Bain: Executives haven’t embedded sustainability effectively

Surveyed by Bain & Company, many executives believe their efforts to embed sustainability are ineffective. François Faelli and Torsten Lichtenau explained

It’s true, 75% of executives surveyed by Bain & Company say that sustainability has not been implemented effectively across their organisations. This isn’t to signify the end of the road for businesses, but generate an urgent response as time only passess and the deadline for climate change nears each day. 

A report released by Bain & Company, authored by François Faelli, Global Sustainability Practice Leader for Brussels, and Torsten Lichtenau, a Senior Partner at Bain focused on Carbon and Climate, details some key research into the business approach. As the results are released, the company wants to share ways in which organisations can claw back their efforts and make sustainability a key component of commerce. 

More highlights from the data include: 

  • Around 11% of US consumers are willing to pay for sustainable products 
  • Companies charge an average 28% extra for sustainable goods 
  • By 2030, company executives expect 30% (2021 baseline) growth in revenue by adhering to a circular economy

Policy’s impact on the decarbonisation of transport 

There’s no doubt that policy could accelerate the impacts of climate strategies, and the lack of regulation demanding action means that cost is still a major factor in supply chain decisions. When it comes to electrifying trucks, despite organisations’ best efforts to decarbonise, the total cost of owning a diesel truck is US$300,000 less than an electric alternative, making the switch unfeasible from a cost standpoint, not to mention concerns of powering and managing an electric fleet. 

With great policies in place, California has proven the impacts to be had by regulating transportation vehicles and actively promoting electrification. As a result, by 2025, California expects the total ownership cost to flip; an electric truck to cost US$230k to US$300k less than a diesel version. 

Businesses are slow to decarbonise their supply chains 

There remains a large percentage of businesses that are not meeting decarbonisation targets. According to Bain’s research, around 24% of supply chains are not on track to meet Scope 1 and 2 emissions targets while 35% are going to miss their Scope 3. 

This comes down to poor integration in operations, however, Bain believes there is still time to manage this while also reducing costs and building resilience. This is all down to strategy. As 60% of companies lack a feasible strategy for Scope 3 reduction, the research shows a significant shift in progress with a clear approach to their targets. 

Is it business or is it policy? 

Companies need motivation, despite their best intentions to advocate for a more sustainable world. While major progress has been made to reduce fossil fuel emissions from some of the major industries, governments hold the power to influence businesses to make changes. 

For the businesses that struggle to shift their efforts, policy can be a motivator but strategy an enabler. Bain & Company’s report delves into more detail about the circular economy, generating strategies to harness the benefits of climate action, and respond to the key policy change. TheVisionary CEO’s Guide to Sustainabilityencompasses all of this, which is then broken down into some of the key steps that businesses can take.

François Faelli, Global Sustainability Practice Leader for Brussels

Bio: François Faelli

Based in Brussels, Belgium, François Faelli is a partner at Bain & Company and leaders its global sustainability practice. With over two decades as a consultant in this space, his experience also spans mergers and acquisitions, performance improvement, and corporate strategy. Faelli also released publications on the evolving consumer retail landscape.

Torsten Lichtenau, a Senior Partner at Bain & Company focused on Carbon and Climate

Bio: Torsten Lichtenau

Based in London, UK, Torsten Lichtenau is a senior partner at the company, leading global carbon transition practices. Nearing 20 years of consulting experience, Lichtenau helps clients across industries to decarbonise their businesses strategically. 

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Other magazines that may be of interest - EV Magazine | Energy Digital

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Sign up to the The Global Sustainability & ESG Awards 2024, coming to London on the 11th September 2024. 

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