Sustainability: From Charity to Environment

Sustainability is not a one-size-fits-all proposition. Its impacts and opportunities are very context-dependent. What is important to one company is not necessarily important to another.


Effective sustainability initiatives are closely linked to company strategy, and successful companies evaluate their sustainability impacts, risks and opportunities across their entire value chain -- from product design through the use and ultimate disposal by or recovery from, the end customer; from the supply chain, facilities and operations, through to distribution and logistics. 


In October 2010, a sample of AICPA, CIMA and CICA industry members in the UK, US and Canada were invited to participate in an online survey. The study delved into issues such as sustainability drivers and strategy, sustainability program scope and priorities, measurement, reporting and assurance, and the finance function’s involvement. 


According to survey respondents, facilities (34%) and operations (34%) were the highest priority business areas, followed by product design (29%), customer use of products (29%), supply chain (25%), end of life product disposal/ recovery (21%) and distribution and logistics (20%).


Though the relative ranking of areas is similar across large companies and SMEs, the latter group is less likely to classify these issues as a high priority. 


(Click image to enlarge)

Exhibit 1: Business area - high priority
Sustainability strategy

In addition to examining the primary sustainability drivers identified by survey respondents, the survey also queried the level of formality and importance that organisations apply to the discipline. Among larger companies, 79% currently have a sustainability strategy compared with only 33% of SMEs.


Just as company size matters in terms of the existence of a formal sustainability strategy, so, too does location (as determined by the country in which each respondent’s association is based). CIMA and CICA respondent companies are more likely than AICPA respondent companies to have formalized sustainability strategies.


Additionally, 81% of CIMA respondents from large companies (with formal sustainability strategies) report that their organization’s sustainability strategies address climate change compared to 49% of CICA respondents (from large companies with formal sustainability strategies) and 44% of AICPA respondents from large companies (with formal sustainability strategies).


CIMA respondents from larger companies (47%) also indicate that their organisations treat sustainability programs as a high priority more frequently than CICA (38%) and AICPA (33%) respondents (see Exhibit 2). Larger companies are more likely to create distinct sustainability offices – corporate functions responsible for executing sustainability strategy – within their organisational structures.


While less than 14% of SMEs in any of the responding companies establish separate sustainability functions, 58% of large CIMA-respondent companies, 45% of large CICA-respondent companies and 36% of large AICPA-respondent companies elect to do so.

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