What Makes Companies Embrace Sustainability?

Our fourth annual survey of executives and managers, conducted with MIT Sloan Management Review, found that nearly 50 percent of companies have changed their business model as a result of sustainability issues—a 20 percent jump over last year. What’s driving companies to transform not just their products or packaging but also their value chains, cost models, and organizations?

Customer preferences are by far the most common driver of sustainability-related changes to the business model, but there are some regional differences. In the Middle East, for example, the most common catalyst is peer pressure—companies feel compelled to act because of their competitors’ commitment to “going green.” In Latin America, political and legislative pressures play as great a role as customer preferences in driving change.

Across industries as well, customer preferences are the most common catalyst—again, with some exceptions. Peer pressure plays a bigger role in the health care and energy and utilities sectors, and stricter requirements from partners are the most prevalent driver of change among commodities companies. In the media and entertainment industry, customer preferences matter as much as two other catalysts: resource scarcity and competition for new talent.