New Sustainability Study: The “Embracers” Seize Advantage

Knut Haanaes, Balu Balagopal, Ming Teck Kong, Ingrid Velken, David Arthur, Michael S. Hopkins and Nina Kruschwitz co-authored the cover story for the March 2011 issue of MIT Sloan Management Review. To read the complete article, check out other resources, register for free email alerts, and obtain subscription information, please click here.

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How fast are businesses adopting sustainability-driven management? The new  Sustainability & Innovation Study dentifies two distinct camps — “embracers” and “cautious adopters” — and offers a snapshot of how the management future will look.

Here is an Executive Summary of Key Points

Sustainability spending has survived the downturn, with 34% of companies saying that they have seen no change in it in either 2009 or 2010, and almost 60% of companies saying their investments increased in 2010.

Companies are committing to sustainability but investment levels vary, with companies dividing into “embracers” and “cautious adopters.”

Embracer companies are driving sustainability through their operations and have largely succeeded in making robust business cases for their investments.

All companies — both embracers and cautious adopters — see the benefits of strategies such as resource efficiency and waste management.

All companies recognize the brand-building benefits of developing an approach that minimizes their social and environmental impact, with the largest group of respondents (including both embracers and cautious adopters) citing this as among the top 3 benefits.

While even embracer companies still struggle to measure the more intangible business benefits of sustainability strategies in financial terms, these companies are nevertheless acknowledging the value they bring to their business.

Companies across all industries agree that sustainability is essential to remaining competitive.

Embracers are more aggressive in their sustainability spending, but the cautious adopters are catching up and increasing their commitments at a faster rate than the embracers — by 12 percentage points between 2009 and 2010, compared with 1 percentage point for the embracers.

Embracer companies are leading the charge, with seven shared traits demonstrated by those organizations that are gaining advantage via sustainability.

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Knut Haanaes is a partner and managing director in the Oslo office of the Boston Consulting Group, as well as the global leader of BCG’s Sustainability Initiative. Balu Balagopal is a senior partner and managing director in the Houston office of BCG. Ming Teck Kong is a project leader in the Singapore office of BCG. Ingrid Velken is a project leader in the Oslo office of BCG. David Arthur is a consultant in the Oslo office of BCG. Michael S. Hopkins is editor-in-chief of MIT Sloan Management Review. Nina Kruschwitz is an editor and special projects manager at MIT Sloan Management Review.

 


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