As the concept of what makes business sustainable continues to evolve, we've gathered insights and perspectives from around PwC focusing on what organisations are doing to create and measure sustainable value.
What makes businesses sustainable has moved beyond one-dimensional measures like how much diesel they use or plastic they recycle. Instead, it’s become much more about how much they benefit the community or pay in taxes – in other words, the total impact of their business activities. This is hard to measure, so tools like our Total Impact Measurement and Management (TIMM) help to quantify and value the impact, as well as helping business leaders identify trade-offs and compare options. Increasingly companies want to plan for a sustainable future with good growth in mind, and to ultimately be able to select the best strategy for their business and their stakeholders.
Business leaders also need to look beyond their own operations. We’ve found that companies are making progress in reporting on their approach to climate change, including reporting emissions from their supply chains. But despite this, companies in general aren’t cutting emissions fast enough. Globally, carbon intensity rates have fallen at only 0.7% a year over the last few years. But we need to cut carbon intensity by 6% a year, every year for the rest of the century, if we’re to give ourselves a reasonable chance of limiting global warming to two degrees Celsius.
We've also learned how private equity houses, often the canniest of buyers, have come to understand the value of including environmental, social and governance (ESG) metrics in pre-acquisition diligence. Their work to date though has focussed on identifying and solving potential problems at the beginning of the buy cycle, with only 15% measuring the difference on exit that their ESG initiatives have made, which suggests this is an area ripe for change.