Businesses are under mounting pressure to deliver on sustainability, but rather than seeing it as a burden, many now view it as a core driver of long-term success, according to new research from EY.

The professional service firm’s latest report, The Future of Sustainability in Business: Why Success Depends on Integration, found that 91% of firms are being pressured on sustainability issues from their investors, and nearly 80% are being squeezed by activists.

With the same message coming from multiple angles, EY found businesses ignoring it face injuring their reputation.  

More than a third (39%) of the 200 UK and European businesses EY polled revealed they have already suffered a damaging backlash in the media or on social media for falling short on sustainability efforts, compared to just 6% who have integrated sustainability into their wider business strategy.

Despite the consequences, too many businesses are still treating sustainability as a separate endeavour, with more than half (54%) saying that there was no integration whatsoever between their business and sustainability strategies.

Only 41% of firms reported any meaningful integration between the two, while just 5% of firms said they treat sustainability and business strategy as one and the same.

Part of the problem is that sustainability is still a lower priority than commercial objectives. The study found that 39% of firms don’t count sustainability as a primary concern, with the majority of companies (57%) admitting that if they need to make cuts, sustainability plans are more likely to be eliminated than business initiatives.

Conversely, just 2% of businesses that embed sustainability into their core strategy view sustainability as a lower priority than commercial goals, and only 4% said they would scale back sustainability efforts before commercial initiatives in tougher times.

According to the study, this isn’t just good for the planet, it makes business sense, too.

Although only 27% of surveyed businesses had deeply embedded sustainability strategies, these firms were 40% more positive in their business outlook for the next twelve months. They were also much more optimistic about delivering profitable growth, at 94% compared to 71% of their sustainability siloed peers.

That’s not all. Businesses prioritising sustainability were found to be more confident in delivering societal value (69%), building brand perception and customer engagement (87%), as well as attracting and retaining talent (92%). 

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Almost all of these companies (90%) agreed their sustainability strategies are supported by adequate financing from the business – compared to only 26% of the rest – with these firms more effective at approving both capital (94% vs. 28%) and operational expenditure (87% vs.28%).

“Companies must act now to embed sustainability or risk being left behind,” said Andrew Hobbs, EY EMEIA public policy leader.

“Embracing sustainability means understanding its tangible commercial benefits while also putting serious investment plans in place. Those who take the boldest steps will not only boost resilience but also gain the confidence to succeed.”

Evidence suggests that those making investment decisions are already recognising the potential benefits. Earlier this year, research from management consultancy Kearney found that found that 92% of CFOs report an increasing appetite for sustainability investments, with more than half saying they will significantly increase sustainability spending.

Likewise, a recent KPMG study found that that sustainability is as important as compliance, with businesses focusing on improving ESG standards through the use of sustainable materials (60%), supply chain management (56%), and energy usage (53%).

According to KPMG, by building a strong sustainability profile, these organisations hope to attract and retain staff who care about these issues, a top priority for almost one in 5 firms.

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