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McKinsey Global Survey - The Business of Sustainability

More companies are using sustainability to improve processes, pursue growth, and add value to their companies than focusing solely on reputation according to a study recently released by McKinsey & Company. Based on a July 2011 online survey of over 3200 executives from a wide range of regions, industries, company sizes and functional specialties, the study found that, compared to a similar study last year, larger shares of executives say sustainability programs make a positive contribution to their companies’ short- and long-term value. And more executives say their company’s top reasons for addressing sustainability include improving operational efficiency and lowering costs. The share that said this jumped 14 percentage points since last year, to 33 percent, edging out corporate reputation, selected by 32 percent of respondents.

The study identifies three different levers that companies can use to create value--growth, return on capital, and risk management—and finds that sustainability has a role to play in all three. According to McKinsey’s framework, a growth strategy may involve innovation and new products or reaching new customers and markets; a strategy of improving returns on capital might feature increasing the environmental performance of operations; a risk management strategy could entail regulatory or reputational management. The study found that some value strategies are more common than others.

The original document can be downloaded from McKinsey here.

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