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But what actually do we mean when we talk about sustainability? For me, it’s best thought of in three interlinking areas: societal, technological and environmental. The societal aspect includes the rise of the middle class around the world, the shift towards the East, the emergence of new, rapidly developing markets and the resulting opportunities and pressures this creates. The technological aspect takes in the increasing inter-connectivity of everything through the internet and mobile devices, a growth in knowledge, rising societal expectations and aspirations, and the availability of increasingly rich data.
FOCUS 27
THE AVERAGE TENURE OF A CHIEF
EXECUTIVE HAS FALLEN DRAMATICALLY IN RECENT YEARS. THE DANGER IS THAT THIS LEADS TO SHORT-TERM THINKING BY THE CEO AND LEADERSHIP
While the environmental area includes changing weather patterns that create challenges with resource availability (as everything we use in society is either grown or mined) and affect companies’ supply chains, the need to fi nd more sustainable energy forms, and the growing imperative to recycle resources.
More and more, these areas overlap with each other, which is why companies need to step back and take a holistic view.
So, for example, changing societal expectations can lead to protests over environmental issues like palm oil or moral issues such as the use
Vincent Neate discusses KPMG’s Sustainability War Room
of cheap labour – which technology turns into fast-moving and quickly spreading campaigns on social media.
Consumer goods companies such as household brands, need perhaps more than any other kind of company be alive to their customers’ concerns, and be proactive in anticipating them.
Sustainability is about taking a long-term view rather than a short-term one. At KPMG, we have developed a ‘sustainability room’ in which we walk clients round to provoke discussion and debate on the subject, and to give business leaders a space to refl ect on how they view the world through a ‘sustainability lens’. One of the charts in the room that often grabs the most attention shows how the average tenure of a chief executive has fallen dramatically in recent years. The danger is that this leads to short-term thinking by the CEO and leadership – resulting in a focus on short-term fi nancial results and share price at the expense of longer-term investment in people, training, R&D, health and safety and so on.
© 2014 KPMG LLP, a UK limited liability partnership, is a subsidiary of KPMG Europe LLP and a member fi rm of the KPMG network of independent member fi rms affi liated with KPMG International Cooperative, a Swiss entity. All rights reserved.
SUSTAINABILITY
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