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The fight against global warming and other critical collective environmental threats has led companies around the world to embrace sustainability as a major focus of current and future management. Yet a new survey of chief executives from a variety of smaller businesses suggests the general dedication to the ecological cause isn't being followed--or even regularly scrutinized--in practice.
The findings are contained in the most recent Global Impact Report by the Young Presidents' Organization (YPO), a global leadership community whose members include 34,000 small business executives. Given the select group's reputation for absolute secrecy about what is exchanged between adherents--"Nothing, Nobody, Never" is reportedly the official credo--results of the annual poll being made public is rather exceptional on their own. But with the feedback on sustainability efforts by participating CEOs far less extraordinary, YPO may have wished it kept that secret, too.
The major revelation: Despite general commitment to sustainability objectives, a near totality of the members admit they don't even bother checking what their carbon footprint actually is.
"I was surprised that only 4 percent of respondents measure their organization's direct and indirect emissions, and only 5 percent had data on renewable energy consumption," YPO Chair Raymond Watt told The CEO Magazine.
Input from participants indicated average renewable energy consumption was a mere 38 percent, or a median rate of 20. On the whole, smaller companies reported more dedication to the cause than larger peers.
Businesses with150 employees and less than $100 million in revenue were described as producing better results in seeking to reduce the environmental footprint and using reliable metrics to monitor those efforts. Otherwise--meh.
Part of that iffy application of principles may be the expenses involved, and jitters they inspire.
According to a 2022 McKinsey estimate, reaching "net zero by 2050 will cost an extra $3.5 trillion a year," a big chunk of which will be shouldered by businesses. Reaching that figure, the consultancy said, will require a 60 percent increase on current investment rates--"equivalent to half of global corporate profits, a quarter of world tax revenue," it noted. It will also take an additional $1 trillion to finance swapping of high-emission assets for low-carbon alternatives.
Given these formidable figures, it's little wonder if some founders find themselves putting off the heaviest lifting in that effort until they've built up their companies into bigger, stronger organizations first. Managing your business to help save the planet, after all, becomes a lost cause if you've starved your business while trying to save the planet.
YPO members hail from around the globe, about half of whom are U.S. small- and medium-sized business owners and entrepreneurs. The majority of survey respondents were from North America, filled out by participants from India. Their one commonality: a willingness to reveal the gap between their sustainability ambitions and practices. A large number of peers who answered the poll left questions about their environmental practices blank.
Indeed, most smaller businesses were less eager--or entirely averse--to boast about their sustainability efforts than those in other areas of management focus. Participants reported information on their environmental metrics at considerably lower levels than those measuring their social or governance commitments.
Watt thinks that reticence may reflect a disconnect between what small business CEOs perceive as the risks of reducing their environmental impact, the heavy costs involved, and the urgency of obtaining tangible results in the very near term.
"Last year was the hottest on record, with new highs for air and sea temperatures," Watt told The CEO Magazine. "There's a great emphasis on net zero targets by 2050, but climate change poses a real and present danger, not a future one. The scale of the challenge is."
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21.02.2024
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The fight against global warming and other critical collective environmental threats has led companies around the world to embrace sustainability as a major focus of current and future management. Yet a new survey of chief executives from a variety of smaller businesses suggests the general dedication to the ecological cause isn't being followed--or even regularly scrutinized--in practice.
The findings are contained in the most recent Global Impact Report by the Young Presidents' Organization (YPO), a global leadership community whose........
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