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Sustainability initiatives still take a back seat – What CEOs can do about it?

A huge 95 percent of CEOs realise that a sustainable development agenda is needed and for that, some action is called for.

March 18, 2020 / 07:49 AM IST

Accenture released a report called the United Nations Global Compact-Accenture Strategy 2019 CEO Study which has more than a decade of research on business contribution to the 17 UN Sustainable Development Goals. This study has insights from more than 1,000 CEOs from 21 industries and 99 countries. It shows that 71 percent of CEOs believe that businesses can play a critical role in contributing to global sustainable goals, with increased commitment and action.

A huge 95 percent of CEOs realise that a sustainable development agenda is needed and for that, some action is called for. Almost 54 percent of these are seeing the writing on the wall because of climate changes staring everyone in the face. So CEOs across regions are calling for segregating economic growth with the predatory use of natural resources in order to protect further environmental degradation. They include 39 percent of North American CEOs who strongly agreed to this, 30 percent European CEOs who did the same, 44 percent Middle East/North African CEOs, 42 percent Asia Pacific CEOs and 37 percent Latin American CEOs who made the right noises. The highest number of CEOs who wanted this were from Oceania (54 percent) and the least okay with this were African CEOs (28 percent).

The report stated that the United Nations estimates “the global population will reach 9.7 billion by 2050 and the middle class is expected to grow to 5.3 billion by 2030.” All these people will need jobs, housing, food and all the other essentials needed to make life comfortable. So sustainable use of resources is not a negotiable option. The current problem is that a lot of CEOs have not been able to make the case for this because it doesn’t add to their businesses’ value.

But some seem to have made this synchronisation. The CEO of Unilever states in the report, “There is no difference between our business strategy and our sustainability strategy…they are totally integrated.” As to how important it is for them to get this balance right? Here’s what Alex Ricard, Chairman and Chief Executive Officer, Pernod Ricard said, “I believe businesses that are only targeting profits will die. Only those targeting all stakeholders will remain profitable in the future.”

The survey asked them which technologies will change the future of their businesses and almost the majority voted for big data/advanced analytics, robotics, artificial intelligence, Internet of Things (IoT) and bio-energy - in this order of preference. They considered genetic engineering, cellular and tissue engineering, hydroponics and aeroponics and DNA marking as least transformative.

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The reality is that according to Accenture’s studies, “after ten years of strongly embracing the role of sustainability, for the first time ever, the aggregate number of CEOs reporting sustainability as ‘important’ or ‘very important’ has gone down (from 97 percent in 2016 to 94 percent in 2019). And one in three CEOs (29 percent) do not believe that – even with increased commitment and action – business can play a critical role in contributing to the Global Goals.”

One CEO, Peder Holk Nielsen, President and CEO of Novozymes, quoted, “Things are moving in the right direction, but too slowly.” So here’s what Accenture recommends CEOs start doing:

Raise ambition and impact: Leaders must drive change in their own organisations, and through the disruption of market systems. They have to build responsibility into their organisation’s culture.

Collaborate than compete: Key players must connect in new ways and not compete but instead come together for a common cause.

Lead visibly: Leaders must embrace their role as change agents authentically, to champion the sustainability agenda within their organisations, in the larger ecosystem, and with their investors.

The payoff is that the next generation of parents, office workers and professionals are going to be the millenials and they are majorly invested in organisations getting this right. They will choose to business or not to do so, or work with company or not to do so, depending on how well CEOs walk the sustainable development talk. And critical to this development will be women and 38 percent of CEOs strongly agree that women are important decision makers and movers and shakers of the future.

This sustainability goal is for 2030 and there are only 10 years left and as Fernando Musa, CEO, Braskem SA said in the report, “Societal problems are complicated. There are trade-offs and unintended consequences to understand.”

Lise Kingo, Executive Director and CEO of the United Nations Global Compact said it best, “With less than 4,000 days remaining until the 2030 target, leaders are not content with current progress and calling for their sectors and peers to step-up and turn commitment into action. The scale of the challenge is unprecedented and requires all stakeholders, including governments, policymakers, business leaders, investors, shareholders, civil society and academia, to work together to accelerate change.”

Manali Rohinesh is a freelance writer who explores financial and non-financial subjects that pique her interest.
Manali Rohinesh

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