Bain & Co: How Can CEOs Improve Sustainability Focus?

“Building a sustainable business remains a strategic imperative,” says Jean-Charles van den Branden, Leader of Bain and Company’s Global Sustainability practice. 

He is one of the authors of Bain’s report The Visionary CEO’s Guide to Sustainability 2024 that aims to equip CEOs with research, intelligence and insights to achieve long, mid and short term sustainability success.

The driving highlights from the report? 

• 36% of B2B customers would change suppliers today if their sustainability needs aren't met
• 60% of consumers say their climate change concerns have increased over the past two years

“Customers, consumers, and regulators are demanding sustainability,” Jean-Charles emphasises. 

“Risk and competition will compel it. Transitions in energy, food, and other sectors are well underway.

“Sooner than expected, a mix of new technologies, consumer and customer behaviour, and smart policy will create valuable opportunities for the most forward-thinking companies across industries.”

What can CEOs learn from sustainability trends?

Bain believes in learning from the past and applying that learning to the future. The report’s first message? In 2023, sustainability technology leapt far beyond expectations, and in 2024 it has continued. 

It is undeniable that AI has been at the topic of the year so far, but the report highlights the opportunity for sustainability that comes along with this.

Despite Bain’s research that CEOs have lost focus on sustainability in the past year, the same can not be said for consumers. Bain reports that 60% of consumers’ concerns around climate change have increased in the past two years, with packaging and recyclability key concerns. 

CEO-driven decarbonisation

Many companies are struggling to meet lofty decarbonisation targets – according to Bain, 36% of companies are behind on their Scope 1 and 2 targets, and 51% are behind on Scope 3 targets. 

The report says: “Decarbonisation leaders consistently do two things right:

• “First, they are visionary pragmatists, having built a clear and realistic business case for how they will decarbonize.
• “Second, they collaborate internally and also externally, with others in their value chain and with third parties like regulators.

“Many other efforts follow from these, but absent these two priorities, decarbonization ambitions seem to stall.”

Collaboration is a theme that comes up frequently throughout the report. Bain suggests building relationships internally and with partner companies, but also customers, suppliers, policy makers and standard setters.

Olam Food Ingredients

Global food and ingredients company Olam Food Ingredients (OFI) is embedding sustainability into its business in a way that weaves into financial results and ensures comprehensive impact. 

Executive Director and Group Chief Financial Officer Rishi Kalra believes that finance and sustainability need to work hand in hand. 

“Traditionally, sustainability was never part of the CFO’s role; it was always in the CEO’s domain,” Rishi explains in the report. 

“The challenge was that sustainability wasn’t speaking the language of business leaders. It was becoming very theoretical, and the only language that business leaders understood was dollars and cents, and in a form that they’d always seen: profit and loss statements and balance sheets.

“Today, sustainability is at the heart of the role of a CFO from a governance, commercial, and regulatory standpoint. Regulators expect it. Investors are seeking it.”

******

Make sure you check out the latest edition of Sustainability Magazine and also sign up to our global conference series - Sustainability LIVE 2024

******

Sustainability Magazine is a BizClik brand

******