Majority of business leaders to see an increase in sustainability investments: Gartner

Sustainability investments will continue to rise over the next two years by business leaders according to a new survey.

According to Gartner, 87 percent of business leaders expect to see a growth in their organisation’s investment in sustainability over the next two years.

The Gartner survey noted that customers are the primary stakeholder group creating pressure for organisations to invest or act on sustainability issues, selected by 80 percent of executives, followed by investors at 60 percent and regulators at 55 percent.

Kristin Moyer, Distinguished VP Analyst, Gartner said sustainability enables businesses to cope with disruption.

She said, “Economic uncertainty, geopolitical conflict and escalating materials and energy costs are forcing businesses to reexamine all forms of expenditure. This focus on essentialism, in combination with increasing stakeholder desire to see progress on environmental, social and governance (ESG) goals, creates new opportunities for enterprises to grow while mitigating cost and risk.”

The survey found that 86 percent of business leaders see sustainability as an investment that protects their organisation from disruption.

Additionally, 83 percent said sustainability program activities directly created both short- and long-term value for their organisation, and 80 percent indicated that sustainability helped their organisation optimise and reduce costs.

Specifically, the top areas where survey respondents said sustainability programs are mitigating cost increases are energy consumption, business travel and customer transactions.

Moyer said executive leaders are achieving both operational and supply chain savings through their sustainability programs.

She explained, “This kind of ‘two for one,’ where sustainability investment supports a business goal like cost optimisation, significantly enhances the program’s impact by creating a virtuous cycle.”

Sustainability can also enable new value creation and business growth opportunities. Fifty-seven percent of business leaders said the enterprise sustainability program has a strong connection to the results on the income statement, and 42 percent of respondents are leveraging their sustainability activities to drive innovation, differentiation and enterprise growth through sustainable products.

Investing in sustainability can support product differentiation but be wary of greenwashing risks – there are no shortcuts to sustainable growth Moyer said.

“Focus on product attributes that are important to customers and how these priorities shape buying decisions. When viewed through a strategic lens, sustainability can provide a ray of sunshine for businesses during difficult market conditions,” she said.