Responsible Investment

Assessment of companies’ strategies toward “Zero Impact Growth”

September 25, 2012
Image ‘Feather 1’ by Jim Champion (CC BY-SA 2.0)

Zero Impact Growth doesn’t propose "zero economic growth" as the solution; it promotes a strategy framework for different industries to help speed up the transition towards business models that can restore a balance with planetary limits and human well-being. Deloitte’s research was inspired by sustainability visionary John Elkington’s “Pathway to Zero” as described in his book The Zeronauts – Breaking the Sustainability Barrier. Deloitte has developed a scoring system which shows where companies stand along Elkington’s pathway to zero, taking into account that different attitudes, mindsets and organizational cultures lead to different strategies, targets and ways of implementation. The five stages range from recognizing the opportunity of a zero-impact growth strategy to fully embracing one.

Six pioneering companies

Of the 65 assessed companies, only 6 companies have reached a level on which they “are ready to take radical steps” to transform their industries according to Deloitte. The companies Puma, Nike, Nestlé, Unilever, Natura and Ricoh come out as the winners in this assessment. “These pioneering companies have not only set measurable and ambitious mid- to long-term targets (≥ 2020), but have also embedded their sub-policies in a holistic strategic vision of their attempt to minimize their negative environmental and societal impacts. Furthermore, they are in the process of establishing sustainable business ecosystems and creating truly shared value by also involving their suppliers and other stakeholders in their actions.”

Deloitte sees that an overall, globally accepted paradigm with the ability to serve as a starting point and an implementable benchmark for various industry clusters is still lacking. “We can state that sustainability, the triple bottom line, and corporate social responsibility have helped to define directions, but have not yet led to a common understanding of a necessary joint (minimum) effort by all industries. So far no process has been devised to help define clear roles & responsibilities for the various global industry clusters in an overall paradigm based on overall effectiveness motives rather than industry-specific efficiency programs.”

Major gaps

The Zero Impact Growth Monitor defines a set of important gaps that decrease the ability of a company to become more sustainable. First, there is a lack of consistent definitions and descriptions that companies use to explain their sustainability efforts in the various components examined. Secondly, there is often a gap between an (ambitiously) formulated strategy and the degree of implementation. A third finding of Deloitte describes an overall tendency that environmental goal-setting is more consistent towards supporting overall strategies than social goal setting. “The reason for these better environmental scores has to do with the advanced possibilities to monetize environmental strategy contributions to overall economic value added.”

Furthermore, although Deloitte’s research focused only on the so-called ‘leading companies’, there are still considerable differences in scores – even within the same industry. “We have seen the biggest gaps in some of those industries that will see the highest loss in Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) in case of the internalization of additional external costs. During our research we have also observed considerable differences in the scores of various industries, which in our view hinders potential innovation and collaboration in and between the industries.”

References

This article may be reproduced according to our terms of use with attribution (and link, if online) to www.tias.edu. To be cited as: “Assessment of companies’ strategies toward ‘Zero Impact Growth’”, Deloitte Innovation Sustainability Services, www.tias.edu, September 25, 2012.

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Zero Impact Growth Monitor 2012
John Elkington's Zeronauts

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