Without CEO Buy-In, Companies Struggle at Sustainability

GreenBiz.com, 2 April 2010 – In addition to “you can’t manage what you don’t measure,” the idea that environmental leadership has to come from the top is one of the truisms of green business.

And yet, a recent survey of nearly 2,000 executives verifies not only the truth of the impact of green leadership, but also its relative scarceness.

The survey, conducted by McKinsey Global, finds a number of common obstacles, and common keys to success, for companies working on environmental issues.

The majority of respondents called sustainability “very” or “extremely” important for a number of business operations — including developing new products, opening new business opportunities, and building corporate reputations — but only 27 percent of companies said their CEOs or other c-suite executives are in charge of the day-to-day sustainability operations of the company.

The survey found that companies can be considered very engaged with sustainability when their CEOs consider it a “top-three priority” in their agendas. Unfortunately, only 6 percent of the respondents said their company has put sustainability in the top three priorities for their CEOs.

In fact, 11 percent of the executives responding to the survey say that no one is responsible for coordinating daily sustainability activities at their companies.

Among the other findings of the survey:

• Among the executives at “engaged” companies, 84 percent are aware of whether or not their firms measure their carbon footprints; only 40 percent of not-engaged firms know these details about their companies.
• Only 23 percent of respondents at the non-engaged companies say their companies are “extremely” or “very effective” at managing sustainability, compared to 88 percent of respondents in the “engaged” companies categories.
• Seventy-six percent of executives say engaging in sustainability contributes positively to shareholder value in the long term.
• Companies where sustainability is a top item in their CEOs’ agendas are twice as likely as others to integrate sustainability into their companies’ business practices. This suggests that senior executives who want to reap the benefits of incorporating sustainability into their companies’ overall strategies must take an
  active role in the effort.

The full report is available from McKinseyQuarterly.com.

This article is reproduced with kind permission of GreenBiz.com.
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