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87% of Companies to Increase Sustainability Investment Over Next Two Years

87% of Companies to Increase Sustainability Investment Over Next Two Years

Nov. 22, 2022
Investors, regulators and customers are pressuring companies to become more sustainable.

Sustainability continues to be front and center at many companies. A new Gartner, Inc. survey revealed that 87% of business leaders expect to increase their organization’s investment in sustainability over the next two years.

And where are companies feeling the pressure for this investment? Customers are the primary stakeholder group creating pressure for organizations to invest or act on sustainability issues, selected by 80% of executives, followed by investors (60%) and regulators (55%).

“Sustainability enables businesses to cope with disruption,” said Kristin Moyer, distinguished VP analyst, Gartner, in a statement. “Economic uncertainty, geopolitical conflict and escalating materials and energy costs are forcing businesses to reexamine all expenditure forms. This focus on essentialism, in combination with increasing stakeholder desire to see progress on environmental, social and governance (ESG) goals, creates new opportunities for enterprises to grow while mitigating cost and risk.”

Sustainability Protects Organizations from Disruption

The survey found that 86% of business leaders see sustainability as an investment that protects their organization from disruption. Additionally, 83% said sustainability program activities directly created both short- and long-term value for their organization, and 80% indicated that sustainability helped their organization optimize and reduce costs.

Specifically, the top areas where survey respondents said sustainability programs are mitigating cost increases are energy consumption, business travel, and customer transactions (see Figure 1)

“Executive leaders are achieving both operational and supply chain savings through their sustainability programs,” said Moyer. “This kind of 'two for one' where sustainability investment supports a business goal like cost optimization, significantly enhances the program’s impact by creating a virtuous cycle.”

Sustainability Drives Growth and Innovation

Sustainability can also enable new value creation and business growth opportunities. Fifty-seven percent of business leaders said the enterprise sustainability program has a strong connection to the results on the income statement, and 42% of respondents are leveraging their sustainability activities to drive innovation, differentiation and enterprise growth through sustainable products.

“Investing in sustainability can support product differentiation but be wary of greenwashing risks – there are no shortcuts to sustainable growth,” said Moyer. “Focus on product attributes that are important to customers and how these priorities shape buying decisions. When viewed through a strategic lens, sustainability can provide a ray of sunshine for businesses during difficult market conditions.”

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