How companies manage sustainability: McKinsey Global Survey results

According to the McKinsey global survey, more than 50 percent of 1,946 executives representing different industries and regions, consider sustainability – the management of environmental, social and governance issues – “very” or “extremely” important in a wide range of areas, including new-product development, reputation building and overall corporate strategy.

Companies engagement in sustainability
Given sustainability’s importance, it’s surprising that only 27 percent of respondents say their CEOs or other C-level executives run their companies’ sustainability initiatives on a day-to-day basis. Thirty-one percent say business units or functional managers take on this responsibility and 25 percent say their corporate social responsibility department do so.

Around 20 percent of executives say their companies don’t engage in sustainability efforts. One potential reason is that many have no clear definition of it.  Among those that do, their definition varies but the majority clearly sees sustainability as creating real value.

Uneven management efforts

Despite sustainability’s importance to various corporate activities, only 25 percent of executives say it’s a top-three priority on their CEOs’ agendas. The lack of weight in leadership’s top agenda shows in the relatively small number of activities companies actually pursue related to sustainability: only 28 percent agree that their companies actively seek opportunities to invest in sustainability, 29 percent indicate that sustainability is integrated into their companies’ business practices and a mere 16 percent say their companies actively shape relevant regulation.

What the proactive do differently
Other findings indicate how much sustainability is a part of the fabric of these companies. Their executives, for instance, are more aware than executives at other companies of the metrics their companies track. For example, 84 percent of respondents at engaged companies are aware of whether their companies measure their carbon footprint, compared with 40 percent of respondents at less engaged companies.

Dealing with regulation
Regulation, particularly environmental regulation, can have a very strong effect on companies’ sustainability activities. However, only about 35 percent of executives say their companies have quantified the potential impact of environmental and social regulation on their business; only 40 percent feel prepared to deal with regulation in the next three to five years and are personally confident about handling climate change issues.

Read the full article on McKinsey Quarterly