The business of sustainability

Publisher
McKinsey
Publication date
October 2011
Type
Reports
Category
Managing Corporate Responsibility
Language
English
Free/Pay for content
Free
 
Many companies are actively integrating sustainability principles into their businesses, according to a recent McKinsey survey,1 and they are doing so by pursuing goals that go far beyond earlier concern for reputation management—for example, saving energy, developing green products, and retaining and motivating employees, all of which help companies capture value through growth and return on capital. In our sixth survey of executives on how their companies understand and manage issues related to sustainability,2 this year’s results show that, since last year, larger shares of executives say sustainability programs make a positive contribution to their companies’ short- and long-term value.

This survey explored why and how companies are addressing sustainability and to what extent executives believe it affects their companies’ bottom line, now and over the next five years. In a related opinion piece, “Putting it into practice,” at the end of this survey, the authors argue that more businesses will have to take a long-term strategic view of the issue by identifying and pursuing sustainability opportunities that hold the highest value potential.

On the whole, respondents report a more well-rounded understanding of sustainability and its expected benefits than in prior surveys. As in the past, they see the potential for supporting corporate reputation. But they also expect operational and growth-oriented benefits in the areas of cutting costs and pursuing opportunities in new markets and products. Furthermore, respondents in certain industries—energy, the extractive industries,3 and transportation—report that their companies are taking a more active approach than those in other sectors, probably as a result of those industries’ potential regulatory and natural-resource constraints.