Three-quarters (76%) of executives surveyed agree that sustainability is at the heart of their company's business, yet almost half (47%) say they struggle to fund sustainability investments.
– Organisations that embed sustainability throughout their operations are more likely to realise financial benefits, yet only 31% of respondents reported significantly incorporating sustainability data and insights into operational improvements.
February 28, 2024
Armonk, New York, February 28, 2024 /PRNewswire/ — A new global study from the IBM (NYSE: IBM) Institute for Business Value finds that while the majority of organizations recognize sustainability as important to their business strategy, many executives struggle to invest in sustainability. Data collected from 5,000 executives globally highlights that organizations that embed sustainability into their business operations experience better sustainability and financial results while spending less than other organizations.
the study*, “Beyond checking the box – how to create business value that incorporates sustainability The research finds that nearly a third (30%) of executives surveyed say they have made significant progress in executing their sustainability strategies, up from 10% a year ago, but translating ambition into results remains a challenge. Nearly half (47%) of executives surveyed struggle to fund sustainability investments, and six in 10 say they have to make trade-offs between financial and sustainability outcomes.
Organizations that deeply embed sustainability into their operations see notable differences in outcomes compared to those that focus only on areas such as regulatory reporting or sustainability as a corporate project: Organizations that embed sustainability are 75% more likely to see significant revenue improvements as a result of their sustainability efforts and 52% more likely to outperform their peers in profitability.
Survey results suggest that many organizations are focused on managing complex and diverse reporting requirements rather than on real business value and outcomes. The survey found that spending on sustainability reporting exceeds spending on sustainability innovation by 43%. Only 31% of executives surveyed say they are significantly incorporating sustainability data and insights into operational improvements, and only 14% say they are incorporating them into innovation initiatives.
“Your organization's sustainability efforts may be holding it back. There are no quick fixes; sustainability requires intentional effort and a shared corporate vision.” Odey AboshGlobal Managing Partner, Sustainability Services, IBM Consulting. “Sustainability needs to be part of everyday operations, not just a compliance or reporting task. By embedding sustainability throughout the business, organizations are more likely to drive internal innovation, attract and retain skilled talent, and achieve both positive environmental impact and financial results.”
Other key findings include:
While organizations continue to strive for sustainability, fundraising, acquiring skills and implementing activities remain challenges.
- 75% of executives surveyed agree that sustainability leads to improved business outcomes, and 76% agree that sustainability is central to their business strategy.
- At the same time, 69% of executives surveyed said sustainability needs to be made a greater priority within their organizations.
- 82% of executive respondents agree that high-quality data and transparency are necessary to achieve sustainability outcomes, yet only around four in 10 organizations have the ability to automatically capture sustainability data from any of their core systems: ERP (finance, HR, supply chain), enterprise asset management, CRM, energy management systems or facilities management systems.
- Thirty-nine percent of executives surveyed also cited a lack of necessary skills as the biggest barrier to sustainability progress.
Even though most organizations have not yet incorporated sustainability into their innovation efforts, leaders are hopeful that generative AI can help them strengthen sustainability efforts.
- 64% of executives surveyed agree that generative AI will be important to sustainability efforts.
- 73% say they plan to increase investment in generative AI for sustainability.
Organizations that deeply embed sustainability into their operations reap the benefits of translating sustainability efforts into business value.
Further analysis of the survey data revealed the following:
- Organizations that embed sustainability spend slightly less on dedicated sustainability initiatives as a percentage of revenue compared to organizations that do not.
- 53% of these organizations say business benefits are essential to justify investing in sustainability; only 17% say achieving sustainability goals is enough in itself to justify the investment.
- These organizations are also 191% more likely to have significantly aligned their data and sustainability strategies, and 80% more likely to be significantly using AI for sustainability.
Beyond checking the box – how to create business value with sustainability built in It highlights the urgent need for organizations to integrate sustainability goals into their business strategies and apply technologies such as AI to realize greater progress and profitability. The study also serves as a resource for business leaders, outlining practical strategies to assist companies with their data, business integration and decision-making challenges.
To read the full survey, please visit: https://www.ibm.com/thought-leadership/institute-business-value/en-us/report/sustainability-business-value
*research method
The study is based on a survey of 5,000 C-level executives across 22 industries and 22 countries, conducted by the IBM Institute for Business Value in collaboration with Oxford Economics. In addition to descriptive analysis, data from respondents was analyzed to enable segmenting the sample according to the extent to which sustainability is embedded in their companies. Based on this segmentation, an analysis was conducted on differences in sustainability and business outcomes, operational practices, and approaches that enable sustainability progress.
IBM's thought leadership think tank, the IBM Institute for Business Value, combines global research and performance data with the expertise of industry thinkers and leading academics to deliver insights that make business leaders smarter. To learn more about our world-class thought leadership, visit www.ibm.com/ibv.
About IBM
IBM is a leading global provider of hybrid cloud, AI and consulting expertise. We help clients in more than 175 countries use data insights to streamline business processes, reduce costs and gain a competitive edge in their industries. Thousands of government agencies and enterprises in critical infrastructure sectors, including financial services, communications and healthcare, rely on IBM's hybrid cloud platform and Red Hat OpenShift to drive digital transformation quickly, efficiently and securely. IBM's breakthrough innovations in AI, quantum computing, industry-specific cloud solutions and consulting provide clients with open and flexible options. All of this is backed by IBM's long-standing focus on trust, transparency, responsibility, inclusion and service. For more information, visit www.ibm.com.
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