Three ways businesses are building back better

Our 2020 Navigator research told us very clearly that companies were embracing sustainability. Not only did they recognise that it had commercial benefits – 86% expected it to boost growth and 30% expected it to attract investment – they also understood that it had benefits that weren’t recorded on a balance sheet. Businesses believed that it also enhanced employee wellbeing and made it easier to attract and retain the best talent. Sustainability was therefore now starting to shape the culture of an organisation.

Here’s what our business community revealed about their key sustainability priorities:

Environmental issues are top of the agenda. In the face of increasing pressure from governments, regulators and consumers, businesses can’t afford to ignore climate change. In our 2020 survey, 78% of companies said they had metrics in place to measure their environmental footprint, up from 68% in 2019. And some three-quarters of the businesses had either set net-zero targets or were planning to do so in the next 12 months. They were prioritising reducing energy and water usage, as well as recycling materials, and at a strategic level 72% were adopting the UN Sustainable Development Goals Framework.

2. They’re championing diversity and inclusivity

Diversity is important to companies, from board level downwards, with 80% of companies citing this as a business priority. The same proportion were focused on executive salaries and compensation, and closing the gender pay gap was a priority for 72% of our respondents. There’s plenty of evidence to support the idea that inclusivity and diversity in a company are good for the bottom line. A McKinsey study found that the most diverse companies are more likely than ever to outperform less diverse peers on profitability. For example, companies with over 30% women executives were more likely to outperform those employing between 10 and 30% at that level.¹

What companies do, versus what they say, has come under greater scrutiny, and they are expected to serve not only shareholders, but employees, stakeholders and wider society.

Our 2020 Navigator research showed that businesses were sensitive to how their activities impacted on others, with 79% being mindful of the effect on local communities. Coronavirus also forced many companies to rethink their relationship with suppliers, shifting away from a transactional approach to more of a partnership There were signs, too of an evolution in thinking among business leaders. Responsibility, resilience and reputation were viewed as more important to long-term success than returns to shareholders.

With three in four companies in our 2020 Navigator survey setting sustainability targets, it’s clear that businesses are now seeing sustainability as fundamental to their operations. Not only does it provide opportunities for long-term growth, it also builds resilience in an uncertain world.