The sustainability business case comes into focus

The sustainability business case comes
into focus

But is sustainable action following suit?

% of executives who agree with the statements below

Compared to even one year ago, the number of executives who see the business value of sustainable practices has risen by a remarkable 42 percentage points.

Moreover, 74% of surveyed executives said that increasing future revenue was a motivating factor for adopting environmental and/or social sustainability strategies and initiatives, up from 52% in 2022.

% of executives, by country, who agree with the statement: Our board of directors prioritizes sustainability and is actively engaged with our organization's sustainability strategy (September 2023)

By and large, a company’s board takes the lead in shaping sustainability initiatives. Most executives agreed that their board of directors is actively engaged in green strategy. India had the most engaged boards at 77% while Japan showed the fewest, at only 39%. Of executives with engaged boards, 74% report having clearly defined priorities for sustainability initiatives to implement in the next three years, while the average for all executives sits at 61%.

Companies with a clearly defined priority list of sustainability initiatives to be implemented in the next three years:

49%

September 2022

61%

September 2023

In 2023, 61% of all executives have a defined list of sustainability priorities – up from 49% in 2022. Furthermore, more companies are transforming to sustainable business or operating models.

Why? While public expectations for corporate climate action have risen along with recent wildfires and floods, businesses are largely motivated by compliance. Regulations such as the EU Corporate Sustainability Reporting Directive (CSRD) are pushing 64% of executives in our survey to adopt environmental and/or social sustainability strategies.

CXO Corner

For the CEO

Establish sustainability as a top priority in the boardroom.

In 2022, Capgemini’s research made clear just how vital a role the Board of Directors plays in making sustainability a long-term priority. Happily, our 2023 data reveals that 59% of executives feel that their board is engaging actively with green strategy. These organizations with committed boards have often made more progress on their sustainability journeys than companies with less committed directors.

They are also more likely to center on social sustainability practices. The best course of action for a Chief Executive Officer is to embrace sustainability as an investment opportunity, rather than a pure cost. This change in perspective will help build consensus between the board and the C-suite around environmental actions.

For the CFO

Lead the change by embracing sustainability investing.

Even as climate awareness grows, we have yet to see a commensurate uptick in investment. The average annual investment into sustainability is a mere 0.92% of a company’s revenue. In 2022, this figure stood at 0.91%. All groups surveyed by Capgemini have an annual revenue of over $1 billion, so this slight year-on-year increase has resulted in only $1.4 million more allocated to environmental action.

Chief Financial Officers can lead the change – especially in larger companies, which tend to invest a smaller percentage of their overall revenue into the planet. Our research shows that while on average, smaller companies invest 2.9% of their revenue, larger corporations will typically only earmark 0.42% for environmental initiatives.

Download the full report

For the CEO

Establish sustainability as a top priority in the boardroom.

For the CFO

Lead the change by embracing sustainability investing.

Even as climate awareness grows, we have yet to see a commensurate uptick in investment. The average annual investment into sustainability is a mere 0.92% of a company’s revenue. In 2022, this figure stood at 0.91%. All groups surveyed by Capgemini have an annual revenue of over $1 billion, sothis slight year-on year increase has resulted in only $1.4 million more on average per company allocated to environmental action.

Download the full report