PUBLICIS SAPIENT EXECUTIVE SUSTAINABILITY RESEARCH SURVEY

Partnering with Microsoft

Executives have a positive outlook on the future of their sustainability goals, with all respondents believing they will achieve their sustainability goals within their set timeframe.

As the world continues to recover from a global pandemic and people begin to understand the new normal, we can all start to think about what is next. While not a new issue, sustainability is one place where businesses can focus on improving their practices. But how can sustainability fit into a company’s overall strategy?

Publicis Sapient partnered with Ipsos, the world’s third largest insights and analytics firm, to interview high-level executives working at medium to large companies in the agriculture, airlines, energy, manufacturing, midstream, oil & gas, and utilities industries about their opinion on sustainability, how it fits into their companies’ strategies, and what are some of the cost benefits and limitations.

KEY FINDINGS FROM THIS RESEARCH

• Executives are prioritizing sustainability at their companies and are confident they will be able to achieve their sustainability goals.
• Though most high-level executives are supporters of sustainability goals, the pressure to achieve these goals primarily comes from a sense of social responsibility and aiming to improve the company’s reputation.
• Overall, executives say their motivation for their sustainability goals are influenced primarily by customers and internal pressure, while pressure from key stakeholders and government regulation is more secondary.
• While all executives are confident they can achieve their goals in their set time frame, in the case of a recession, sustainability goals may take a back seat.

DETAILED FINDINGS

Overall, C-Suite and VP level executives view sustainability as an important aspect of their companies’ goals. The majority report that focusing on the environmental impact of their business (83%), incorporating sustainability into strategic decision-making (84%), and focusing on sustainability (78%) are essential or high priority items at their respective companies.

TOP 5 ESSENTIAL/HIGH PRIORITY ITEMS BY INDUSTRY

• Meeting financial targets/meeting shareholders needs: 95% (Total), 99% (Manufacturing), 95% (Energy)
• Maintaining reputation/brand and preventing damage: 90% (Total), 93% (Manufacturing), 90% (Energy)
• Finding innovative ways to meet customer needs: 85% (Total), 81% (Manufacturing), 85% (Energy)
• Incorporating sustainability into strategic decision-making: 84% (Total), 80% (Manufacturing), 84% (Energy)
• Focusing on the environmental impact of our business: 83% (Total), 79% (Manufacturing), 83% (Energy)

THE TOP SUSTAINABILITY GOALS COMPANIES ARE AIMING TO ACHIEVE ARE:

• 83%: Decreasing carbon emissions from the business
• 68%: Increasing the share of renewable energy sources used
• 71%: Decreasing waste from production as well as using more recycled materials
• 21%: Participating in carbon project financing (just 1 in 5)

Significantly more executives in the manufacturing industry report decreasing waste from production and using more recycled materials as a sustainability goal than executives in the energy industry (88% and 57%, respectively). However, energy executives are more focused on participating in voluntary carbon markets or offsets (41%) and participating in carbon project financing (33%) than manufacturers (22% and 11%, respectively).

Executives say the primary motivator for these goals is social responsibility and the feeling that it is the right thing to do (76%), followed by ensuring the business can continue to grow (62%) and maintaining or improving their company’s public reputation (43%).

While the majority agree that improving sustainability practices is a good long-term business decision (96%), and that customers will expect them to do so in the next five years (94%), far fewer agree that the pressure to achieve their sustainability goals will drive significant disruption for their business in the next five years (67%).

CORPORATE SUSTAINABILITY FOCUS

• 86%: Increasing efficiency (Manufacturing)
• 71%: Increasing efficiency (Energy)
• 80%: Lowering energy and manufacturing costs from sustainable sources (Manufacturing)
• 47%: Lowering energy and manufacturing costs from sustainable sources (Energy)

While sustainability is rated as a top priority at the moment, executives indicate that in the case of lost earnings or changes in the economic landscape, their sustainability goals may become less important.

Companies primarily are relying on increased efficiency to achieve their sustainability goals (80%). Additionally, about two in three say they also plan on lowering energy and manufacturing costs from sustainable sources (67%) as well as making changes to their energy or fuel mix (57%).

