The greatest corporate return on sustainability is in the increased sales from being perceived as sustainable. But most customers aren't willing to pay a lot extra for sustainability. So where's the business case?
A few corporations do have a green consciousness and are willing to take a (small) hit on earnings, but for most it's just lip service. Take away government incentives, and you've got no reason for sustainability.
As someone who prefers to view life from the half-full rather than the half-empty perspective, I am often perplexed by how skeptical the general public tends to be over matters of corporate sustainability. The latest example: A new report out from PR firm Gibbs & Soell — one with the rather Austen-esque title, “Sense & Sustainability Study” — isn’t all that optimistic about whether or not U.S. businesses have a vested interested in “going green.” I’ll admit it: I’m not that optimistic either. The crucial word is “many.” “Some” businesses care about sustainability, not many. On this matter, I am not naive.
Just 16 percent of the 2,600 U.S. adults polled by Harris Interactive, agree with the idea that a majority of businesses are backing sustainability efforts. What’s more, only 29 percent of the roughly 300 Fortune 1000 executives who were surveyed as part of a companion research project also agreed with the idea that most businesses are concerned with corporate sustainability issues.
That means most of us are skeptical about Corporate America’s sustainability agenda.
What’s holding companies back? Approximately 78 percent of the executives surveyed for Gibbs & Soell say there is an insufficient return on investment for green business efforts, while 71 percent says the fact companies can’t raise a price premium for so-called green products or services is a deterrent. The other big sticking point is supply chain issues: in other words, they can’t figure out how to truly measure what sustainability means.
The answer to another question put to the executives is pretty telling: only 12 percent of the responding executives have a senior level executive dedicated solely sustainability, although about 35 percent have some sort of green business or sustainability team — although these people have to layer their environmental duties on top of another job.
Realistically speaking, I don’t think this perception is anything that will change soon — that is, until some company that is truly focused on sustainability starts to really out-perform its rivals and can point to its sustainability efforts as the reason for that success. That’s why I’m keeping close tabs on companies like Walmart or even Timberland that entangling their whole corporate identity with being leaders in this regard. When companies like those start making real progress, then perceptions will shift.
What can we do in the meantime: talk about real successes and avoid greenwashing at all costs. Here’s some insight from Ron Loch, senior vice president of the green tech and sustainability practice for Gibbs & Soell:
“There is a wealth of evidence indicating the business value of pursuing sustainability. This study highlights the need for chief executives to evaluate the messages they are sending and to equip themselves with a communications strategy that addresses their organization’s full range of stakeholders in order to chart a more direct path toward sustainability and business growth.”
