- Three-quarters (76%) of surveyed executives agree that
sustainability is central to their business, but nearly half (47%)
say they struggle to fund sustainability investments
- Organizations that embed sustainability throughout the
business are more likely to see financial benefits, yet only 31% of
respondents report they incorporate sustainability data and
insights into operational improvements to a great extent
ARMONK,
N.Y., Feb. 28, 2024 /PRNewswire/ -- A new global
study by the IBM (NYSE: IBM) Institute for Business Value found
that while a majority of organizations recognize sustainability as
important to their business strategy, many C-suite leaders are
struggling to fund their sustainability investments. Data collected
from 5,000 global C-suite executives highlighted that organizations
that embed sustainability within their operations see better
sustainability and financial outcomes, while spending less money
than their peers.
The study*, "Beyond checking the box – how to create business
value with embedded sustainability," revealed that almost
one-third (30%) of executives surveyed say they have made
significant progress in executing their sustainability strategy –
up from 10% a year ago – but turning ambitions into impact remains
a challenge. Almost half (47%) of executives surveyed struggle to
fund sustainability investments; six in 10 say they have to make
trade-offs between financial and sustainability outcomes.
Organizations that embed sustainability more deeply into their
operations show a marked difference in outcomes from enterprises
with a singular focus on areas, such as regulatory reporting or
sustainability as a corporate project. Organizations that embed
sustainability are 75% more likely to attribute greater improvement
in revenue from their sustainability efforts, and are 52% more
likely to outperform their peers on profitability.
The findings indicate that many
organizations are focused on managing complex, varied
reporting requirements rather than real business value and results.
The study found that spending on sustainability reporting
exceeds spending on sustainability innovation by 43%. Only 31% of
executives surveyed report they are incorporating sustainability
data and insights into operational improvements to a great extent,
while 14% say they do so with innovation initiatives.
"An organization's approach to sustainability may be holding it
back. There is no quick fix. Sustainability requires intentionality
and a shared corporate vision," said Oday
Abbosh, Global Managing Partner, Sustainability Services,
IBM Consulting. "Sustainability needs to be part of the day-to-day
operations, not viewed only as a compliance task or reporting
exercise. By embedding sustainability across their business,
organizations are more likely to drive internal innovation, attract
and retain skilled talent, and be better positioned to deliver both
positive environmental impact and financial outcomes."
Other key study findings include:
Organizations continue to pursue sustainability, but funding,
skilling and operationalizing actions remain a challenge
- Seventy-five percent (75%) of executives surveyed agree that
sustainability drives better business results, and 76% agree that
sustainability is central to their business strategy.
- At the same time, 69% of executives surveyed say that
sustainability needs to be a higher priority in their
organization.
- While 82% of executive respondents agree that high-quality data
and transparency are necessary to achieve sustainability outcomes,
only about 4 in 10 organizations can automatically source
sustainability data from any of the following core systems: ERP
(finance, HR, supply chain), Enterprise Asset Management, CRM,
Energy Management Systems, Facilities Management systems.
- Thirty-nine percent (39%) of executives surveyed also cite a
lack of requisite skills as the top barrier to sustainability
progress.
Despite most organizations not incorporating sustainability
into innovation initiatives, leaders expect generative AI to help
supercharge sustainability efforts
- Sixty-four percent (64%) of executives surveyed agree that
generative AI will be important for their sustainability
efforts.
- Seventy-three percent (73%) say they plan to increase their
investment in generative AI for sustainability.
Organizations that embed sustainability more deeply into
their operations see benefits that can convert sustainability
efforts into business value
Further analysis of the survey data found that:
- Organizations that embed sustainability spend slightly less on
dedicated sustainability efforts as a share of their revenue
compared to organizations that don't embed.
- Fifty-three percent (53%) of these organizations say that
business benefits are essential for justifying sustainability
investments; only 17% say meeting sustainability objectives is in
itself sufficient to justify investment.
- These organizations are also 191% more likely to have aligned
their data and sustainability strategies to a great extent, and 80%
more likely to be using AI for sustainability to a great
extent.
Beyond checking the box - how to create business value with
embedded sustainability underscores the urgent need for
organizations to integrate sustainability objectives within
business strategy and apply technologies like AI to realize greater
progress and profitability. The study also serves as a resource for
business leaders, outlining actionable strategies to help
enterprises with challenges around data, business integration and
decision-making.
To view the full study, visit:
https://www.ibm.com/thought-leadership/institute-business-value/en-us/report/sustainability-business-value
*Study Methodology
The study draws on a survey of
5,000 C-suite 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, the
data from the respondents was analyzed to allow for a segmentation
of the sample according to how embedded sustainability is in the
enterprise. Based on this segmentation, analysis was conducted on
differences in sustainability and business outcomes, operational
practices, and approaches to enabling progress on
sustainability.
The IBM Institute for Business Value, IBM's thought leadership
think tank, combines global research and performance data with
expertise from industry thinkers and leading academics to
deliver insights that make business leaders smarter. For more
world-class thought leadership, visit: www.ibm.com/ibv.
About IBM
IBM is a leading provider of global
hybrid cloud and AI, and consulting expertise. We help clients in
more than 175 countries capitalize on insights from their data,
streamline business processes, reduce costs and gain the
competitive edge in their industries. Thousands of government and
corporate entities in critical infrastructure areas such as
financial services, telecommunications and healthcare rely on IBM's
hybrid cloud platform and Red Hat OpenShift to affect their digital
transformations quickly, efficiently and securely. IBM's
breakthrough innovations in AI, quantum computing,
industry-specific cloud solutions and consulting deliver open and
flexible options to our clients. All of this is backed by IBM's
long-standing commitment to trust, transparency, responsibility,
inclusivity and service. Visit www.ibm.com for more
information.
Media Contact:
Marisa Conway
IBM Communications
conwaym@us.ibm.com
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SOURCE IBM