Friday, November 26th, 2021
Laws enforce sustainability
The economy reacts to pressure on climate protection
By Diana Dittmer
The conversion to a climate-neutral economy and society is an enormous feat. How are companies positioned in this country? A study calls brake pads for resource protection, but also shows why the change has recently picked up significantly.
For a long time, sustainability was considered unsexy and boring, more a topic for future generations than for today. That has changed. Sustainability has now become a megatrend, as the World Climate Conference recently shown in Glasgow. Climate and resource protection has arrived in people’s minds, and with it the conviction has grown that ecological action and the conscious use of resources on our planet can no longer be postponed.
A study by the Bertelsmann Foundation in collaboration with the Peer School for Sustainable Development and the Chair for Sustainable Business at the University of Mannheim examined how well companies are now positioned in this area. The result is: three-quarters of the 51 sustainability officers from large companies questioned affirmed that the topic had become “much more important”. In more than half of them, the relevant decisions are therefore also “at the top”, with the board of directors or with the management.
Although sustainability has also gained in importance in terms of content, as the survey shows, it becomes clear that there is still a lot to do at the same time. Only one of the respondents stated that the topic was “fully anchored in all areas”. Even just under half consider the financial resources for their own area to be sufficient. The authors expressly emphasize as positive that the corona pandemic did not affect the sustainability budget of the majority of companies as expected (56.9 percent). Only 11.8 percent of the sustainability officers surveyed stated that the budget had become smaller as a result of the pandemic.
The answers to the question about the drivers of the transformation are also interesting. Because according to the survey, it is above all external pressure that has its effect here. The answer of 47 percent of those questioned is that customers exert a “very significant” influence on company decisions. In second place is the management level as the decision maker (43 percent) and in third place is political regulation (35 percent). Experts speak of a “trickle-down effect” here. “If some large companies are subject to certain transparency obligations, these standards are also passed on within the value chain,” explains Jakob Kunzlmann, economic expert at the Bertelsmann Foundation.
Some examples that are cited as accelerators are new legal regulations such as the EU Sustainable Finance Action Plan (SFAP) with the EU taxonomy – here capital flows are to be directed into ecologically sustainable activities – that have been expanded sustainability-related reporting obligations as well as the supply chain law. According to the study, all regulations also created great uncertainty in companies. Those in charge in the company feared above all the associated costs and the additional bureaucracy. The consequences of the implementation of the Supply Chain Act from January 1, 2023 onwards are difficult to assess for companies.
High costs and a lot of effort with “running engine”
According to the authors, the fact that the transformation towards more sustainability is still only proceeding with the handbrake on is due to the high costs of sustainability measures, a lack of resources and still insufficient demand. Overall, the economy is still “at the beginning of the runway for a sustainable transformation. We are only just really warming up,” comments Alexander Kraemer, co-founder and board member of the Peer School.
With regard to their specific work, the majority of respondents cite the avoidance of emissions and the decarbonisation of company processes in the coming years as “essential” or “very important” priorities. According to the study authors, there is also a brake block on the way to more sustainability. Because the conversion takes place “with the engine running”, put it Laura Marie Edinger-Schons, Professor of Sustainable Management at the University of Mannheim. There is “so much new regulation and methods as never before for the next few years”, which requires completely new management skills and processes, “especially in companies that recognized the relevance of the topic late”.
Overall, we are “in a time of substantial reorientation of our economy”, is the conclusion of the study. And the prognosis: “In the future there will probably be significantly more transparency about sustainability aspects and this will have an impact on the competitiveness of companies.” The “Sustainability Management Monitor” survey is to be repeated annually in the future.