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KPMG: Progress in Adopting Sustainability Strategy for Most US Firms
April 30, 2011
The recent KPMG International study, Corporate Sustainability: A progress report, confirms that U.S. companies are closing the gap with their counterparts elsewhere. More than 62 percent of executives globally say they have implemented a formal sustainability program. As well nearly 55 percent of U.S. executives say their organization has a formal sustainability strategy in place, 19 percent expect to eventually develop one and 12 percent say they are working on a strategy.
Many companies are finding strategic advantages in embracing and implementing a comprehensive, cohesive sustainability program. Asked to identify the top three benefits from these programs, respondents most often chose: better or more efficient business processes and practices; increased profitability or shareholder value; and the ability to attract or retain new or existing customers. The KPMG study also found the drivers behind most sustainability programs – in this country and elsewhere — have been customer influence and brand enhancement, while challenges included how to determine and measure metrics, obtain reliable internal sustainability data, and meet a variety of reporting requirements.
When asked to identify the key business drivers for implementing sustainability-related business objectives within their companies, the U.S. executives cited enhancing brand reputation (37 percent), regulatory or legal compliance (35 percent), reducing costs (34 percent), product or service differentiation (24 percent), and increasing profitability and managing sustainability risks (both 23 percent). Other business drivers included: customer retention (20 percent), staying competitive (15 percent), generating shareholder value (13 percent), and recruitment and employee retention (8 percent).
Identifying the top three most influential stakeholders of a sustainability strategy, U.S. respondents said their customers (47 percent), their employees (34 percent), the management team and their board of directors (34 percent), regulators (29 percent), competitors (20 percent), business or supply chain partners (17 percent) and their investors (16 percent)
Organizations planning a sustainability program expect to implement one within the next two years (61 percent) or 3-5 years (22 percent), while 17 percent say they have no timetable. Less than 6 percent of the respondents believe their companies do not need a sustainability strategy.