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Sustainability Plans on Rise Globally, but Progress Still Needed: KPMG

by Marlene Y. Satter

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Almost 55% of U.S. executives say their firms have formal sustainability strategies in place, according to a new survey released Monday. Globally, however, that figure is higher: more than 62% of executives worldwide have implemented formal sustainability policies.

According to the KPMG international study Corporate Sustainability: A Progress Report, large publicly traded companies are more likely to have such policies, with nearly 8 in 10 among them reporting that they have already taken such actions; of smaller, privately held companies, only a bit under half have taken the initiative.

U.S. companies are trying to catch up, however. Add to that 55% already using them another 12% that are working on putting such a policy together, and another 19% that expect eventually to implement a formal sustainability plan.

According to John R. Hickox, who leads KPMG's Climate Change & Sustainability (CC&S) practice in the Americas, companies can be challenged in such actions by "what issues or measures they should use for reporting their environmental health, safety and corporate social responsibility program results to stakeholders—and how to utilize those metrics to transform their business operations."

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With that statement, Hickox has cited one of the issues involved in sustainability programs: Even if companies do have sustainability policies in place, they don’t necessarily communicate their advancement along that course. Among the companies that have policies in place, only one in three have put out reports on their progress.

Other hindrances to such policies include:

  • Lack of common metrics, tools, and information systems that can measure and analyze sustainability programs’ impact
  • Lack of available financing to render sustainability as important as short-term ROI operational programs
  • Lack of a clear and rigorous structure of international regulations to provide planning confidence.

Ted Senko, global head of Climate Change and Sustainability (CC&S) at KPMG and a partner in the US firm, said in a statement, "We are finding that most companies understand what they need to do strategically, but they need help in building the strategic models and information systems to establish how effective they really are at reducing carbon, benchmarking their plans against the standards of their competitors, and optimizing their businesses to manage the challenges of a changing regulatory environment."

He continued. "A business sustainability strategy based on good measurement and analysis is very important in order to assess the financial payback when regulations on emissions and energy use could increase."