Sustainability has become a mainstream concern for companies, with heightened expectations from investors, regulators, government, employees and the public—according to new research from UK-based quality assurance provider Intertek, 74 percent of C-suite level respondents agree that customers and other stakeholders are demanding that companies do more in relation to sustainability.
The firm’s new study finds almost three-quarters of companies believe there are too many ESG reporting standards and measures, with 85 percent calling for greater clarity. One big reason is that various stakeholder groups are paying more attention—83 percent agree that government and politicians are placing greater importance on improving sustainability performance, while 79 percent feel there is greater awareness on this issue from employees, and 83 percent from the general public.
The sheer complexity of corporations’ global value chains and the risks inherent at each level are also highlighted in the survey findings—65 percent of respondents say they find it difficult to understand their supply chain beyond those they have a direct relationship with, and 57 percent said that they do not know how to assess the relationships within their companies’ supply chain.
Three-quarters of respondents (76 percent) believe that companies take on risk by not assessing their full supply chain, while over 90 percent acknowledged that at least some elements of their company supply chains would receive a poor sustainability report if they were to be fully audited.
Stakeholders are now less willing to accept sustainability claims at face value
Over three-quarters of respondents would welcome a simplified audit program to benchmark and assess their company’s sustainability footprints.
“The world is changing at the speed of light in multiple directions, increasing the complexity of companies’ operations and in response, stakeholders are seeking genuine reassurance that corporations take an end-to-end sustainability approach across their entire value chain,” said André Lacroix, CEO of Intertek, in a news release.
“C-suite decision-makers recognize there are greater demands—from all angles—to improve their sustainability performance and disclosures, and our research shows that 71 percent believe there are currently too many reporting standards,” he added. “This is the paradox facing executives, as they need a way to authenticate the sustainability they are building into the fabric of their businesses.
“With supply chains becoming ever more complex, the importance of managing risk at every level has only grown in importance. In short, companies want a better way to navigate the multitude of reporting standards that exist and evidence their commitment to end-to-end sustainability as a corporation,” he concluded.
The research was conducted online by FTI Consulting from 30 Aug to 3 Sept 2019 with n=550 UK-based business leaders. Respondents were profiled by size (SME and Large companies), industry and type of company (private or publicly listed).