According to research, there are several gaps that need to be addressed in order for businesses to achieve their sustainability goals.
In the report, The Gap in Creating Sustainable Value, Salesforce presents the results of a sustainability study conducted in partnership with GlobeScan and highlights the following key findings:
- 93% of senior IT, finance and ESG leaders say sustainability is critical to commercial success.
- 37% of senior leaders believe sustainability is “very integrated” into the core of their business.
- 23% of senior management teams are devoting significant capital to sustainability.
The report identifies four key gaps – data quality, cross-functional collaboration, capital allocation and implementation – as constraints to integrating sustainability into core business functions. The report, co-authored by Oxford University Professor Robert Eccles and New York University Stern Professor Alison Taylor, surveyed more than 200 professionals, including 76 C-suite executives, across North America, Europe and Asia.
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The four key gaps identified in the report — capital, implementation, integration and data — are a few more details that stand in the way of making sustainability meaningful for corporate strategy and value creation.
Understanding the Four Gaps
- Capital Gap: Despite its high importance, capital is limited — More than 90% of respondents say sustainability is “very important” (67%) or “fairly important” (26%) to business success. The research shows that nearly 50% of senior management teams say they are paying close attention to sustainability risks, opportunities and impacts, but only half of these are getting the level of capital needed to mitigate risks, seize or manage opportunities. their effects.
- Execution gap: Sustainability is seen as creating value mainly through reputation rather than operations — Respondents believe that sustainability provides the most value in the areas of marketing and PR, namely enhancing the company’s brand and reputation, strengthening stakeholder and community relationships, and facilitating partnerships and collaborations. These areas are perceptual, difficult to associate with monetary value, and are disconnected from operations.
- Integration gap: Low cooperation limits progress — Without sufficient capital or alignment across teams, sustainability integration can also suffer. Despite the stated importance of sustainability to commercial success, only 37% of respondents believe that sustainability is “very integrated” into the core of their business. The low integration of sustainability into core functions such as finance and technology means that people on the sustainability team have less opportunity to understand the commercial opportunities for the business. While these functions are considered essential to making substantial progress on sustainability within the business (86% for finance and 75% for technology), senior leaders perceive limited collaboration between these areas and the sustainability function. However, despite the low baseline, most respondents report an increase in collaboration over the past two years (70% with finance, 63% with technology).
- Data gap: Poor data quality on sustainability performance hinders value creation — Technology can help monitor and manage sustainability risks, opportunities and impacts, as long as there is high-quality data to analyze. Up to 80% of respondents say high-quality data on sustainability performance is “very important” to realize the full value of sustainability, while 15% say it’s “fairly important.” However, only 8% say they currently have “very high quality” data, while another 19% say they have “high quality” data. Lack of data makes it difficult to test hypotheses about how sustainability creates value for businesses. Given this challenge, nearly two-thirds of respondents said they have increased funding in data collection and management solutions for sustainability in the past two years (63%) and plan to do so in the next two years (65%).
A deeper look into the data gap reveals that 95% of leaders believe access to high-quality data on sustainability performance is essential to unlocking the full value of sustainability. However, access to high-quality data is a challenge, and less than three in ten (27%) say they currently have high-quality sustainability data at their disposal.
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Nearly two-thirds of leaders say they have increased funding for data collection and management solutions to help close the data gap in the past two years, and expect to increase it even more over the next two years, the report notes.
The report offers the following recommendations for businesses looking to address four key gaps:
- Capital gap: It is not enough for senior management to focus on sustainability. Allocate sufficient capital to sustainability initiatives and hold teams accountable for their performance.
- Implementation gap: Make a stronger case for the impact of sustainability on key operational and commercial lines of innovation, costs and sales, not just relationships; align with measurable areas that guide capital allocation.
- Integration gap: Deliver stronger business and buy-in by better integrating key functions, particularly finance and technology, with the expertise and tools to help measure and manage progress against senior management team expectations.
- Data gap: Leverage better data to build the business case and meet increasing compliance requirements, while ensuring data is used as a tool to guide, challenge and validate strategic decisions, not just reporting and compliance.
To learn more about the Creating Sustainable Value report, you can go here.