Sustainability efforts stymied by rising costs – survey

Almost three quarters (73%) of UK business leaders say sustainability goals have been hit by rising business costs. A combination of rising energy prices, ongoing costs associated with the Covid-19 pandemic and international trade barriers are threatening the ability of UK businesses to meet sustainability goals, according to a survey of over 500 UK business leaders by The Chartered Institute of Procurement & Supply.

Three-quarters (73%) of UK business leaders admit their organisations have been forced to make compromises on the delivery of sustainability goals while managing business costs; concessions that have come despite the overwhelming majority of business leaders (93%) saying that sustainability targets are essential for their personal objectives.

Higher energy prices, and other rising business costs were cited by respondents (61%) as the main reason for organisations having to comprise sustainability goals. Costs associated with the impacts of Covid were close behind, with 42% of respondents identifying it as a drag on sustainability efforts, despite the day-to-day impact of Covid receding.

Costs connected to international trade barriers such as Brexit and US/China relations came next (40%), followed by the cost of sustainability compliance, which was identified by 39% of executives.

Despite compromises, the commitment of UK companies to sustainability is extremely high, with 97% of respondents saying their organisation has a clear policy on sustainability, and confidence in those strategies remains high with more than three quarters (77%) believing their strategy has achieved its stated goal.

David Taylor, COO at CIPS, said: “It is really encouraging to see so many business leaders personally committed to, and confident in, their sustainability strategy. But it’s perhaps not surprising that so many say they’ve been forced to compromise when faced with managing increasing costs. The unprecedented disruption in recent years has led many businesses to focus on just keeping the lights on. But sustainability should not be viewed as a cost. It is an investment in all of our futures by both organisations and their suppliers – and one which, over time, should actually reduce costs.

“No organisation can meet its sustainability goals alone. There must be shared responsibility across supply chains to ensure that action is being taken – and there is the level of transparency and visibility required to drive meaningful change. Procurement and supply professionals will be at the heart of this balancing act – and these teams must be provided with the knowledge and support to navigate the tricky waters ahead.”

The importance of suppliers and supply chains in achieving sustainability goals appears well understood, with 91% of UK business leaders say that procurement and supply teams play a significant role in sustainability strategies. However, there remain questions about how best to encourage suppliers to support sustainability strategies.

Just 12% of business leaders say they incentivise their suppliers to achieve sustainability goals. That is despite 85% of respondents believing that without supplier commitment their organisations will fail to meet their sustainability targets.

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