Sustainability Culture Deeply Embedded in Just 13% of Firms

Just 13 percent of executives say sustainability is deeply embedded into their firm’s cultural DNA. Most companies are generally at the early to middle stages of building a sustainability culture, with 49 percent saying it is moderately embedded and 37 percent saying it is slightly embedded.

That is according to a new report by The Conference Board in collaboration with Baker Tilly. The report, Building a Sustainability Culture, is the culmination of a series of Working Group sessions, at which executives from companies in various sectors discussed how to develop and maintain a corporate culture that embraces sustainability.

“To take advantage of the transition to a sustainable economy, companies need to build a sustainability culture that becomes an indelible part of their organization’s character,” said Paul Washington, Executive Director of The Conference Board ESG Center and co-author of the report. “The Building a Sustainability Culture Working Group served as a valuable step in helping leaders equip their workforces with the behaviors, training, resources, and capabilities necessary to meet the unprecedented challenges and opportunities in the areas of corporate governance, sustainability, and citizenship.”

“The findings of our report underscore the need for embedding sustainability into business as usual, in addition to highlighting the distance still left to travel on the journey to a sustainable economy,” said Srinand Yalamanchili, Baker Tilly Director−ESG and sustainability. “Embedding sustainability into culture and business strategy can only be achieved by prioritizing the ‘why’–the positive return on investment and risks of inaction–and taking ownership at both an organizational and individual level.”

The Working Group convened more than 250 executives from 160 companies who met over the span of eight months to focus on how to develop and maintain a culture in which those at the organization think and act with sustainability in mind. The report provides insights into five areas: 1) what is a sustainability culture?; 2) why does it matter?; 3) how do companies build a sustainability culture?; 4) who is responsible?; and 5) how do companies measure success? 

Key insights from the report include:

Companies are in the early stages of building sustainability into their culture.

• Just 13 percent of executives say sustainability is deeply embedded into their company culture, with 49 percent saying it is moderately embedded and 37 percent saying it is slightly embedded.

Sustainability and cultural change need to be closely linked to the execution of the company’s business strategy.

• 30 percent of the respondents cite the CEO as best suited to lead the cultural transformation of the organization, followed by 28 percent who cite those responsible for the company’s business strategy and operations. 

 Both the positive ROI (return on investment) and the negative ROI (risk of inaction) are driving the case for building a sustainability culture.

• An initial motivator: Explaining the “Risk of Inaction”—the negative consequences of failing to change.
• A constant motivator: Explaining the positive case for how increasing the organization’s focus on sustainability will improve the company’s performance in the marketplace, including the markets for products and services, talent, and capital.

Employees need to feel a sense of ownership when it comes to building a sustainability culture.

• 75 percent of participants cite a “sense of ownership” as the most important aspect of a sustainability culture, followed by a clear mission, purpose, and values.

 Companies may need to move beyond traditional training and compensation to motivate progress.

• Only half (50 percent) of participants cite compensation as the most effective way of recognizing and rewarding behavioral change. By contrast, 61 percent cite internal recognition from senior management as the most effective, and 54 percent cite promotions and career opportunities.