Sustainable Business Strategy for a Positive Social and Environmental Impact

Define your ambitions, set and meet clear goals, and unleash the power of technology.

Sustainability programs drive value

Eighty-seven percent of executive leaders expect their investment in sustainability initiatives to increase over the next two years.

Business leaders at organizations with sustainability programs in place report a range of benefits. They say sustainability strategies help to protect the enterprise from disruptive impacts and mitigate cost increases — and investing in partnerships and innovation that drive sustainability is an enabler of enterprise growth. 

The 2022 Gartner Sustainability Opportunities, Risks and Technologies Survey shows:

  • 86% of business leaders see sustainability as an investment that protects their organization from disruption

  • Four out of five leaders see sustainability as helping their organization to optimize and reduce costs

  • 83% say their sustainability program activities directly created both short- and long-term value for their organization

Gartner clients: Visit gartner.com for additional insights and tools or to schedule time with an expert.
Sustainability Is a Growing Focus for Execs. Here’s What That Means for You.

A sustainable business seeks to create long-term stakeholder value by factoring social, economic and/or environmental impacts into strategic and operational decisions.

A sustainable business seeks to create long-term stakeholder value by factoring social, economic and/or environmental impacts into strategic and operational decisions.

Climate tops material sustainability issues

Climate is at the top of issues considered material to environmental, social and governance (ESG) sustainability, according to Gartner analysis of 100 organizational materiality assessments. Climate is followed by business ethics and integrity, diversity, equity and inclusion and sustainable products.

Environmental sustainability is rising on CEO agendas, and 9% of CEOs put it among their top 3 business priorities.
74% of supply chain leaders expect circular economy (sustainability) activities to positively impact profitability between now and 2025.
Nearly 70% of surveyed CEOs plan to invest in new sustainable products and in making existing products more sustainable.
The circular economy has had a positive impact on prior-year revenue for 67% of supply chain leaders surveyed.
44% of supply chain leaders expect climate change to create challenges related to security of supply in the next 10 years.

Sources:

  • 2022 Gartner CEO and Senior Business Executive Survey
  • 2022 Gartner Emerging Priorities in Supply Chain Survey 
  • 2022 Gartner Circular Economy Survey
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Sustainable business — complimentary webinars

Webinar

Strategy to Action: Create New Value With a Digital Sustainability Platform
Webinar

Turn Supply Chain Sustainability Into a Reality
Webinar

Supply Chain Sustainability: Progress from Strategy to Action
Webinar

How To Turn Strategy Into Action After COP26
Webinar

Your Roadmap to Navigate Corporate Sustainability Risk
Webinar

5 Steps CIOs Can Take to Sustainable IT
Webinar

Create New Value With a Digital Sustainability Platform
Webinar

What CIOs Need to Contribute on ESG and Sustainability
Webinar

How to Build an Effective ESG Program

At the core of sustainable business strategy lie decisions about growth opportunities, risks and costs, technology and leadership.

When it comes to their strategic ambitions and the level of engagement for their enterprises, executives have many viable sustainable business options. They range from doing the minimum through compliance to pursuing new growth opportunities and differentiating through sustainability. But this is a fast-moving area. Regardless of the approach you choose, it’s imperative to sense and respond to stakeholders’ expectations, regulatory interventions and market shifts. Access to capital, talent, growth and the enterprise license to operate are all at stake.
  • Growth opportunities
  • Risks and costs
  • Technology and innovation
  • Leadership

Growth opportunities

Detect sustainable business inflection points and disruptions, support new investment opportunities and develop new business and operating models.

Product innovations that deliver sustainable benefits to stakeholders present an opportunity to create long-term financial security while managing natural capital flows.

Digital can help drive significant improvements in enterprise sustainability performance and create new growth opportunities, but digital business can also hurt sustainability. A coherent strategic plan is vital to successfully tie together digital business and sustainability.

