Sustainability a business opportunity, says BT

However companies seem to make sustainability efforts in markets perceived to have an impact on customers' perceptions of the firm, and mostly center on communication, rather than actual change.

Mumbai

November 2nd, 2007

An international study by the Economist Intelligence Unit, sponsored by BT,
has revealed that organizations are failing to realize business benefits from
sustainability programmes.

The research indicates that, whilst sustainability may be firmly on the
boardroom agenda as organizations compete for a 'responsible' reputation,
executives have yet to find a way to harness it as a commercial force.

While almost half (46 per cent) said that sustainability programmes helped
improve brand value, just one in five (20 per cent) felt they improved
profitability. One third (33 per cent) of respondents admitted that their
company only makes sustainability efforts in markets where it is perceived to
have an impact on customers' perceptions of the firm, and a similar proportion
(31 per cent) admitted that their company's sustainability efforts mostly center
on communication, rather than actual change.

The research went on to identify that sustainability programmes were missing
out on board-level leadership. In two out of five organizations (40 per cent),
the person responsible for sustainability issues did not report directly to the
board, while 23 per cent of organizations had no person responsible for such
matters.

The report indicates that 'Commitment to sustainable practices' was rated the
least important consideration when deciding to partner or collaborate with a
third party company. 'The company's reputation for sustainable practices' was
also rated the least important factor by respondents when considering a role at
a new company.

According to the report, sustainability practices are most firmly embedded in
companies' investor/public relations' activity (32 per cent) and HR functions
(29 per cent). Nearly one quarter of respondents (24 per cent) agreed that staff
at the grassroots rather than senior management primarily drives their
organization's sustainability efforts. More than one third of respondents (37
per cent) have been given specific sustainability goals to achieve as part of
their responsibilities and more than one third (34 per cent) said that their
company's commitment to sustainable practices is not embedded in downstream
suppliers and their supply chains.

According to James Watson, senior editor at the Economist Intelligence Unit,
"Many companies are moving away from mere rhetoric towards real business
initiatives. However, a gap remains between what companies claim they are
achieving in terms of managing their social and environmental impacts and the
extent to which their executives feel involved in these activities. Companies
need to devise strategies that do more to engage staff in sustainability through
their day-to-day activities."

Francois Barrault, CEO, BT Global Services, said: "The link between
sustainability and commercial success is, without doubt, becoming clearer all
the time. Our own sustainability performance is helping us win deals, create new
offerings and build enthusiasm amongst our workforce." Barrault said:
"The key to helping sustainability programmes benefit society, the
environment and profitability is leadership. All organizations, BT included, is
at the start of this journey, but now is the time for CEOs and CFOs to lead from
the front. Our own experience is that sustainability can be a win-win for all
concerned - local communities, emerging economies, the environment and also the
bottom line."