A majority of companies have a long-term time frame for their sustainability goals, with about two thirds (61%) planning on achieving their goals in three years or more. Thirty-nine percent plan on achieving their goals within the next one to three years. However, regardless of the time frame set, nearly all executives say it is likely they will achieve their goals within their set time frames.

Relatedly, most executives also believe they are closer to achieving their sustainability goals than the rest of their industry is (69%) and that they are more committed to their goals than the rest of the industry (81%).

A majority of respondents believe that their earnings will grow by 5-10% (40%) or less than 5% (43%) from achieving their sustainability goals. However, most are unwilling to trade off more than 5% of their earnings growth in order to achieve those goals (74%). Additionally, the majority of executives say they will not exit a profitable business or divest a profitable asset in the next five years to achieve their sustainability goals (58%).

One in five (21%) report that the current inflation rates have made them decrease their sustainability targets and, in the case of an economic downturn, two in five (43%) say it would make their sustainability goals less important.

Full Annotated Questionnaire

These are the findings of an Ipsos/Publicis Sapient poll conducted between May 17–June 13. For this survey, a sample of 254 adults—C-Suite and VP level Executives from a range of medium/large industries from the continental U.S., Alaska, and Hawaii—was interviewed online in English. The poll has a credibility interval of plus or minus 7.5 percentage points for all respondents.

Question #1: TO WHAT EXTENT WOULD YOU SAY YOUR COMPANY PRIORITIZES EACH OF THE FOLLOWING?

Essential/high priority (Total N=254):

• Meeting financial targets/meeting shareholders needs: 95% (Low/not a priority: 2%)
• Maintaining reputation/brand and preventing damage: 90% (Low/not a priority: 2%)
• Finding innovative ways to meet customer needs: 85% (Low/not a priority: 1%)
• Incorporating sustainability into strategic decision-making: 84% (Low/not a priority: 2%)
• Focusing on the environmental impact of our business: 83% (Low/not a priority: 2%)
• Staying current with new trends and/or technology: 78% (Low/not a priority: 3%)
• Focusing on sustainability: 78% (Low/not a priority: 2%)
• Being agile and adapting quickly to what is going on in the world: 77% (Low/not a priority: 2%)
• Investing in infrastructure and tools to improve sustainability of the company: 71% (Low/not a priority: 2%)
• Leading the field with new trends and/or technology: 68% (Low/not a priority: 6%)

Specifics:

• Meeting financial targets/meeting shareholders needs: Essential 67%, High priority 28%, Medium priority 4%, Low priority 1%, Not a priority *, I don’t know —
• Maintaining reputation/brand and preventing damage: Essential 51%, High priority 39%, Medium priority 8%, Low priority 2%, Not a priority *, I don’t know —
• Finding innovative ways to meet customer needs: Essential 36%, High priority 49%, Medium priority 14%, Low priority 1%, Not a priority —, I don’t know —
• Incorporating sustainability into strategic decision-making: Essential 32%, High priority 52%, Medium priority 15%, Low priority 2%, Not a priority —, I don’t know —
• Focusing on the environmental impact of our business: Essential 33%, High priority 50%, Medium priority 15%, Low priority 2%, Not a priority —, I don’t know *
• Staying current with new trends and/or technology: Essential 25%, High priority 54%, Medium priority 19%, Low priority 3%, Not a priority *, I don’t know —
• Focusing on sustainability: Essential 28%, High priority 50%, Medium priority 20%, Low priority 2%, Not a priority —, I don’t know —
• Being agile and adapting quickly to what is going on in the world: Essential 28%, High priority 49%, Medium priority 21%, Low priority 2%, Not a priority *, I don’t know —
• Investing in infrastructure and tools to improve sustainability of the company: Essential 23%, High priority 48%, Medium priority 26%, Low priority 2%, Not a priority *, I don’t know —
• Leading the field with new trends and/or technology: Essential 26%, High priority 42%, Medium priority 27%, Low priority 4%, Not a priority 1%, I don’t know —

