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More Companies Profit from Sustainability, Survey Finds

Source: Environmental

Sustainability is paying off for a growing number of companies with 37 percent of surveyed executives reporting a profit from their efforts, a 23 percent rise over last year, according to a global study by the MIT Sloan Management Review and The Boston Consulting Group.

The fourth annual study, which is based on a survey of 2,600 executives and managers from companies around the world, found nearly half of the companies have changed their business models as a result of sustainability opportunities, a 20 percent jump over last year.

The survey results are outlined in the report “The Innovation Bottom Line”, which was released this week. This year’s report focuses on the 23 percent of surveyed companies, known as Sustainability-Driven Innovators, that are not only profiting from their sustainability efforts, but also changing their business models to generate that profit.

Half of the survey respondents who had changed three or four business model elements said they profited from their sustainability activity, compared with only 37 percent of those who had changed only one element of their business model, the report said.

Companies in resource-intensive industries are particularly tuned into sustainability and in an effort to trim costs are turning to their supply chains to reduce energy use, simplify packaging and mitigate commodity price risks, the report said.

But plenty of companies still struggle to view sustainability as an opportunity, the survey found. Almost half of the survey respondents (46 percent) find it difficult to quantify the intangible effects of sustainability and 37 percent say it conflicts with other priorities, the report said.

Four in ten said that the higher operational costs of sustainability take away from profit, and 33 percent cited increased administrative costs connected with sustainability programs as another profit drain.

Early findings from the survey, which were reported late last year, found North American companies are still lagging considerably in the integration of sustainability compared to their peers in other regions of the world.