Brand Management Versus Value Creation

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The business case for sustainability is now undeniable. There is clear evidence that organizations which focus as much on purpose as profit enjoy extensive financial and nonfinancial dividends, from higher growth to improved customer satisfaction and employee loyalty.

How ready are organizations—and their leaders—to seize this opportunity?

In Australia, 41% of C-suite leaders say their organization has a sustainability strategy that has been acted upon and clearly communicated, in line with global average (43%). A further 74% of C-suite leaders say their CEO is personally committed to sustainability. Interestingly, just 24% of employees would agree.

Percent indicating there is a sustainability strategy in place that has been acted upon and clearly communicated

Percent indicating the CEO is personally committed to advancing sustainability and progress has been made

This disconnect has two possible dimensions: Senior leaders are overconfident in their CEO’s willingness to engage in sustainability transformation, or CEOs need to do a better job of communicating their commitment throughout the entire organization. Leaders must take an honest appraisal of which factor is at play at their organization. A “pulse check” of employee attitudes should guide the sustainability strategy itself as well as the internal marketing and communications plan.

There are indications that Australian companies are still at the early stages of their understanding of sustainability and the value it can bring their organization and wider society. When asked why their organization was embarking on sustainability action, 45% of C-suite leaders cited brand-management concerns—they wanted to be seen as socially responsible and reputable or to use sustainability for competitive differentiation. Far fewer said value creation was the driving force behind their sustainability strategy.

C-suite perceptions of the driving force behind company’s approach to sustainability?

If organizations in Australia only see sustainability as a brand-building exercise, they miss the opportunity to embed the transformative changes to their business and operating models that will unlock growth. Organizations that challenge outdated perceptions around sustainability will make the biggest strides ahead. Our global research also shows that when value creation is the driving force behind a company’s approach to sustainability, much more progress is anticipated in fully embedding sustainability into the company’s strategy and operations.

Now is the time to educate leaders about new business economics and the role sustainability can play in delivering value for people, planet and profit.

Percent indicating great deal of or significant progress