As we continue to see the impact of climate change around the globe, the push for corporate sustainability initiatives has never been greater. More and more, consumers are letting their actions speak louder than words. They want organizations to have the same values that they do and they want to see that organizations are taking action. If organizations don’t, consumers are spending their money elsewhere.
According to an IBM Institute for Business Value Survey, 62% of consumers are willing to change their purchasing habits to reduce environmental impact. And half of respondents are willing to pay a premium for sustainability. But from what we’ve seen, many organizations are taking the call to act seriously.
Earlier this year, our team at Futurum Research, in collaboration with Honeywell, created the Honeywell Environmental Sustainability Index to help track and inform members of the global community about the current and future adoption of corporate sustainability initiatives from organizations around the globe. As of Q4, sustainability goals top the list for corporate initiatives in the coming 6 months.
This is promising as organizations everywhere continue to deal with a growing mountain of issues like geopolitical conflicts, continued fallout from the pandemic, rising inflation, and a possible recession. It would be easy for these barriers to get in the way of sustainability initiatives. While some might hinder the progress, I believe that it is still a wise choice for organizations to continue to focus on ESG and sustainability initiatives in the coming years. Here’s a look at what the data is telling us.
Honeywell Environmental Sustainability Index: The Results
Regardless of the public perception that many corporations are “greenwashing” their environmental efforts, those directly involved in corporate environmental sustainability don’t seem to share the same skepticism — at least not about their own recent performance. In fact, a majority of organizations believe they have been at least somewhat or extremely successful in achieving their goals over the past 12 months. That sense of optimism does decrease when it comes to near and long-term (2030) targets, but the data is clear: businesses think they’re hitting the mark when it comes to moving toward greater environmental protection.
In fact, there’s a lot of good news in the report. For instance, sustainability is top of mind with 65 percent of businesses. Perhaps most surprisingly, across all regions, it ranked higher than everything — financial performance, digital transformation and even market growth — when ranking current corporate initiatives. In a market plagued by so many issues, not the least of which is trying to get one’s bearings in a post-pandemic marketplace — that’s huge. Corporations are finally getting it. They realize climate change is real and here to stay. And, they recognize their place in trying to correct it.
In terms of the types of environmental initiatives being undertaken by businesses worldwide, most companies prioritized energy efficiency as a top focus, while circularity and recycling proved the area with most extreme success in the past year. The former, energy efficiency, makes sense, as a focus on energy efficiency will also lead to greater savings in overhead when it comes to the bottom line. The focus on recycling and singularity was a bit of a surprise, but a welcome one. It shows businesses are trying to find ways to minimize waste and bring a greater balance to the manufacturing cycle.
In the past few months alone, there have been several announcements in these areas from multiple organizations. At re:Invent 2022 this past week, AWS announced a commitment to being water positive by 2030, meaning they will return more water to communities and the environment than what is in use in data center operations. In September, 40 new organizations joined on to Amazon’s Climate Pledge to be carbon neutral by 2040, a full ten years sooner than the Paris Climate Accords. There are currently 375 companies across 34 countries that have taken that pledge. Action is happening.
Looking Into 2023 And Beyond
While the results from the last year have been positive and optimistic, we are staring down a tough economic future, which could be a roadblock for organizations — one that many are already planning for. Moving forward to the next 12 months and beyond, many of those working on environmental sustainability felt less optimistic about their ability to see the same results that they have this year. Clearly, many issues globally continue to raise question markets about the global marketplace. According to the Honeywell Environmental Sustainability Index, pandemic-related issues — yes, even in 2022 — topped the list of perceived barriers to forward success. In fact, less than half of organizations said they feel extremely optimistic about meeting their environmental sustainability goals in next 12 months. Even fewer — just 40 percent — of respondents said they are extremely optimistic about meeting their goals for 2030. A surprising quarter were extremely pessimistic about long-term goals.
Where does that leave consumers emphatic about corporate sustainability efforts moving forward? It leaves us with more information than we’ve had before, and a greater appreciation for the efforts that are being undertaken at the corporate level. In fact, according to the survey, 80 percent of businesses do have established internal environmental sustainability goals for energy evolution and efficiency. That ranked as high as 82 percent, on average, in North America, and as low as 70 percent, on average, in Latin America. But the result is clear: a very large majority of businesses are committing to getting the work done. As with everything else in life, it’s going to take some time.