At the start of the pandemic, reports rolled in about the positive impact the global lockdown was having on the environment, from improved air quality to clearer water. Yet, while sustainability dominated the headlines, it didn’t transfer into boardrooms, as businesses went into survival mode and priorities changed.
This continued through 2021, as new variants of coronavirus created more uncertainty; so even though businesses saw sustainability as strategically important, many continued struggling to drive action in this area.
As our Fit for the Future report shows, customers want to do business with responsible organisations which means it’s time for businesses of all sizes to embrace the Environmental, Social, and Governance (ESG) agenda and move toward more sustainable business practices.
Having a sustainability mindset
Pressure isn’t just coming from consumers. Regulators and investors are increasingly expecting businesses to quantify and disclose their progress and document the benefits such measures are generating for the planet and society1 . And in Europe, there are warnings of a crackdown on greenwashing2 .
For businesses to stay competitive, they need to start thinking about how to tackle this problem today for the world of tomorrow. Some organisations are already doing this. We call them ‘fit for the future’.
Confident and well-prepared for emerging challenges, 38% of these businesses go so far as to say sustainability is absolutely necessary for their organisation to continue to operate; this falls to just 21% amongst businesses overall.
As a result of the pandemic, sustainability has become more important to ‘fit for the future’ companies and this mindset is leading to action. ‘Fit for the future’ businesses are far more likely to have an ESG programme in place and are planning to invest more in this area in the year ahead.
From actively trying to limit harmful pollutants and utilising renewable energy sources where possible, to producing or using products and packaging that can be recycled and putting environmentally friendly company travel policies in place.
Keeping up with the customer
It’s not just between ‘fit for the future’ businesses and all businesses where we see a difference.
Many smaller businesses haven’t recognised sustainability as an important strategic goal and only a third have formal ESG or corporate social responsibility (CSR) plans in place, compared to two thirds of larger businesses. The stats around investment and action in this area tell a similar story. Yet, 68% of small businesses tell us that their customers want them to have a clear ethical stance on social issues.
If organisations want to compete and win customers in the future, investing more to increase their ESG scores now will subsequently improve their credibility on issues that will only become more urgent in the years to come.
From providing real-time responses to ensuring sustainability, ‘fit for the future’ organisations are better prepared to meet these demands and are positively impacting society and evolving with their customers, resulting in greater business performance and customer value.
