Sixty-three percent of executives at organizations with sustainability programs say the customer is their most important catalyst for action — but customers aren’t the only stakeholders demanding real change.
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Sustainable Business Strategy for a Positive Social and Environmental Impact
Define your ambitions, set and meet clear goals, and unleash the power of technology.
A growing number of CEOs are identifying sustainability as a top business priority. A 2022 Gartner survey of CEOs and senior business executives shows that social responsibility and environmental, social and governance (ESG) feature on the corporate agenda for about one in five organizations, the most in a decade. (See the FAQ below on how ESG relates to sustainability.)
The survey also confirms that organizations expect to deal with sustainability as a shifting customer issue in 2022-23. That’s consistent with a 2020 Gartner survey in which 63% of executives at organizations with sustainability programs believed the customer to be their most important catalyst for action.
In the coming months, many CEOs will call together a team to develop or revise their long-term strategies for sustainable business. At organizations with sustainability programs, 92% of executives report that sustainability investment is already increasing.
The path ahead is neither clear nor easy, but actionable, objective insights from Gartner enable faster, smarter decisions on this critical priority. Access these complimentary resources today to help build a winning sustainability strategy
Gartner clients: Visit gartner.com for additional insights and tools or to schedule time with an expert.
Sustainability in the 2020s — more spend, more aggressive goals and more stakeholder pressure
Gartner insights show that executives involved with sustainability strategy and initiatives come from organizations at different stages in their sustainable business strategies. Still, most report that investment is increasing and will continue to do so in the next three years.
Other findings from the 2020 Gartner Sustainability Survey (see FAQ for survey demographics):
52% say sustainability transformation is their organization’s strategic ambition.
92% say sustainability spend is increasing at their organization.
36% say more aggressive goals are driving higher sustainability spend.
Sustainability spend has increased by an average of 5.8% since 2017.
Sustainability investment growth is expected to increase by an average of 5.7% over the next three years.
63% say customers are creating the most pressure for action on sustainability.
70% say COVID-19 increased their prioritization of social issues.
36% are pursuing a carbon-neutral goal.
19% say digital and renewable energy are the most used sustainability technologies at their organization.
Sustainable business — complimentary insights and guidance
Sustainable business — complimentary webinars
At the core of sustainable business strategy lie decisions about growth opportunities, risks and costs, technology and leadership.
When it comes to their strategic ambitions and the level of engagement for their enterprises, executives have many viable sustainable business options. They range from doing the minimum through compliance to pursuing new growth opportunities and differentiating through sustainability. But this is a fast-moving area. Regardless of the approach you choose, it’s imperative to sense and respond to stakeholders’ expectations, regulatory interventions and market shifts. Access to capital, talent, growth and the enterprise license to operate are all at stake.
- Growth opportunities
- Risks and costs
- Technology and innovation
- Leadership
Answer key sustainable business questions with actionable insights from Gartner
What is sustainable business?
A sustainable business seeks to create long-term stakeholder value by factoring social, economic and/or environmental impacts into strategic and operational decisions.
The degree of strategic ambition for sustainable business ranges from doing the minimum through compliance all the way to pursuing new growth opportunities and differentiating through sustainability.
Those sustainable businesses expecting to transform and differentiate will need to identify new market opportunities, inflection points and disruptions, and incorporate their plans and response into strategy.
What is the difference between ESG and sustainability?
ESG (environmental, social and governance) is often used interchangeably with sustainability. But ESG is a measure of performance, while sustainability is an outcome.
ESG measures are used to assess the robustness of a company’s governance mechanisms, and its ability to effectively manage its environmental and social impacts. Incorporating systematic ESG performance data alongside financial analysis gives better insight into the overall and long-term performance of the organization.
The objective of sustainability is to create long-term stakeholder value by factoring social, economic and/or environmental impacts into strategic and operational decisions. ESG provides metrics to gauge what is being done about sustainability.
How does corporate social responsibility (CSR) differ from ESG and sustainable business?
CSR refers to corporate policies and programs that an organization implements to benefit its community — the objective being to improve the organization’s reputation or positively impact the retention and loyalty of employees and consumers.
While organizations can use CSR initiatives to achieve ESG targets, CSR initiatives are typically driven by a team or function that operates independently or from within the HR or corporate affairs functions. Sustainable businesses take a more strategic and integrated approach to taking account of social, economic and/or environmental impacts into value creation strategies.
What is sustainable technology?
Sustainability technology includes:
Environmental technology, such as renewable energy and direct air capture
Social technology, such as human capital management (HCM) and vendor management for responsible sourcing
Reporting and process technologies, such as carbon accounting, that enable ESG reporting
Can digital business drive sustainability outcomes?
Digital business can be used to go beyond sustainability compliance by helping enterprises reach targets and enabling new business models and revenue streams.
Digital business and sustainable business outcomes can feed each other. For example, IoT, and data and analytics can optimize wind turbines, reducing costs (a digital business outcome) and greenhouse gas (GHG) emissions (a sustainability outcome). A mobile app can help customers measure and reduce their GHGs. This improves customer engagement (a digital business outcome) and supports sustainability targets like achieving net-zero emissions. A circular economy platform creates new revenue, a business outcome for both digital business and sustainability.
Who was surveyed in the 2020 Gartner Sustainability Survey?
This survey was conducted online during November and December 2020 among 183 respondents from organizations in North America, Europe and APAC with $250 million or more in annual revenue. It covered multiple industries, but we excluded responses from oil and gas, utilities and power generation, given the high intensity of impact on these sectors.
Respondents were screened for director level or above, and were screened out if their organization did not engage in sustainability activities at all or were limited to achieving compliance.
The goal of the study was to understand pressure from stakeholders (customers, employees, investors, regulators and partners) for more aggressive economic, social and environmental sustainability action, and to identify best practices from early adopters.