(Reuters) – A growing number of chief executives say sustainability is of the biggest challenges to act upon over the next two to three years, a new study said on Tuesday.
In a global survey of 3,000 CEOs spanning over 40 countries and 28 industries, the IBM Institute for Business Value (IBV), a think tank for tech group IBM, unveiled how sustainability had progressively moved to the core of corporate agendas.
As the world rebounds from the disruption caused by the coronavirus pandemic, firms are facing increasing pressure from stakeholders to prioritise how they will adapt as the world transitions to a low-carbon economy.
The report showed sustainability was top of the list of challenges for 51% of CEOs, up from 32% in 2021, with greater demand for action coming from board members (according to 72% of respondents) and investors (57%). Less than half cited regulators and government as sources of pressure to prioritize sustainability.
The focus was also being driven by a growing consensus that corporate efforts around sustainability can lead to stronger business performance.
“The perception that environmental and social agendas require a tradeoff with improved business outcomes is crumbling,” IBV said.
Of the CEOs surveyed, more than 80% expect investments in sustainability to deliver higher business results over the next five years, the report showed.
Despite the growing focus, the report also found that while most CEOs are putting their words into action, most are also still in the pilot stage of implementation – only 23% have embedded sustainability strategies across their organization.
Chief executives also flagged a number of hurdles, with 57% citing uncertainty around return on investment and economic benefits as the biggest challenge to reaching their sustainability objectives.
Other challenges included poor data and regulatory barriers.
“CEOs must address the inherent difficulties that come with disrupting the status quo,” IBV said. “Finding the right roadmap is crucial.”
(By Federica Urso; Editing by Simon Jessop and Bernadette Baum)