Question #2: WHICH OF THE FOLLOWING ARE SUSTAINABILITY GOALS FOR YOUR BUSINESS? (Select all that apply)

• Decreasing our carbon emissions from our business: 83%
• Decreasing waste from production and/or using more recycled materials: 71%
• Increasing share of renewable energy sources used: 68%
• Helping our customers decrease their carbon emissions: 55%
• Helping or requiring decreased carbon emissions from our suppliers: 52%
• Participating in voluntary carbon markets or carbon offsets: 35%
• Improving access to our services among underserved communities: 26%
• Participating in carbon project financing: 21%
• Other: 6%
• None of the above: —

Question #3: WHAT ARE THE PRIMARY REASONS YOU WANT TO ACHIEVE THESE SUSTAINABILITY GOALS? (Select up to three)

• Social responsibility/it is the right thing to do: 76%
• Ensuring the business can continue to grow in the future: 62%
• Maintain or improved public reputation: 43%
• To comply with regulations: 36%
• Maintain or increase customer base: 25%
• Pressure from key stakeholders: 17%
• Opportunities for new investors: 16%
• Maintain or increased profits: 16%
• Other: 1%
• None of the above: —

Question #4: HOW IS YOUR COMPANY PLANNING ON ACHIEVING ITS SUSTAINABILITY GOALS? (Select all that apply)

• Increased efficiency: 80%
• Lowering energy & manufacturing costs from sustainable sources: 67%
• Changes to energy or fuel mix: 57%
• Carbon offsets: 40%
• New business creation: 37%
• Asset/business divestitures: 24%
• Other: 6%
• None of the above: —

Question #5: IN WHAT TIME FRAME DOES YOUR COMPANY PLAN TO ACHIEVE A SIGNIFICANT PORTION OF YOUR SUSTAINABILITY GOALS?

• In the long term (3+ years): 61%
• In the short term (1-3 years): 39%

Question #6: HOW LIKELY DO YOU THINK IT IS THAT YOUR COMPANY WILL ACHIEVE ITS GOALS IN THAT TIME FRAME?

Among those with short term time frame (N=98):

• Very Likely: 52%
• Somewhat Likely: 48%
• Not very likely: —
• Not at all Likely: —
• Likely: 100%
• Not likely: —

Among those with long term time frame (N=156):

• Very Likely: 48%
• Somewhat Likely: 49%
• Not very likely: 3%
• Not at all Likely: —
• Likely: 97%
• Not likely: 3%

Question #7: NOW CONSIDER YOUR SUSTAINABILITY GOALS RELATIVE TO YOUR COMPETITORS. HOW CLOSE DO YOU BELIEVE YOU ARE TO ACHIEVING YOUR SUSTAINABILITY GOALS COMPARED TO THE REST OF THE INDUSTRY’S GOALS?

• Much closer: 22%
• Somewhat closer: 47%
• Somewhat further: 21%
• Much further: 4%
• Don’t know: 6%
• Closer: 69%
• Further: 26%

Question #8: AGAIN CONSIDERING YOUR SUSTAINABILITY GOALS RELATIVE TO YOUR COMPETITORS, HOW COMMITTED TO YOUR SUSTAINABILITY GOALS DO YOU BELIEVE YOUR COMPANY IS RELATIVE TO THE REST OF YOUR INDUSTRY?

• Much more committed: 31%
• Somewhat more committed: 50%
• No difference: 13%
• Somewhat less committed: 4%
• Much less committed: *
• Don’t know: 2%
• More committed: 81%
• Less committed: 4%

Question #9: HOW WOULD YOU RATE THE SPONSORSHIP AND ENGAGEMENT OF EXECUTIVE LEADERS IN YOUR SUSTAINABILITY GOALS?

