CEOs are employing sustainability for long-term business success.
Yesterday, consulting firm McKinsey held a virtual gathering of a group of CEOs to discuss the current business climate. Most feel well-prepared for an economic downturn, if it comes.
In addition to bolstering balance sheets, many expressed sustainability and decarbonization as driving forces for a stronger future. According to McKinsey, a sustainability strategy can reduce costs and improve operating profits by as much as 60%.
“We’re focused on climate change and the role that our company can play in addressing the need to decarbonize our industry,” says engine and power generator Cummins Inc. incoming CEO Jennifer Rumsey—“and on how we use that challenge to create innovation and opportunity for our business, for our employees, and for the customers that we serve.”
“What’s driving us is a combination of all of the turbulence in the world, as well as the push for sustainability. Innovation is really what brings the two of them together and allows us to overcome them,” says energy services Weatherford CEO Girish Saligram.
In addition to the way environmental practices have been incorporated, many CEOs continue to reveal how practices employed during the COVID lockdowns have played out in a positive way. “We’re stronger than we were coming into the pandemic,” New Balance CEO Joe Preston told event media organizer Fortune. “We’ve been around since 1906, but the way we’re operating today, the speed that we’re operating with, is just light years of the way it’s been.”
Critics contend that anything done specifically for environmental reasons will hurt the bottom line, as it is an unnecessary cost and not a responsible use of shareholder money.
That said, according to McKinsey, adding sustainable practices into business plans can increase an organization’s chance of profiting. In fact, a Nielsen study shows that 66% of consumers would spend more on a product if it came from a sustainable brand, and 81% of global consumers feel strongly that companies should work to help improve the environment.