Of sustainability and profit

Posted on 8 Feb 2010 by The Manufacturer

Businesses report that the link between sustainability and profits remains unclear in the short term despite the recognition of long term gains.

Just 24% of executives in an Economist Intelligence Unit survey believe there is a strong link in the short term (1-2 years) between financial performance and commitment to sustainability. However, 69% believe the link is strong in the long term (5-10 years), and companies worldwide are moving sustainability principles into their core policies and practices.

The survey, conducted in December 2009 and January 2010 among over 200 finance and corporate social responsibility executives, is at the centre of Managing for sustainability, a new report from the Economist Intelligence Unit.

Thirty-four percent of respondents said their firms’ immediate financial goals were a more pressing priority than sustainability. Not surprisingly, this represents the leading obstacle to embracing sustainability. Lack of consensus and clarity are also obstacles.

Over 85% of those surveyed agree that sustainability will become more important in the coming three years. Employee recognition programmes are the most widespread employee incentive, cited by 38% of respondents. Just 18% of firms link pay to sustainability indicators, but anecdotal evidence suggests this practice is growing among leading companies.