Major gap between how boards and C-suite think about sustainability, shows research
Most firms see their sustainability strategy as separate from the commercial business, finds survey from EY
New research has highlighted a “notable” difference between how companies’ board members think about sustainability, compared with their senior leaders.
A survey of 200 of Europe’s “most senior business leaders” found that “when they look at their sustainability strategies, boards and management teams see two different things”.
While more than 80% of board chairs or non-executive directors believe their sustainability strategy sits completely separately from the company’s business strategy, only a quarter of CEOs and C-suite executives feel the same.
Similarly, 81% of board members believe sustainability initiatives are the first to be cut when times are hard, compared with just a third of senior leaders.
“The gap between boards’ and senior leaders’ views on sustainability is notable, but the differences between these two groups’ perceptions of each other are even more startling,” wrote accountancy firm EY, which undertook the survey.
Almost all (94%) board members said the board understood the risks and opportunities sustainability brought to the business, compared with 76% of their C-suite. The same proportion of board members believe their companies have adequate resourcing for sustainability, compared with 67% of C-suite.
Less than half (49%) of the senior leaders surveyed thought their boards understood the “intricacies and trade-offs of sustainability” while 87% of board members felt they did.
“Boards have a much higher opinion of themselves when it comes to their approach to sustainability,” said EY.
Sustainability on the sidelines
The majority (55%) of companies in the survey said they see sustainability as something separate from their commercial business, although 27% claimed to have “deeply embedded” it into their business and leadership teams.
The latter group is more confident in their business outlook for the next 12 months, according to EY. 90% of them feel they have adequate financing, compared with just 26% of other companies.
“Sustainability is not being integrated into overall business strategy – it’s seen as a separate endeavour,” said EY.
“One reason sustainability is getting sidetracked is that it seems to be struggling to build its profile within businesses.”
Less than a fifth of those surveyed said their companies’ sustainability strategy focused on long-term issues or that it aligned with their wider business purpose.