Published 02-12-08
Submitted by Economist Intelligence Unit
February 12, 2008 - Global companies that have delivered strong share price growth over the past three years are more proactive on corporate sustainability issues than those that have seen their share price stagnate or decline, according to a major new research report from the Economist Intelligence Unit.
The report, which is sponsored by A.T. Kearney, Bank of America, ExxonMobil, Jones Lang LaSalle, Orange, PricewaterhouseCoopers, SAP and SunGard, illustrates the growing importance of corporate sustainability in enabling companies to compete and to attract customers. The research is based on a global survey of 1,254 senior business executives, including more than 300 CEOs.
The survey does not claim that the adoption of sustainable practices causes companies' share prices to rise. It could be that companies with a strong financial performance simply have more resources to devote to sustainability. What the findings do show, however, is that it is possible to take a proactive position on social and environmental issues while still delivering robust financial growth. Indeed, companies in the survey that saw their share price rise by at least 50% in the last three years (share price climbers) place a greater importance on social and environmental goals than companies with share prices that have declined by more than 10% (share price losers). Social and environmental goals include improving environmental and human rights in supply chains, where 40% of share price climbers rank this as an important priority versus 18% of share price losers; reducing greenhouse gases (38% to 24%); and developing products which address social and environmental problems (49% to 35%). Share price climbers also put a greater emphasis on social and environmental considerations at board level.
Overall, the majority of global businesses do not seem to be performing particularly well when it comes to implementing sustainability policies or programmes. Out of a list of 16 sustainable policies, which encompassed issues ranging from energy consumption and carbon emissions to diversity and governance, companies polled for this report had implemented an average of just five. Many executives also rated the quality of their company's sustainability efforts as poor-with only a smaller number saying that they are doing well.
"The results of this research show that most companies are still working out what sustainability means for their business, and how to implement it," says Robin Bew, Editorial Director of the Economist Intelligence Unit. "At a basic level, a lack of consensus on what the topic encompasses results in an absence of relevant targets."
Other key findings from the research include:
Other highlights within the full 52-page report include ten lessons for corporate leaders on sustainability-and an overview of how businesses are making sustainability pay.
Doing good: Business and the sustainability challenge
is available, free of charge, at:
www.eiu.com/sponsor/sustainability
About the research
Doing good: Business and the sustainability challenge is an Economist Intelligence Unit research programme. Lead sponsors include A. T. Kearney, Bank of America, Orange, Jones Lang LaSalle, PricewaterhouseCoopers and SAP, along with supporting sponsors ExxonMobil and SunGard.
The report's findings are primarily based on a wide-ranging global survey, conducted by the Economist Intelligence Unit in September and October 2007. A total of 1,254 executives participated in the survey. Half of all respondents were from the C-suite. About 27% of respondents were based in Asia, 33% in western and eastern Europe, 33% in North and Latin America, and 7% in the Middle East and Africa. A range of company sizes were represented: 47% of firms has at least US$500m in revenue, with 22% recording revenue of at least US$5bn. To supplement the survey, the Economist Intelligence Unit also conducted 28 in-depth interviews with CEOs, sustainability chiefs and other leading experts.
The Economist Intelligence Unit bears sole responsibility for the content of this report. Our editorial team executed the online survey, conducted the interviews and wrote the report. The findings and views expressed in this report do not necessarily reflect the views of the sponsors.
Press enquiries:
Economist Intelligence Unit
Joanne McKenna, Press Liaison
joannemckenna@eiu.com / +44 (0)20 7576 8188
To arrange an interview with any of the report's sponsors, please refer to the full list of contact details in the Appendix.
About the Economist Intelligence Unit
The Economist Intelligence Unit is the business information arm of The Economist Group, publisher of The Economist. Through our global network of 700 analysts, we continuously assess and forecast political, economic and business conditions in nearly 200 countries. As the world's leading provider of country intelligence, we help executives make better business decisions by providing timely, reliable and impartial analysis on worldwide market trends and business strategies.