Retailers and manufacturers view corporate responsibility as a driver of innovation that can help build growth and profitability rather than a cost.
That’s one of the key findings of research released by accountants KPMG and CIES, the global food business network.
The research also pinpoints the impact the economic downturn is likely to have on companies’ commitment to sustainability and the challenges many businesses still face in identifying priorities in this area.
The report, KPMG/CIES Survey 2008 – A survey into the growth and sustainability issues driving consumer organizations worldwide, analyses the views of over a quarter of the 750+ delegates who attended the CIES World Food Business Summit in Munich, Germany.
Nearly half of those questioned (47.7%) felt sustainability was an important driver of innovation.
This was true of companies worldwide. A majority (56.5%) said sustainability was now a core element of business strategy.
The results also pinpoint the forces driving the sustainability agenda, with over a third of companies (34.9%) identifying ‘stakeholder demand’ over other pressures such as legal requirements, voluntary codes, taxes and carbon costs.
"This confirms the adoption of sustainable business strategies is not primarily driven by formal requirements, but rather by the imperative of business need," said Neil Austin, global chairman, consumer markets, KPMG in the UK.
Gareth Ackerman, joint chairman of the CIES summit committee and chairman of Pick n Pay Holdings, pointed out the sustainability issues facing companies:
"Sustainability is not just about protecting the environment. It has to do with issues such as food security, food safety, job creation and individual prosperity, healthy eating, fair trade and ethical sourcing of products, labor rights, customer loyalty and poverty alleviation."
Just over 80% of the companies surveyed said the greatest challenge they face in developing a sustainability strategy lies in identifying and prioritising issues, developing strategies to meet those issues, and measuring performance.
"The focus has moved away from the publication of a glossy corporate responsibility report to the more challenging exercise of identifying and prioritizing material issues," said Wim Bartels, global sustainability services, KPMG in the Netherlands.
However, the research reveals the surprising number of companies (15.5%) still without any sort of sustainability strategy; with businesses in EMEA the worst offenders (18.6%).
Another cloud is the prospect of an economic downturn and how this might impact companies’ commitment to sustainability. Just over half (52.8%) believe sustainability investment will either be put on hold or reduced in an economic downturn.
The remainder reported the impact will have a neutral or positive impact on sustainability investment.
Further cautious optimism is echoed in executives’ views on future prospects for growth. They reveal a majority of businesses (54.8%) are turning away from diversification, acquisitions and alliances, and towards organic growth.
The survey also highlights those companies most likely to tackle the recruitment and retention hurdle.
Those companies most positive about the impact of sustainability on their bottom line appear also the most concerned about their human capital (39%).
The link is significant given the majority of organisations surveyed regard recruitment and retention as top of the list of challenges to their growth (30.6%) – ahead even of a slowdown in consumer demand (29.7%) and increased costs of raw materials (27%).
Mark Smith, partner from KPMG in Canada, agrees that sustainability is now fundamental to meeting the recruitment challenge. "At KPMG, we consider our corporate responsibility programs to be a significant contributing factor in attracting high caliber graduates," he said.
"After pay and reward the opportunities to volunteer and other such activities are one of the most frequently asked questions during the graduate interview process."