Why Companies Fail At Sustainability, In Three Charts

Increasingly, investing in sustainability isn’t just a PR move, but a fundamental and profitable part of businesses. Unilever uses a sustainability message to attract talent, and Novo Nordisk measures environmental and social impact as closely as profit.

A joint survey from the Boston Consulting Group and MIT’s Sloan Management review found that 37 per cent of businesses are reporting that sustainability measures have added to profits, up 23 per cent from last year’s survey.

Still, that means well over half of businesses aren’t seeing a profit, which could be a barrier to real change. There are several things holding businesses back, which are broken down in these charts from the report.

First, many businesses haven’t really committed. More than two thirds don’t have KPI’s (key performance indicators) related to sustainability, which would be unthinkable for any other business function:

BCG/Sloan chart 1

Photo: BCG/MIT

When it’s hard to measure something, it’s hard to make a business case for it. And because there aren’t performance measures, there’s no incentive to succeed or sense of urgency. Companies cited a lack of data and difficulty quantifying the effects of these programs as among their biggest obstacles:


Photo: BCG/MIT

The real issue for businesses is a lack of commitment. Getting real data on sustainability measures takes effort. Companies that only change one part of their business model are significantly less likely to see profit than companies that change multiple parts:

BCG chart 3

Photo: BCG/MIT

Businesses don’t profit when they don’t design these measures for profit. They wouldn’t think of making other investments without a clear idea of how they were going to measure them. Clearly there’s a successful business case to be made for sustainability. Companies succeed when they get the resources to make the case, and act on it.  

Find the full report here

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