While USA is experiencing an Ice-Age era of ESG, Europe is in full bloom. As a Norwegian company, ECOISM recently participated in the State of Sustainability survey organized by Sustainability Hub Norway.
144 Norwegian companies of different sizes and profiles were asked about their sustainability efforts, barriers, executive management commitment and employee engagement.
Presumably, the results of this survey reflect the state of Corporate Sustainability in Northern part of Europe.
86% of respondents perceive more or much more pressure towards sustainability over the last year.
EU-regulations, disclosure requirements, supply chain disruptions and international climate agreements have made an impact on business operations across the globe.
Surprisingly, the main source of pressure is not regulations or stakeholders, but prospective employees and talent.
Employees are attracted to companies that incorporate sustainability into their business strategy, as it brings significance to the tasks they perform. People want to be part of the solution, not the problem.
New CSRD/ESRS regulatory frameworks affects strategy of 66% of respondent companies.
Non-financial reporting has transitioned from a window dressing to a strategic instrument.
The biggest external barriers for sustainability performance are Lack of maturity and holistic understanding as well as current business paradigm.
Putting sustainability at the core of the business requires new approaches, internal alignment, and readiness for transformation. In the current business landscape, defined by economic & geopolitical uncertainties and supply chain disruptions, big transformations are associated with greater risks, even if it may result in future-proof business in the long-term.
Climate, energy and circularity are the top 3 sustainability priorities
That sounds a bit like diffuse buzz-words to us. Putting “Climate” as a priority topic for the company could create entropy and confusion.
It needs to be narrowed down to concrete, actionable and relevant subjects.
When we work with the corporate clients, we often concentrates on matters like Transparency, Supply Chain, Consumer engagement.
There is a clear discrepancy between sustainability perception within different corporate levels.
We have also noticed that executive management is more concerned with conventional sustainability (environmental emissions, social parameters such as sick leave, gender gaps, etc.), while the sustainability specialists focus largely on CO2 reduction, investments allocation and BAT (best available technology)-integrations.
Not all departments have equally integrated sustainability in their operations. Expectedly, top 3 departments are Marketing & Communications, Innovation & RnD, Employee Development & HR.
Half of the surveyed companies anticipate an increase in revenue in the coming year due to their sustainability initiatives, and 85% of the companies are planning to further increase ESG-investments.
Sustainability competence for executive management has decreased while competence of sustainability specialists has grown.
Sustainability landscape has become exceptionally complicated due to regulations and requirements, and it is natural that executives would outsource this sophisticated matter to the experts.
The most attracted sustainability competences on the market are: innovation competence, reporting competence, sustainable value chain and sustainable operations.
Based on our experience, companies still double down on marketing and communications rather than operations and transformations.
Finally, the survey showed that 70% of companies report that less than half of their total sales come from sustainable products or services.
While companies do experience profitability through sustainability, integrating it into the core of business operations remains a practice adopted by a select few. There is a lot of work ahead to shift this paradigm and encourage broader adoption of sustainable practices across the business landscape. Therefore ECOISM focuses on helping our cross-sector clients set measurable targets and achieve tangible results from strategic sustainability initiatives.