• Chief Executive Officer (CEO): Supporter 63%, Enthusiast 34%, Critic 2%, Neutral 2%
• Chief Financial Officer (CFO): Supporter 51%, Enthusiast 29%, Critic 5%, Neutral 15%, N/A *
• Chief Human Resources Officer (CHRO): Supporter 43%, Enthusiast 34%, Critic 2%, Neutral 18%, N/A 3%
• Chief Operating Officer (COO): Supporter 53%, Enthusiast 29%, Critic 3%, Neutral 6%, N/A 9%
• Chief Technology Officer: Supporter 42%, Enthusiast 32%, Critic 5%, Neutral 15%, N/A 7%

Question #10: DO ANY OF THE FOLLOWING STATEMENTS APPLY TO YOUR COMPANY?

• Sustainability is incorporated into strategic decision making: Yes 95%, No 5%
• Sustainability is incorporated into capital investment: Yes 78%, No 12%, Don’t Know 10%
• Executive performance metrics are tied to meeting or exceeding corporate sustainability goals: Yes 63%, No 26%, Don’t Know 11%
• Sustainability is calculated into return-on-investment capital: Yes 48%, No 35%, Don’t Know 18%

Question #11: HOW IMPORTANT, IF AT ALL, ARE YOUR COMPANY’S SUSTAINABILITY GOALS TO THE FOLLOWING GROUPS?

• Employees: Important 94% (Very Important 39%, Somewhat Important 55%), Not Important 6% (Not very important 6%, Not at all important —)
• Investors: Important 93% (Very Important 53%, Somewhat Important 40%), Not Important 7% (Not very important 7%, Not at all important *)
• Regulators: Important 93% (Very Important 36%, Somewhat Important 49%), Not Important 1% (Not very important 14%, Not at all important 1%)
• Customers: Important 92% (Very Important 47%, Somewhat Important 45%), Not Important 8% (Not very important 8%, Not at all important —)
• The General Public: Important 87% (Very Important 36%, Somewhat Important 52%), Not Important 13% (Not very important 12%, Not at all important 1%)

Question #12: WHAT PERCENT EARNINGS (EPS) GROWTH DO YOU ANTICIPATE FROM ACHIEVING YOUR SUSTAINABILITY GOALS?

• 0%: 9%
• Less than 5%: 43%
• 5-10%: 40%
• Greater than 10%: 8%

Question #13: WHAT PERCENT OF EARNINGS GROWTH DO YOU BELIEVE YOUR COMPETITORS WILL GAIN FROM ACHIEVING THEIR SUSTAINABILITY GOALS?

• 0%: 11%
• Less than 5%: 62%
• 5-10%: 24%
• Greater than 10%: 3%

Question #14: WHAT PERCENT OF EARNINGS (EPS) WOULD YOU BE WILLING TO TRADE OFF TO ACHIEVE YOUR SUSTAINABILITY GOALS AT YOUR COMPANY?

• 0%: 15%
• Less than 5%: 59%
• 5-10%: 24%
• Greater than 10%: 2%

Question #15: WHAT PERCENT OF EARNINGS (EPS) DO YOU BELIEVE YOUR COMPETITORS WOULD BE WILLING TO TRADE-OFF TO ACHIEVE THEIR SUSTAINABILITY GOALS?

• 0%: 20%
• Less than 5%: 67%
• 5-10%: 12%
• Greater than 10%: 1%

Question #16: DO YOU EXPECT TO EXIT A PROFITABLE BUSINESS OR DIVEST A PROFITABLE ASSET IN THE COMING FIVE YEARS TO ACHIEVE YOUR SUSTAINABILITY GOALS?

• Definitely Yes: 8%
• Probably Yes: 21%
• Probably No: 41%
• Definitely No: 17%
• Don’t know: 12%
• Yes: 30%
• No: 58%

Question #17: TO WHAT EXTENT DO YOU AGREE OR DISAGREE WITH THE FOLLOWING STATEMENTS?

