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Ethical Corporation’s newly published State of Responsible Business Report found that nearly 71% of corporate CEOs are convinced of the value of sustainability – an increase of 2% on 2015 report. 7% said no their CEO isn’t convinced and a further 22% said they weren’t sure.
It would appear that more CEOs are realising the value in committing to becoming a sustainable business. One would hope this continues as the more companies that have top-level commitment, the more gains will be made in delivering positive impacts on society.
The #ECSORB report, the inaugural edition, interviewed and surveyed over 2,000 professionals within the Ethical Corporation community. It features responses from around the globe from professionals working within brands and NGOs to academia and governments.
86% of all corporate respondents stated that sustainability is becoming an increasingly important part of business strategy.
This disparity between CEO buy-in and value to business strategy could be explained by the fact that 26% of corporate respondents don’t know whether sustainability is driving revenue for their business. Not being able to measure the level to which sustainability is driving revenue will impact a CEOs perception and their communication of its value.
One finding that supports increasing seriousness with which boardrooms treat sustainability is reflected from our respondents on reporting lines. Nearly half (53%) of our corporate respondents said the sustainability team reports to the board or directly to the CEO (32%), an increase of 5% and 3% respectively on last year’s report. It’s plain to see that sustainability is becoming more central to a company’s strategy, and this will continue as consumer demands, regulatory requirements and employee expectations increase.
Not only do CEOs see the value and need for a strategic approach to sustainability, they also feel it’s an area of business that requires direct input and understanding. Sustainability, maybe exclusively within the world of business, has a profound effect on all areas of business from consumer perceptions and supplier relationships to employee motivation and R&D savings. The cross-functional importance and effect of sustainability could explain why CEOs have the reporting lines, to ensure sustainability information is embedded into strategic decision making.
This supported by Malcolm Preston, Global Sustainability Leader, PWC, when commenting in the report: “I welcome this report which gives us a snap-shot of how the Corporate Sustainability agenda is progressing year on year. It broadly confirms what I see in the market – a growing understanding of the issues at Board level and a recognition that incorporating responsible business principles is not a “nice to do”, but a business imperative for the 21st century.”
The State of Responsible Business Report 2016 gives a strong indication that sustainability is becoming central to mainstream business, however it requires accuratement measure and reporting of its impact to convince all areas of business.
The full report is accessible to Ethical Corporation Subscribers. To purchase a Subscription and a copy of this report click here#ECSORB state of responsible business CEO Strategy