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MIT: Corporate sustainability reaching a ‘tipping point’ - 05 February, 2012.

The third annual Sustainability & Innovation Global Executive Study, jointly produced in collaboration between MIT Sloan Management Review and the Boston Consulting Group, demonstrates that an increasing number of managers and companies are taking sustainable business practices seriously even when the business case for such practices is less than obvious.

The survey findings suggest that most companies are struggling to define sustainability in a way that is relevant to their businesses. And while sustainability has made it onto many management agendas, responses indicate it ranks just eighth in importance among other agenda items. “In a challenging global economy, a growing number of corporations are turning to sustainability to keep competitive,” according to the MIT report. The study, Sustainability Nears a Tipping Point, found that two-thirds of companies see sustainability as a competitive necessity in today’s marketplace, up from 55% a year ago. In addition, 31% of companies say sustainability is boosting their profits and 70% report that sustainability has a permanent place on their management agenda. Two-thirds of the respondents also said that managers are paying more 
attention to sustainability, and investing more in sustainability, than they were a year ago. The data, which include responses from 2,874 executives in 113 countries, suggests that "the sustainability movement is nearing a tipping point, the point at which a substantial portion of companies are not only seeing the need for sustainable business practices, but are also deriving financial benefits from these acts,” the report concludes. “Although many companies are still struggling to define sustainability in a way that is relevant to their business, the attention and investment we see indicate the here-to-stay nature of sustainability for organisations everywhere,” David Kiron, executive editor at MIT Sloan Management Review and a coauthor of the report, said. Analysts also report that corporate sustainability has soared in the last few years. In an interview earlier this month, Nick Main, Deloitte’s global sustainability and climate change leader, said he has seen companies around the world take significant strides forward. “I can’t think of a country that’s stepped back on this [climate-change] agenda,” Main said. “Maybe some haven’t progressed as far as they could have, but nobody’s stepped back. That progress comes in spite of a troubled economy that might make it more difficult for companies to focus on long-term benefits at a short-term cost,” he added. “I suspect the economy is making it tougher in some ways. You have to stay sustainable in the short term as well as in the long term, because otherwise, in the long term, you’re not there. But I do think people are more aware of resource scarcity everywhere.” The MIT study also found that corporations in resource-intensive industries, which have the highest direct impact on the environment, are leading the way. Companies in such industries as commodities, energy and utilities, automobiles, consumer products and chemicals, for example, were most likely to report both that sustainability had a permanent place on their management agenda and that sustainability was necessary to keep competitive. Meanwhile, most of the companies increasing their sustainable commitments hail from emerging economies in the Asia-Pacific, South America and Africa, according to the report.

 

Source: www.ben-global.com

February 05, 2012.