Key questions

  • How can we support new sustainable investment opportunities?
  • How do business and operating models need to change to drive sustainability outcomes?
  • What sustainability inflection points will drive opportunities for growth?

Risks and costs

Assess, monitor and manage the internal and external risks associated with sustainable business.

Sustainable business investment is driven by opportunity, but it is also part of managing risks and costs. Increasing regulations and activist investors create pressure to focus on the financial, legal and reputational risks associated with sustainable business strategies.

Key questions

  • How can we manage sustainability costs and risks?
  • How do we ensure access to capital?
  • Which sustainability-risk-based monitoring strategies and responses should we adopt?

Technology and innovation

Monitor, prioritize, apply new technologies and improve on existing technologies to enable sustainable business in enterprise outcomes.

Meeting sustainable business goals and commitments requires innovation, information and digital technology, such as artificial intelligence (AI), blockchain and the Internet of Things (IoT), as well as sustainability technology itself. (See FAQ for more on sustainability technology.)

Key questions

  • What sustainability technology trends should be on our radar?
  • How can we make IT more sustainable?
  • How can we apply and prioritize technology to improve enterprise sustainability?

Leadership

Identify the role of executive leaders across the enterprise in strategic planning, culture, talent and business capabilities.

Business sustainability strategy cannot advance without purpose-driven, authentic leadership and governance. It relies on expertise from across the organization, from the shop floor to the executive — and that requires new leadership approaches, talent, skills and competencies.

Key questions

  • What is our role in sustainability?
  • How can we incorporate sustainability into strategic planning?
  • How can we build and support sustainability leadership, culture, capabilities and talent?
  • How do we engage with stakeholders on sustainability?

Answer key sustainable business questions with actionable insights from Gartner

A sustainable business seeks to create long-term stakeholder value by factoring social, economic and/or environmental impacts into strategic and operational decisions. 

 

The degree of strategic ambition for sustainable business ranges from doing the minimum through compliance all the way to pursuing new growth opportunities and differentiating through sustainability. 

 

Those sustainable businesses expecting to transform and differentiate will need to identify new market opportunities, inflection points and disruptions, and incorporate their plans and response into strategy.

ESG (environmental, social and governance) is often used interchangeably with sustainability. But ESG is a measure of performance, while sustainability is an outcome. 

 

ESG measures are used to assess the robustness of a company’s governance mechanisms, and its ability to effectively manage its environmental and social impacts. Incorporating systematic ESG performance data alongside financial analysis gives better insight into the overall and long-term performance of the organization.

 

The objective of sustainability is to create long-term stakeholder value by factoring social, economic and/or environmental impacts into strategic and operational decisions. ESG provides metrics to gauge what is being done about sustainability.

CSR refers to corporate policies and programs that an organization implements to benefit its community — the objective being to improve the organization’s reputation or positively impact the retention and loyalty of employees and consumers.

 

While organizations can use CSR initiatives to achieve ESG targets, CSR initiatives are typically driven by a team or function that operates independently or from within the HR or corporate affairs functions. Sustainable businesses take a more strategic and integrated approach to taking account of social, economic and/or environmental impacts into value creation strategies.

Sustainability technology includes:

  • Environmental technology, such as renewable energy and direct air capture

  • Social technology, such as human capital management (HCM) and vendor management for responsible sourcing

  • Reporting and process technologies, such as carbon accounting, that enable ESG reporting

Digital business can be used to go beyond sustainability compliance by helping enterprises reach targets and enabling new business models and revenue streams.

 

Digital business and sustainable business outcomes can feed each other. For example, IoT, and data and analytics can optimize wind turbines, reducing costs (a digital business outcome) and greenhouse gas (GHG) emissions (a sustainability outcome). A mobile app can help customers measure and reduce their GHGs. This improves customer engagement (a digital business outcome) and supports sustainability targets like achieving net-zero emissions. A circular economy platform creates new revenue, a business outcome for both digital business and sustainability.