Firms want sustainability but lack proof

November 29, 2022 04:28 PM AEDT | By AAPNEWS

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Businesses say they are getting a financial boost from going sustainable but are yet to truly connect profit and purpose.

The global Environmental Sustainability Study of more than 6500 business leaders, including more than 200 from Australia, has examined motivations and barriers that organisations face to change their ways.

Customer demand (39 per cent), revenue and growth opportunities (36 per cent) and governmental regulation (36 per cent) are the top motivating factors for Australian businesses to take environmental action.

But more than four-fifths of respondents say they are finding it hard to measure what they do, according to the study released on Tuesday by global software firm SAP.

Almost two-fifths of Australian businesses say the difficulty in proving a return on investment is holding them back, while 34 per cent blame a lack of environmental strategy.

More than eight in 10 (86 per cent) see a positive connection between taking environmental action and profitability, compared to 14 per cent seeing either a negative or no relationship between the two.

Over half of Australian businesses say addressing environmental issues will be material to business results within the next five years.

A similar share say their stakeholders would be moderately or highly tolerant of reduced profits in pursuit of sustainability goals.

Three in 10 Australian businesses rely solely upon assumptions and estimates to screen the environmental impact of their supply chain.

"If Australia is going to move towards a more sustainable future, organisations across the country need to embrace sustainability as part of what they do every day," SAP executive Damien Bueno said.

These strategies needed to be embedded into their operating models and trusted information was needed from suppliers and contractors, he said.

But three-quarters of businesses say they can't be sure of the sustainability of their external supply chain.

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