29 November 2024
IBM just released its State of Sustainability Readiness Report 2024. The biggest takeaway—regardless of geographic region or industry—is that there’s a chasm between what organizations must do to achieve their sustainability goals and what they’re actually doing. This disconnect, according to the research, might hinge on perception gaps.
The way CEOs view their organization’s challenges, readiness and resilience often differs from how VPs and directors regard the same issues. At an industry level, the report revealed that the greatest perception gaps come from the banking and finance sector.
Perception gaps can adversely impact leaders’ ability to align on and work toward achieving sustainability goals. Data, as it turns out, might be at the core of the perception gap in this industry.
Turn good intentions into action
The weekly Think newsletter provides access to news and research on sustainability, AI and more.
The report shows that the banking and finance industry ranks climate risks as its top sustainability challenge. Yet it was the only industry surveyed to rank measurement and analytics challenges among its top three sustainability issues. Additionally, 60% of respondents in banking and finance identified improving accuracy of reporting as the top benefit they would gain or appreciate from implementing new technology or IT for sustainability (compared to just 29% globally).
While 57% of CEOs in banking and finance said they were very prepared to deal with impacts from climate risks on their supply chain, only 28% of VPs and directors agreed. This disparity represents the greatest perception gap in the whole study. Banking and finance leaders also disagreed when it came to their perceived readiness to deal with climate risks that impact finances, with 62% of CEOs feeling very prepared versus 37% of VPs and directors.
Inconsistent or unclear data could be exacerbating the ability for leaders to align on and achieve sustainability goals.
A significant majority of leaders, 88%, in the banking and finance industry plan to increase investments in IT for sustainability over the next 12 months, matching the global average. The perception gap begs the question: how will leaders decide how to allocate and prioritize those investments when they have fundamentally differing views on their organization’s sustainability strengths and weaknesses? They need the right data, the right view and the right tools to close the perception gap and ensure they are on track to meet sustainability goals.
In banking and finance, the ability to capture, calculate and consolidate financed emissions across investment portfolios and asset classes is key. Equally crucial is the ability to track greenhouse gas (GHG) emissions performance, align with environmental, social and governance (ESG) frameworks and develop clear GHG reduction plans.
The first step to closing the perception gap and driving sustainability progress in this industry is to ensure that CEOs, VPs and directors can easily access the same data in a single source dashboard. After all, it’s harder to have different perceptions of an organization’s sustainability strengths and weaknesses when everyone is equipped with the relevant data to inform decision-making.
Leaders who are sharing the same data are more likely to share the same understanding of what they need to do to ensure their organization’s climate resilience efforts are on track.
Explore sustainability solutions for the banking and finance industry
Resources
Discover how to turn sustainability insights into action and take the next steps to harness the power of generative AI.
Get an inside look at the trends shaping the world of sustainable business—and the insights that can help drive transformation.
Identify the best asset performance management (APM) software that fits your needs.
When you embed sustainability, it becomes a business transformation accelerator versus what it is in so many organizations—a reporting or accounting exercise.
