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Whither sustainability? CEOs rank it low on 2013 priorities

January 10, 2013

sustainabilitySustainability ranks ninth out of ten top corporate priorities for 2013, according to a study released by The Conference Board January 9th of more than 700 senior executives in businesses around the world.

Sustainability’s global ranking was ninth, ahead only of trust in business as a priority. In the United States, sustainability came in dead last – tenth out of ten.

Sustainability ranked ninth in Asia (although it is the third biggest challenge to Chinese execs) and eighth in Europe.

The survey of top global execs also gave low status to corporate brand and reputation, which ranked eighth across all regions including the U.S., and ninth in Europe.

The survey indicates that “soft” business issues such as sustainability and corporate social responsibility (affecting brand and reputation and trust in business) are not perceived by top managers as adding value to the business, despite the plethora of conferences, management articles and annual report statements that make these “low priority” issues seem like more important contributors to business strategies than they apparently are to business decision-makers.

The top priorities facing execs in 2013 according to the survey: human capital (cultivating employees across the organization, not just in the senior ranks), operational excellence (internal improvements to stabilize and strengthen companies coming out of the recession), innovation and customer relations.

The results of this year’s survey are quite illuminating,” said Bart van Ark, Executive Vice President and Chief Economist, The Conference Board, and a co-author of the report. “Since 2008, we had seen CEOs express extreme concern about external pressures on the business environment, especially in those regions hardest hit by the economic crisis. Last year, we saw ‘global political/economic risk’ and ‘government regulation’ both ranked as top-four challenges worldwide. In CEO Challenge 2013, leaders seem to be turning away from macro factors outside their control to look hard at their own organizations, employees, customers, level of efficiency, and capacity for innovation.”

The survey finds that among the many strategies that CEOs mention to tackle their main challenges, the focus on using the firm’s human capital is predominant. The people focus is also clearly much broader than just developing an organization’s leaders.   

“On a global basis as well as across regions, this year also saw a shift toward internal talent development as opposed to strategies focused on management or the senior team,” said Rebecca Ray, Senior Vice President, Human Capital at The Conference Board, and a co-author of the report. “In a time of uncertainty, this appears to be a long-term approach that will assure the right talent is in place to take advantage of the next boom, whenever it comes.  As CEO Challenge 2013 shows, human capital is not only a critical business function in itself, but is also intimately connected with innovation, operational excellence, and other challenges.”