sustainability within their operations are seeing better sustainability and financial outcomes, a new global study by the IBM Institute for Business Value found, also exposing challenges faced by organizations in funding sustainability initiatives.
There is no quick fix. Sustainability requires intentionality and a shared corporate vision
For the study, called “Beyond checking the box – how to create business value with embedded sustainability,” IBM surveyed 5,000 C-suite executives from around the world. Here’s what these leaders reported.
In the pursuit of sustainable business strategies, a majority of organizations acknowledge the importance of sustainability; however, the study reveals a significant gap between recognizing its significance and executing impactful strategies.
Despite a commendable increase from 10% to 30% in the number of executives claiming progress in sustainability strategy execution, the transition from aspirations to tangible impact remains a stumbling block.
One of the major hurdles identified is the struggle to secure funding for sustainability investments, with 47% of surveyed executives saying they face this challenge. Meanwhile, 60% report making trade-offs between financial and sustainability outcomes.
Organizations that weave sustainability into their core operations showcase superior outcomes. The study underlines that such enterprises are 75% more likely to witness improved revenue from sustainability efforts and 52% more likely to outperform peers on profitability. The key takeaway is that integrating sustainability into day-to-day operations yields not only positive environmental impacts but also financial benefits.
The study also sheds light on a common trend where organizations prioritize complex reporting requirements over actual business value. Alarmingly, spending on sustainability reporting surpasses investments in sustainability innovation by 43%, indicating a misplaced focus on compliance rather than genuine progress.
“An organization’s approach to sustainability may be holding it back. There is no quick fix. Sustainability requires intentionality and a shared corporate vision,” said Global Managing Partner of Sustainability Services at IBM Consulting, Oday Abbosh.
“Sustainability needs to be part of the day-to-day operations, not viewed only as a compliance task or reporting exercise. By embedding sustainability across their business, organizations are more likely to drive internal innovation, attract and retain skilled talent, and be better positioned to deliver both positive environmental impact and financial outcomes,” Abbosh added.
Despite the identified challenges, the study indicates a positive outlook for the integration of artificial intelligence (AI) in sustainability efforts. Executives recognize the potential of generative AI, with 73% planning to increase their investments in this area. The integration of AI is expected to supercharge sustainability initiatives and contribute to overcoming existing barriers.
In conclusion, the IBM study highlights the urgency for organizations to align sustainability objectives with their business strategy, demonstrating the benefits of doing so.
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This article was originally published on IMPAKTER. Read the original article.