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Environmental sustainability is too costly

Environmental sustainability is too costly

November 11, 2022

Executives recognise the urgency for climate action, but most business leaders see environmental sustainability as a costly obligation rather than an investment in the future, the Capgemini Research Institute reports.

As the COP 27 conference continues in Egypt, a report from the Capgemini Research Institute, ‘A World in Balance – Why sustainability ambition is not translating to action” reports that organizations recognize the sustainability requirement and most have announced net zero commitments, there is still a gap between long-term ambition and short-term concrete actions.

The Capgemini Research Institute conducted the first edition of an annual global research study, surveying 2,004 executives from 668 large organizations (annual revenues over $1 billion) across 12 countries and key industries. 

Some key takeaways are:

  • The business case for implementing sustainability measures is largely underestimated or misunderstood, with only 21% of executives believing that it is clear.
  • 64% of executives say that sustainability is on the agenda of each of the C-suite in their organization.
  • There is still a gap between climate ambition and concrete actions and in total, the level of investment into sustainability initiatives for companies with over $20 billion in revenue is just 0.41% of total revenue on average.
  • Smaller companies with revenues between $1-5 billion are investing more (average of 2.81%), compared to an average 4% for the R&D spend by the S&P 500 companies in 2020.1
  • Employee expectations and regulations currently the main drivers for sustainability initiatives
  • Most businesses are holding back because they are fearful of short-term cost implications.
  • Sustainability is frequently seen as a cost centre, rather than a value centre, particularly within the context of the global macro-economic landscape.

Interestingly the research shows that organizations that are prioritizing sustainability are already outperforming organizations that aren’t. “Many companies understand the sustainability mandate, but organizations need to align on a clear strategy and short-term objectives to deliver concrete outcomes that will enable society to live within and not beyond the planetary boundaries,” says Cyril Garcia, CEO of Capgemini Invent and Group Executive Board Member. “It’s now or never, if we want to limit global warming to 1.5°C. Change needs to come from the top.”

You can access the report here.

Our take on this: In any organisation change starts at the top and every business has a responsibility to deliver a sustainable programme that collectively contribute to the 1.5°C target. And the bigger the business, the faster they must drive sustainability throughout their organisation and drive it through their entire supply channels. Sustainability isn’t a feel good thing, it is a planet saving necessity.

Categories : World Focus

Tags : Business Capgemini COP 27 Environment Sustainability

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