Summary (Agree/Disagree):

• Improving sustainability practices are a good long-term business decision: 96%/4%
• For the good of our planet, it is important that my industry achieve its sustainability goals: 95%/5%
• I believe customers will expect us to improve our sustainability practices over the next five years: 94%/6%
• Increased pressure from regulators will force us to improve sustainability in our business over the next five years: 87%/11%
• The increased pressure from investors over the next five years will help improve sustainability in our business: 86%/12%
• Improving sustainability practices are a good short-term business decision: 81%/19%
• The pressure to achieve sustainability goals will drive significant disruption in my business in the next five years: 67%/31%
• The U.S. is falling behind the rest of the world on sustainability practices: 61%/35%

Specifics:

• Improving sustainability practices are a good long-term business decision: Strongly agree 69%, Somewhat agree 27%, Somewhat disagree 2%, Strongly disagree 1%, Don’t know *
• For the good of our planet, it is important that my industry achieve its sustainability goals: Strongly agree 66%, Somewhat agree 29%, Somewhat disagree 4%, Strongly disagree 1%, Don’t know *
• I believe customers will expect us to improve our sustainability practices over the next five years: Strongly agree 59%, Somewhat agree 44%, Somewhat disagree 6%, Strongly disagree —, Don’t know *
• Increased pressure from regulators will force us to improve sustainability in our business over the next five years: Strongly agree 41%, Somewhat agree 45%, Somewhat disagree 9%, Strongly disagree 2%, Don’t know 2%
• The increased pressure from investors over the next five years will help improve sustainability in our business: Strongly agree 38%, Somewhat agree 48%, Somewhat disagree 11%, Strongly disagree 2%, Don’t know 2%
• Improving sustainability practices are a good short-term business decision: Strongly agree 21%, Somewhat agree 52%, Somewhat disagree 15%, Strongly disagree 4%, Don’t know *
• The pressure to achieve sustainability goals will drive significant disruption in my business in the next five years: Strongly agree 24%, Somewhat agree 43%, Somewhat disagree 25%, Strongly disagree 6%, Don’t know 2%
• The U.S. is falling behind the rest of the world on sustainability practices: Strongly agree 21%, Somewhat agree 40%, Somewhat disagree 25%, Strongly disagree 11%, Don’t know 4%

Question #18: HOW MUCH OF A ROLE, IF ANY, DO YOU EXPECT DIGITAL TRANSFORMATION OF YOUR MARKET(S) TO PLAY IN INCREASING THE SUSTAINABILITY OF YOUR BUSINESS?

• No role: 2%
• Minor role: 39%
• Major role: 59%

Question #19: IN WHAT WAYS, IF ANY, HAS THE RECENT GEOPOLITICAL AND ECONOMIC CLIMATE IMPACTED YOUR SUSTAINABILITY STRATEGY? (Select all that apply)

• Influenced us to create more ambitious sustainability targets: 36%
• The geopolitical situation influenced us to create sustainability goals: 26%
• Inflation rates made us decrease our sustainability targets: 21%
• The geopolitical situation has influenced us to defer our sustainability goals: 15%
• Inflation rates made us increase our sustainability targets: 15%
• Other: 4%
• None of the above: 31%

Question #20: IN WHAT WAYS, IF ANY, WOULD AN ECONOMIC DOWNTURN OR RECESSION IMPACT THE IMPORTANCE OF ACHIEVING YOUR SUSTAINABILITY GOALS?

• Would become much more important: 10%
• Would become somewhat more important: 15%
• Would become somewhat less important: 32%
• Would become much less important: 10%
• Would have no impact on the importance of our sustainability goals: 32%
• More important: 25%
• Less important: 43%

Question #21: HOW DO YOU GET MOST OF YOUR NEWS? (Select all that apply)

• Online/internet news: 79%
• Mobile News apps: 54%
• Social media (Twitter, Facebook): 41%
• Television broadcast news: 26%
• Television cable news: 25%
• Print newspapers/magazines (and their online versions): 23%
• Radio: 21%
• None of the above: 1%

ABOUT THE STUDY

This research was conducted by Publicis Sapient in partnership with Microsoft. The survey was fielded by Ipsos, the world’s third largest insights and analytics company, between May 17 and June 13, 2022. The survey was conducted online in English among 254 C-Suite and VP level Executives from medium and large companies in the agriculture, airlines, energy, manufacturing, midstream, oil & gas, and utilities industries in the continental U.S., Alaska, and Hawaii.

For more information:

DAVID RAMSEY
david.ramsey@microsoft.com
sapient

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