SUSTAINABILITY: WHAT IS IT?

Last year Makovsky + Company conducted, with Harris Interactive, “The Green Gap Survey” of senior Fortune 1000 executives. Now McKinsey has completed a similar study. What is distressing is how little has changed in the last year. Both studies show that there is a disconnect between senior executives’ perceptions about the importance of sustainability vs. the actions that their companies are taking.

One of the more interesting findings in the McKinsey Study is that one reason so many companies don’t engage as deeply as they should on the sustainability front is that they apparently don’t have a clear definition of sustainability. Twenty percent of senior executives are in that category. Further, among those that do say they address sustainability concerns, there is a variation of definitions. The McKinsey report says 55 percent define sustainability as managing issues related to the environment, 48 percent say it’s governance issues, and 41 percent say social issues. Fifty-six percent define it in two or more ways.

Other findings include:

• More than 50 percent of senior execs consider sustainability to be very or extremely important. Yet just 30 percent say their companies are actively seeking opportunities to invest in sustainability or embed it in their business practices.

• Companies are most engaged in sustainability if it’s a top-3 priority on their CEOs’ agendas and formally embedded in business practices … but only a quarter of the executives said that it is a top-3 priority on the CEO agenda.

• Seventy-six percent feel that sustainability creates shareholder value.

• Fifty-five percent agree that investment in sustainability helps their companies build reputation.

One of the biggest challenges facing senior executives is how best to convert convictions into actions. Progress depends on cooperation and compromise among business as well as the federal and state governments, trade groups and consumers. This carries major responsibilities for the communications function.

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