BCG links sustainability, profit in new study

A new study released jointly today by the Boston Consulting Group and MIT Sloan Management Review suggests that more than two-thirds of global executives plan to invest more heavily in sustainability practices in 2011. 69 percent of the 3,100 business leaders polled by the pair "plan to step up their investment in and management of sustainability this year." Roughly one quarter (26 percent) of respondents indicated that they "plan no change" in 2011, and only 2 percent plan to scale back investment in sustainability.

The report, entitled Sustainability: The ‘Embracers’ Seize Advantage, depicts a two-tracked business world of companies that are making tangible, significant investments in sustainability—the "embracers"—and companies that are hesitant to get in on the act, called the "cautious adopters." Between the two groups, the "embracers" have indeed seized the advantage, the report's authors say. "Embracers are significantly more confident about their competitive position than non-embracers are," the study shows. 70 percent of "embracers" think that their company outperforms their competitors—in business, not just sustainability. Compare that to just 53 percent of "cautious adopters" who feel the same, and a disparity starts to take shape. Businesses that embrace emerging trends and are willing to take risks (i.e. investing in sustainability), the authors argue, are those that stand to reap the greatest benefits when emerging trends bear fruit.

What specific benefits await these risk-takers, these intrepid "embracers" of sustainability? Well, for one, 66 percent of "embracers" note that their sustainability initiatives have resulted in increased profits, compared to just 23 percent of "cautious adopters" who can report the same. And where do these profits come from? Roughly 50 percent see "improved brand reputation" as the most compelling reason to adopt sustainability initiatives in the workplace.

Knut Haanaes, BCG partner and co-author of the report, stressed the importance of getting onboard with the sustainability wave—even if the "embracers" have already cashed in by taking risks earlier in the game. "Most companies—whether currently embracers or not—are looking toward a world where sustainability is becoming a mainstream, if not required, part of the business strategy," he said. "Those not already putting sustainability at the heart of their business will need to do so in the near term."

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Study: More than two-thirds of companies plan to increase their commitment to sustainability this year, despite the tough economy