Economist Intelligence Unit on sustainability

The Economist Intelligence Unit this week publishes a report on the state of business and sustainability entitled: Doing Good: Business and the Sustainability Challenge. (Disclosure: SAP was amongst a number of co-sponsors of this report) The report captures nicely the zeitgeist - most businesses have accepted sustainability as a mainstream concern but struggle to integrate it meaningfully into strategy and performance management.

Though the Economist family has been famously agnostic on sustainability (the magazine once referred to it as a ‘faulty analysis of the capitalist system’) a healthy skepticism is no bad thing with 71% of executives surveyed agreeing ‘too many organizations use sustainability merely as a public relations tool’. At first take this seems disappointing but actually I think I would be more concerned if the result pointed emphatically the other way towards complacency. Clearly, most executives believe there is work to be done to better manage sustainability performance and assure stakeholders.

The EIU study identified some of these management gaps:

Four key areas currently receiving too little attention within business are: leadership, supply chains, reporting and metrics and the transformation of values into processes. At present, weaknesses in one or another of these will condemn too many companies to poor performance in this area.

Perhaps more important, as the social and environmental forces driving sustainability reshape the economy, an inability to understand and perform in this area could be fatal for business.

Jane Nelson from the Harvard CSR Initiative (and something of an icon in this field in my view) sums up the conundrum well:

Most companies are not sure what is enough. On climate change, what is enough? That you have a policy? That your emissions meet or exceed some publicly agreed level? And if so who sets the level?

The awful truth is that sustainability has to be understood in context of the industry not as a set of universal principles. If I am to make one criticism of the EIU study it is that it did not go far enough to explore strategic value drivers by key industry to drive a more granular debate on strategic sustainability management. It is an area where Goldman Sachs did some good work last year with the GS Sustain launch but the subject is in need of a great deal more development.

So what does this mean for the tech sector? In many respects the sustainability pioneers of the private sector came from the extractive industry and often borne out of crisis. Sustainability 2.0 will be driven forward by innovation and market forces. Business models will be reinvented to tap into more environmentally efficient and socially inclusive markets. For sustainability 2.0 to be successful more will be demanded of the entire tech industry in serving as both exemplar and enabler.