Corporate Sustainability Integration Remains Challenging

Corporate sustainability is a universally accepted business priority, but its incorporation into decision-making is still underdeveloped. A recent survey found that although 67% of businesses recognize sustainability as essential to their success, only 37% have embedded it deeply into their operations. This disconnect between intention and action points to major challenges in corporate sustainability initiatives.

One of the biggest barriers is the absence of alignment among finance, IT, and sustainability functions. These functions are crucial to value creation, but in many cases, they suffer from knowledge deficits and a lack of resources that impair their abilities. Fewer than one-third of finance and IT leaders, for example, feel that their functions possess robust sustainability knowledge, preventing them from effectively embedding sustainability into business core strategies. Furthermore, sustainability reporting is often viewed as a compliance-driven task rather than a tool for value creation. Forty-two percent of business leaders see mandatory reporting requirements as a distraction rather than an opportunity to drive meaningful impact.

In an effort to provide solutions to such challenges, the Sustainability Value Creation Partnership has been established by Salesforce, GlobeScan, ERM, Accounting for Sustainability (A4S), and SustainableIT.org. It is an endeavor to bridge the sustainability implementation gap through the detection of hindrances, the provision of practical remedies, and unleashing quantifiable business value. Their study, which involved conducting a survey on 320 finance, IT, and sustainability professionals, explains reasons why businesses cannot fully integrate sustainability into their systems.

The research highlights a unique group of firms called "Advanced Integrators," who have effectively integrated sustainability into their business models. These companies realize much greater financial and operational advantages than their counterparts. They are 1.5 times more likely to state that sustainability activities contribute to sales growth, and they save costs and manage risk better. Also, they are 2.8 times more likely to have high-quality sustainability data, which is an essential component for business decision-making. They owe their success to improved coordination among finance, IT, and sustainability functions, enabling better sharing of data, development of business cases, and strategic alignment.

The study emphasizes that businesses can tap into sustainability value through a tripartite method of finance, IT, and sustainability functions. Finance teams have to be proactively involved in developing robust business cases for investment in sustainability, leveraging facts and figures to measure return on investment in the longer term and beyond immediate profit. Rather than treat sustainability as an independent function, finance chiefs have to share co-ownership of sustainability strategy and incorporate it in financial choices.

Likewise, IT departments are also responsible for integrating sustainability through the creation of sophisticated data systems for effective sustainability reporting and decision-making. The use of artificial intelligence and other digital technologies can greatly improve tracking of sustainability performance. By bringing sustainability insights together and making them available across teams, IT can enable improved cross-functional collaboration and more effective decision-making.

Sustainability teams, however, need to look beyond brand reputation and work towards showing tangible business impacts. They have to work more closely with finance and IT teams to ensure that sustainability efforts are aligned with overall business goals. Also, reframing the focus of sustainability reporting from compliance to actionable insights can enable organizations to use sustainability as a value driver instead of a regulatory compliance.

The research highlights that silo breaking in finance, IT, and sustainability functions is a prerequisite for corporate sustainability success. Companies integrating sustainability fully into their decision-making and data strategies achieve a competitive advantage through higher sales growth, cost savings, and enhanced risk management.

In the future, the Sustainability Value Creation Partnership will keep pushing business-oriented sustainability solutions to help companies move from committing to sustainability to creating meaningful real-world impact. Through collaboration, increased sustainability knowledge within departments, and using sophisticated data systems, companies can not only comply with regulations but also create long-term value and competitive edge.