UK firms lagging behind on sustainability

UK firms are largely failing to put in place the sustainability strategies and management structures increasingly demanded by customers, and as a result are beginning to lag behind their international rivals in their approach to the environment.

That is the finding of a global survey of 1,100 senior business executives by the Economist Intelligence Unit, which found that UK firms are missing out on many of the commercial benefits associated with sustainability initiatives.

The study, entitled Action or Aspiration? Sustainability in the British Workplace, surveyed almost 200 UK execs and found that just over a quarter had been given sustainability goals, compared with a global average of 37 per cent. Meanwhile, just nine per cent of UK execs' remuneration is dependent on meeting sustainability targets – exactly half that of the global average.

The report also argued that while many UK firms are now running sustainability initiatives, they are widely regarded as marketing exercises with execs failing to harness them as a commercial force capable of cutting costs and enhancing competitiveness.

Nearly a third of UK respondents said their company only makes sustainability efforts in markets where it is perceived to have an impact on customers' perceptions, while 25 per cent admitted their company was at least partially guilty of "greenwash" with much of their sustainability initiatives centred on communication, rather than actual change.

James Watson, senior editor at the Economist Intelligence Unit, said there was a gap "between what companies claim they are achieving in terms of managing their social and environmental impacts and the extent to which their executives feel involved in these activities".

He urged firms to do more to develop management structures that directly engage staff with sustainability initiatives.

His comments were echoed by Tim Smart, chief executive of BT Global Services UK which sponsored the research, who warned that UK firms could lose out to multinational competitors if they failed to properly execute on environmental strategies.

"British-based businesses need to start exploring some of the tactics of global organisations, who are arguably setting the pace in this area," he added.