Executive Perspectives on Sustainability: Unveiling Shifts and Imperatives for Business in 2023

Discover key insights from the Capgemini Research Institute’s latest report, ‘A World in Balance 2023’, revealing a notable shift in executive perceptions towards sustainability.

Amidst soaring temperatures and a surge in climate-related disasters, a recent report by the Capgemini Research Institute, ‘A World in Balance 2023’, highlights a significant shift in executive perspectives toward sustainability within businesses. Compared to last year, three times more executives from diverse industries now recognize the compelling business rationale for sustainability. Yet, while acknowledgment of the benefits of sustainable practices is growing, the report underscores that tangible impact will remain limited without increased investment.

The report’s second edition reveals a marked change in perceptions: 63% of executives now agree on the clarity of the business case for sustainability, a substantial increase from the mere 21% recorded in 2022. Additionally, the proportion of executives viewing the cost of sustainability initiatives as outweighing the benefits has plummeted from 53% to 24%. Similarly, those considering sustainability initiatives as a financial burden have decreased by more than half, dropping from 53% to 22%.

The rise in extreme weather events globally, coupled with their escalating costs, significantly contributes to this shifting mindset. Moreover, regulatory pressure and the anticipated return on investment are identified as primary drivers for adopting environmental and social sustainability strategies. A staggering three-quarters (74%) of executives aim to bolster future revenue, up from 52% in 2022, while 64% cite compliance with existing regulations, an increase from 51% in the previous year.

Although organizations have made substantial headway in defining their sustainability agendas, deficiencies persist in crucial areas such as investment and reporting. While 61% of executives report having a clearly defined list of sustainability initiatives for the upcoming three years (up from 49%), the actual annual investment in environmental sustainability initiatives has only marginally increased. Moreover, there’s a notable shortfall in reporting, particularly regarding the measurement and collection of scope 3 emissions. This lack of progress extends to sustainable product design and transparency in disclosing sustainability data.

Cyril Garcia, Head of Global Sustainability Services at Capgemini, emphasizes the urgency of investing in sustainable measures and restructuring business models. He asserts that companies must prioritize sustainability now to reap its benefits in the future, emphasizing that early investment and strategic alignment with sustainability will be instrumental.

The report also sheds light on the ascending focus on the social dimension of Environmental, Social, and Corporate Governance (ESG) within organizations. While a majority concentrate on their employees’ welfare, support for workers in the supply chain remains inadequate. Additionally, there exists a significant perception gap between executives and consumers concerning greenwashing, with a substantial number of consumers globally expressing skepticism toward organizations’ sustainability claims.

Lastly, the study highlights the anticipated role of generative AI in bolstering sustainability efforts, with a notable proportion of executives recognizing its potential and indicating steps to mitigate its environmental impact.

In summary, while executive recognition of the business case for sustainability has surged, the report underscores the imperative need for increased investment and a broader commitment to actualizing sustainable practices across industries.