In the midst of the perhaps biggest environmental catastrophe ever – the oil spill in the Mexican Gulf – sustainability demonstrably rising on the executive agenda provides some inspiration. Even in this economic downturn companies now see the business benefit of ‘going green’ both in terms of bottom line cost reduction opportunities and top line growth. Has the green revolution now really reached the executive boardroom?
A survey (‘Action amidst Uncertainty’) released by Ernst & Young last week indicated CXOs are now serious about riding the green wave. Some 70% of all CXOs participating – three hundred global corporate executives from 16 countries with at least US$1b in annual revenue – indicated to significantly increase spending relating climate spending.
The key 5 take-aways for me from this E&Y survey:
1) Whilst sustainability is getting senior management attention, only in 30% of cases is the role accountable for making sustainability work a full time job. In two third of all companies, the ‘CGO’ (Senior Green Officer) does not report to the CEO (yet).
2) Whilst the western world still predominantly seems to react to the green wave – spurred into action by changing legislation – Asian companies take a far more proactive attitude – thinking (& acting upon) green innovation and sustainable products.
3) The lack of global standards and regulations does not slow climate change investments. Other market drivers, such as equity analysts’ growing interest in climate change performance, equally drives the market to go green. The lack in global standards does not hamper the audit industry either; the majority of surveyed companies (62%) do prefer to have their sustainable progress benchmarked by an independent 3rd party.
4) Two so-called ‘HR-issues’, the lack of required skills and lack of awareness, both would call for a more ‘open’ attitude to solving the green jigsaw puzzle, for instance by adopting social innovation and Enterprise 2.0 strategies in an effort to better assess real needs and wants in the marketplace as well as to build a platform for online co-creation and recruitment. Both inside and outside the enterprise.
5) Whilst 2/3 of companies are involved in active dialogue with suppliers on the sustainability issue, only 1 in 3 companies actively collaborate with their suppliers in order to make tangible green progress. The survey does not mention active involvement with customers surprisingly enough (was it included in the questionaire at all?!). Especially in B2B environments one would expect customer advisory or innovation board to touch upon the green theme.
When are companies like BP finally going to realize that the disciplines of Social | Green | Business are inextricably and increasingly linked? As the E&Y rightly summarizes “Integration is essential for successful execution.“