Just 4% business revenue goes to sustainability efforts

A new study from experience innovation consultancy Designit has revealed that ‘laggard’ leadership teams in businesses across the globe are failing to address sustainability, despite every impetus to act.

In the worst cases, 11 per cent of international businesses consider sustainability at board level only once each year. This compares to those companies deemed ‘leaders’ in sustainability that constantly review their strategies, with 78 per cent always including it on their quarterly boardroom agendas.

The Designit findings, compiled from 1,000 sustainability professionals with an influence on responsibility/accountability for sustainability, ESG, or corporate responsibility within large organisations, reveal that the most advanced businesses are much better at partnering and collaborating for greater value.

These businesses experience more benefits for their sustainability efforts, and reference profitability as a driver for sustainability almost twice as much as the least advanced businesses (70% and 38%, respectively).

Furthermore, CEOs at the most advanced businesses - those classified as ‘leaders’ - are 50 per cent more likely to have ultimate responsibility for sustainability, while ‘laggards’ are twice as likely to allocate ultimate sustainability responsibility to someone in a CSR role.

By covering all levels of maturity in corporate sustainability practices, the Leaders and Laggards analysis assesses the behavioural and attitudinal distinctions between the most advanced businesses (‘leaders’ representing 12% of the total respondent size), and those falling behind (15% are ‘laggards’).

Miguel Sabel Pereira, Designit’s European Head of Sustainability said, “our findings show that all businesses, no matter where they stand on the road to improved environmental practices - face multiple internal and external challenges that design-led innovation is specially prepared to tackle.”

Half (49%) of all businesses state that having too much data to make sense of, or not having the right data, is the biggest single barrier to sustainability. However, the figure is more pronounced for ‘leader’ businesses than ‘laggards’ (58% vs 43%).

Meanwhile, more than half (54%) of all businesses have difficulty in integrating sustainability innovation into products - and on average they spend only 4 per cent of their revenue on sustainability.

And although most companies (63%) state that rising costs are the biggest external barrier to sustainability, unclear government guidelines are also rated as one of the most challenging roadblocks (47%), alongside geopolitical instability (43%), and technological constraints (42%).

Miguel added, “our research shows how hard it can be for many businesses to turn ambition into progress on sustainability. Yet crucially, it also shows what the most advanced businesses are doing. It showcases what effective corporate behaviours look like in a way that those trailing behind can adopt.

“What really sets the most advanced businesses apart is an innovative approach to sustainability. They are intent on consistently and holistically applying strategic design innovation until it forms part of the organisation’s DNA and extends into its wider value chain.

“This has allowed them to reimagine their value to society and the environment, places sustainability at the core of their proposition, and empowers people's potential in driving sustainable value. It’s a template others can and should adopt if we’re to see wholesale change across the world of business.”

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