Wind Turbine, Schleswig-Holstein Germany. (Photo by plus49/Construction … [+]
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As we continue to see the effects of climate change across the world, the drive for corporate sustainability initiatives has been greater than ever. More and more consumers let actions speak louder than words. They want organizations to have the same values as they do and they want to see organizations take action. And when companies don’t, consumers spend their money elsewhere. According to a survey by the IBM Institute for Business Value, 62% of consumers are willing to change their purchasing habits to reduce their environmental impact. And half of those surveyed are willing to pay a premium for sustainability. But from what we’ve seen, many organizations are taking the call to action seriously.
Earlier this year, our team at Futurum Research, in partnership with Honeywell, created the Honeywell Environmental Sustainability Index to track and inform members of the global community about the current and future adoption of sustainability initiatives by companies around the world. As of Q4, sustainability goals are at the top of the list of corporate initiatives over the next 6 months.
This is promising as organizations everywhere continue to grapple with a mounting mountain of issues such as geopolitical conflicts, the ongoing fallout from the pandemic, rising inflation and a possible recession. These barriers could easily stand in the way of sustainability initiatives. While some might impede progress, I believe it’s still a wise decision for companies to continue to focus on ESG and sustainability initiatives in the years to come. Here’s a look at what the data tells us.
Honeywell Environmental Sustainability Index: The Results
Despite the public perception that many companies 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, the majority of companies believe that they have achieved their goals at least somewhat or very successfully over the past 12 months. While that optimism wanes when it comes to near- and long-term goals (2030), the data is clear: companies believe they are hitting the mark when it comes to being greener.
In fact, the report contains a lot of good news. For example, sustainability is the top priority for 65 percent of companies. Perhaps most surprisingly, it ranks above everything – financial performance, digital transformation, and even market growth – across all regions when ranking current business initiatives. In a market plagued by so many issues, not the least of which is trying to navigate a post-pandemic market, that’s tremendous. Businesses are finally getting it. They realize that climate change is real and is here to stay. And they recognize their place in correcting them.
Sustainability is at the top of the company priority for the next six months.
future research
In terms of the types of environmental initiatives undertaken by companies around the world, most companies have prioritized energy efficiency as their top goal, while circularity and recycling have emerged as the areas of greatest success over the past year. The former, energy efficiency, makes sense since a focus on energy efficiency also results in higher overhead savings on balance. The focus on recycling and singularity was a little surprising, but welcome. It shows that companies are trying to find ways to minimize waste and balance the manufacturing cycle.
In the past few months alone, there have been multiple announcements in these areas from multiple organizations. At last week’s re:Invent 2022, AWS announced they would be water positive by 2030, meaning they will return more water to communities and the environment than is used for data center operations. In September, 40 new organizations joined Amazon’s Climate Pledge to be carbon neutral by 2040, a full ten years ahead of the Paris climate accords. There are currently 375 companies in 34 countries that have made this pledge. action happens.
The Six Five On the Road with Chris Wellise from AWS at re:Invent 2022 – YouTube
A look into 2023 and beyond
While last year’s results have been positive and optimistic, we face a difficult economic future that could pose an obstacle for businesses – one that many are already planning. Looking ahead to the next 12 months and beyond, many of those working on environmental sustainability were less optimistic about their ability to see the same results as this year. Of course, many issues around the world continue to raise questions about the global market. According to the Honeywell Environmental Sustainability Index, pandemic-related issues topped the list of perceived obstacles to continued success — yes, even in 2022. In fact, less than half of companies said they are extremely optimistic about meeting their environmental sustainability goals over the next 12 months. Even fewer – just 40 percent – of those surveyed said they were extremely optimistic about achieving their 2030 goals. A surprising quarter were extremely pessimistic about long-term goals.
Where is the consumer emphasis that corporate sustainability efforts are evolving? This gives us more information than ever before and a greater appreciation for the efforts being made at the corporate level. In fact, according to the survey, 80 percent of companies have set internal environmental sustainability goals for energy development and efficiency. In North America this proportion averaged 82 percent, in Latin America it averaged 70 percent. But the result is clear: a very large majority of companies are committed to getting the job done. Like everything in life, it will take time.
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