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“Sustainability’s Next Frontier” – Published by MIT Sloan, Boston Consulting

Ninety percent of executives and managers believe that sustainability-focused strategies are necessary to gain and maintain competitive advantage. But the proportion of companies that actually address sustainability challenges is relatively low, according to MIT Sloan Management Review and The Boston Consulting Group’s “Sustainability’s Next Frontier: Walking the Talk on the Sustainability Issues that Matter Most.” While almost two-thirds of executives and managers surveyed rate social and environmental issues as either “significant” or “very significant,” only 40% report them, and just 10% fully address them. The uncovering of this large gap between belief and action is one of the most significant findings of the study. For the past five years, MIT Sloan Management Review and The Boston Consulting Group have jointly assessed how businesses address sustainability challenges. The most recent collaborative report focuses on the most significant social, environmental, and economic sustainability issues based on a survey of more than 1,800 executives and managers from companies worldwide.

The report segments companies into three categories along a spectrum of addressing sustainability issues: Walkers, On the Road, and Talkers. Walkers address all of the company’s significant sustainability issues, while Talkers barely address any sustainability issues at all. Companies that are “On the Road” are in transition, on the way from being Talkers to Walkers.

The “next frontier” to which the report refers is tackling significant sustainability issues: those “that lie at the heart of competitive advantage and long-term viability.” The report identifies the most significant or “material” issues, explores how businesses are addressing them, and isolates the success factors of companies that address sustainability issues most thoroughly. Which sustainability issues are most important varies by industry and business model. For example, mining companies are invested in the development and economic sustainability of the emerging communities in which they operate. On the other hand, the most important social issue to a healthcare provider is the well-being of the community and consumer. However, on a broad level, employee health and well-being, energy efficiency, and competitiveness topped the charts.

The report concludes with four questions businesses should be able to answer to tackle the new frontier and move from a Walker to a Talker:

  1. What are the burning platform sustainability issues for my company?
  2. What are the threats and opportunities inherent in these issues?
  3. What is the business case?
  4. What is the best strategy to approach material issues?

We look forward to next year’s collaboration between MIT Sloan Management Review and The Boston Consulting Group and hope that more companies will have closed the gap between thought and action.

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