Does your C-Suite really care about sustainability, or do they just say they do?

“Give me chastity and continence … but not yet.” The 5th century words of St Augustine may have an unnerving familiarity for business leaders in the 21st century, particularly when it comes to sustainability commitments.

“We need to talk about sustainability… but not too much,” can be an all-too-common refrain from many of the CEOs I speak to. There is, of course, widespread recognition of the need for change, and for businesses to become more sustainable. But clouds of doubt persist. Doubt about the right way forward, doubt about the danger of making fundamental changes to their business models in such a tumultuous time.

We have to be clear, however, about the risks of inaction. The movement to net zero is born of human and environmental concerns. But it also has a strong business imperative. And it is not something we can simply pay lip service to. We cannot fall into the trap of talking the talk but failing to walk the walk.

For me, this is a generational opportunity for companies. I remain hugely optimistic and excited about what the future holds and the chance to rethink how things are done, and how products are made, sold, used, and reused.

Why do I think this? Well let’s look at where we are, where we need to go, and how we can get there.

The CEO struggle with sustainability

Let’s start with the challenge – for many in the C-suite, sustainable innovation still isn’t a priority. We partnered with FT Focus to survey more than 300 business leaders worldwide. What we found was that while sustainability was a growing concern for their company, just 30% of respondents described it as a significant priority. ?

One big hurdle I have noticed is that a company’s enthusiasm for sustainable development is often constrained within silos, predominantly to the department in charge of sustainability or corporate social responsibility.

Leaders are not pushing back against sustainability. But they may not be fully embracing it. Much of this is connected to competitive pressure and the perceived cost of substantive change. It has been a recurring theme in recent conversations, ‘yes, we agree about the need to focus on sustainability, until it costs a certain amount’. The current energy crisis is a prime example of one of these situations.

But does that risk short term gain for long term pain? If we go back to basics, the C-Suite should care about three things: their customers, their investors, and their employees. And with all three groups we are seeing a significant shift in their views around the importance of sustainability in their decision-making:

·??????84% of consumers say sustainability is important when making purchase decisions

·??????75% of investors believe companies should address ESG issues, even if doing so reduces short-term profitability

·??????71% employees say working for sustainable companies is a top priority

The business benefits of making the leap

The great news is that increasingly, businesses are listening to their stakeholders and committing to change. According to the survey, while fewer than a quarter of leaders have put a greater focus on producing their existing goods and services in a more sustainable way, over half are now in the process of doing so.

Today, more than 4,000 businesses (including Dassault Systèmes) are working with the Science Based Targets initiative (SBTi) to reduce their emissions in line with climate science. Doing so holds them to account, pushing themselves to state achievements in their Annual Reports, and reassess their operations to reduce their Scope 3 emissions across the value chain.

The companies that have made this leap are already reaping the rewards. According to research from Accenture , companies with a stronger sustainability DNA achieve on average a 21% increase in their EBITDA margin . There is a huge ROI in developing a sustainability approach, no matter the business. And that's really the way you should look at it – a beneficial strategic investment.

Dare to change

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So where to start? Well, a crucial first step is making sure your growth and sustainability agendas are linked. The sustainability advantage is real, but it also needs to be measurable. You cannot systematically change what you can’t measure. This is why effectively utilizing data is so important, because it gives you the ability to not only monitor the impact of your existing operations but to make better informed decisions in the future.

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Moreover, by feeding all that data into a virtual twin (a virtual representation of a real-world entity or system), you can endlessly innovate and experiment, safe in the knowledge that you can make thousands of mistakes with no risk before you make a real world decision. I call it sustainability by design, driven by data.

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In fact, this is one of the things I am most excited about at Dassault Systèmes – showcasing the power and endless potential of virtual twins to as many industries as possible. I believe it should be the norm that businesses can test new ideas, new products, and even new business models in the virtual world, before confidently bringing them into the real one.

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But daring to change requires one fundamental element – people. The transition to net zero is a challenge for all generations, not just future ones, and it is your employees who will drive it. Therefore, there is a huge opportunity to educate and upskill your existing teams, as well as attract new talent. That’s why we are developing our own learning experience to help teach our customers to make the most of our software and leverage technology to make change easier.

I have a wonderful family and amazing goddaughter. Her name is Muse and I love her tremendously. Over the next fifty years, she’s going to be living through one of the biggest transformations the modern world has ever seen. I want to believe it will be a hugely positive one, but we have to make it start today.?