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Sustainability as a transformation catalyst

Transformation Trailblazers execute sustainability strategies that drive revenue growth.

Sustainability has roared to the forefront of corporate priorities, with 73% of surveyed executives saying their organizations have set a net-zero carbon emissions goal. Customers, employees, investors, business partners, and governments are pressuring corporate management and boards to place sustainability at the top of their corporate agendas.

In fact, recent IBV consumer research revealed that more than 2 in 3 global respondents consider environmental issues to be significantly important to them personally—and they say they’re willing to change their consumer behavior accordingly.

Companies are taking notice. 53% of surveyed organizations view environmental sustainability as one of their top priorities within 3 years, up from 39% that consider it a top priority today.

While 86% of companies have a sustainability strategy, only 35% have acted on that strategy.

But talk is one thing, action and outcomes another. Becoming a truly sustainable enterprise is hard. Only 50% of those organizations that see sustainability as a top priority are effective in achieving their environmental sustainability goals. Dabbling at the edges no longer suffices. Achieving sustainability demands transformation.

To understand how executives are addressing sustainability, the IBM Institute for Business Value (IBV) and Oxford Economics surveyed 1,958 executives across a variety of manufacturing-oriented industries. These executives, located in 32 countries around the world, are significantly involved in defining or executing the sustainability strategies at their organizations.

Organizations combining commitment to sustainability with execution capabilities—and integrating this effort with digital transformation—create win-win situations.

Our study found that 13% of executives are serving as trailblazers among their peers, helping ensure environmental sustainability is front and center as an enterprise strategy, and integrating sustainability with digital transformation.

Sustainability as a business opportunity

To better understand how leaders charged with sustainability approach their roles, we segmented our respondents based on 3 criteria:

  • Sustainability commitment among members of the organization’s Board of Directors and C-level executives
  • Sustainability effectiveness as measured by organization performance on environmentally sustainable business processes in comparison with competitors
  • Sustainability integration as measured by alignment of the organization’s sustainability strategy with the digital transformation/IT strategy.

This segmentation yields 4 sustainability archetypes. Commitment Sideliners (40%) lack a strong commitment to sustainability at Board and executive levels. Execution Stragglers (38%) are committed at the highest levels but lack effective execution on environmental sustainability. Sustainability Strivers (10%) are committed and effective but have not integrated their sustainability efforts with digital transformation.

70% of Transformation Trailblazers are using hybrid cloud to advance their sustainability objectives.

Transformation Trailblazers (13%) are committed and effective on execution of sustainability. They have integrated these efforts with their digital transformation. This archetype stands out in terms of their ability to achieve significantly better environmental outcomes as indicated by carbon reduction relative to competitors. Transformation Trailblazers also have superior business performance in revenue growth.

Sustainability boosts business value: Transformation Trailblazers excel in revenue growth

Sustainability boosts business value: Transformation Trailblazers excel in revenue growth

Download the report to discover 6 primary areas where Transformation Trailblazers stand out from their peers.

 


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Meet the authors

Wayne S. Balta

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, Vice President, Corporate Environmental Affairs, Product Safety and Chief Sustainability Officer


Manish Chawla

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, General Manager, Global Industrial Sector and Chemical, Petroleum, and Industrial Products Industries, IBM Consulting


Jacob Dencik, Ph.D

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, Global Economic Research Leader, IBM Institute for Business Value


Spencer Lin

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, Global Research Leader, Chemicals, Petroleum, and Industrial Products, IBM Institute for Business Value

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Originally published 10 January 2022