CEOs identify environmental sustainability as a business priority
Environmental sustainability has become one of business leaders’ top 10 priorities as investors, employees and regulators urge companies to fight and respond to climate change.
According to Gartner’s annual survey of CEOs and senior business leaders, environmental sustainability features for the first time in the survey’s history on the list of top 10 priorities for CEOs, as it rose from 14th place in 2019 to 20th in 2015 to eighth place. was conducted between July 2021 and December 2021 with more than 400 senior business executives from various industries.
The survey revealed that environmental sustainability serves as a “competitive differentiator,” according to respondents. Seventy-four percent of CEOs said increasing their environmental, social and governance efforts appealed to investors.
“CEOs say investors want better returns and revenue growth, while driving environmental and social change,” said Kristin Moyer, Distinguished Vice President and Analyst at Gartner. “And CEOs are discovering that ESG is a way to attract customers, talent and investors.”
Indeed, investor interest is driving the climate risk disclosure rule proposed by the U.S. Securities and Exchange Commission, which would mandate reporting of climate-related risks and greenhouse gas emissions. Greenhouse. The comment period for the proposed rule was recently extended to June 17 due to a surge of interest from stakeholders.
While the SEC’s proposed rule isn’t a driver of corporate interest in sustainability, Moyer said it puts additional pressure on companies to “strengthen their processes for identifying, managing and disclosure of climate risks and opportunities”.
However, as environmental sustainability efforts gain momentum, CEOs and senior business leaders face some challenges when it comes to setting and achieving sustainability goals.
Barriers to environmental sustainability
Survey data showed that compliance, employee reluctance to change and supply chain engagement are the top three barriers to advancing sustainability programs, Moyer said. IT and data limitations are also challenges, she added.
Sustainability managers spend “an inordinate amount of time” researching the environmental, social and governance data they need, and sustainability programs often start with tools like spreadsheets. Although the spreadsheets were inexpensive, Moyer said they were also of poor quality.
Indeed, IBM’s annual CEO survey noted that 51% of CEOs cite lack of data insights, unclear ROI, and technology barriers as significant barriers to their sustainability efforts.
Kristine Moyer Vice President and Distinguished Analyst, Gartner
“CEOs lead one of the most complex environments ever, including war, inflation, talent shortages and the COVID-19 health crisis,” said John Granger, senior vice president of ‘IBM Consulting, in a press release. “Despite these challenges, they are not letting up on the accelerator when it comes to sustainability, and others are now ranking it among their top priorities. Yet many do not fully appreciate how data and technology can bridge the gap. from strategy to impact.”
Moyer said corporate environmental sustainability and environmental, social and governance programs need consistent, timely and detailed data. This means that companies must invest in the “process of identifying, collecting and quality assurance of ESG data”.
One way to help avoid fragmented data collection and streamline sustainability and environmental, social and governance efforts is for companies to create an executive committee providing coordination, governance and oversight, a she declared.
“Sustainability is a business transformation, and every business transformation ends up bringing all kinds of challenges,” Moyer said. “The most important thing is to remember that sustainability is a long-term transition. Progress will not be linear – business change never is.”
Makenzie Holland is a news writer covering big tech and federal regulation. Before joining TechTarget, she was a generalist journalist for the Wilmington StarNews and crime and education reporter Wabash Plain Dealer.