Robert Eccles and Alison Taylor, with GlobeScan, just published a new report “Sustainable Value Creation” demonstrating that ESG professionals are not effective at moving the needle in their companies. In a Forbes article last Sunday, Bob summed the results up this way:
“Ninety-three percent of respondents felt that sustainability was very important or fairly important to commercial success. From there it unravels, showing a serious lack of real commitment which demonstrates the sorry state of sustainability for many, if not most, companies today.”
The report’s forward offered this:
“We see a world where companies say they focus on sustainability as a tool for value creation but lack the capital allocation and operational focus to back this up. Many reasons are given for what gets in the way, but there is limited commitment to tackling them… Companies are judged to be distracting from their fiduciary duties because they spend time and resources on press releases and board meetings about sustainability but don’t demonstrate bottom-line outcomes… companies need to back up their rhetoric with practical action, closing the key gaps of capital allocation, implementation, integration, and data to understand and deliver the full value of sustainability.”
Four gaps to making sustainability a commercial success identified are:
The capital gap: Despite high importance, capital is limited
The implementation gap: Sustainability is seen as creating value mainly through reputation, not operations
The integration gap: Low collaboration limits progress
The data gap: Poor data quality on sustainability performance hinders value creation
I agree that “sustainability advocates are struggling to convince the wider business to act in spite of other pressures… working harder to understand and close these gaps and dealing with practical aspects beyond winning hearts and minds.” During the next few days, I’ll show ways to close these gaps by moving “beyond winning hearts and minds”, demonstrating hard-dollar financial value by simplifying how ESG professionals and advisors/consultants think and communicate about ESG – a topic I began last week.
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