BrazilMajority of Middle East CEOs now rank sustainability a top priority
The focus on sustainability in Middle East boardrooms has seen stellar growth over the past year, according to a study by the IBM Institute for Business Value.
In the 2022 edition of its annual CEO study, IBM canvassed the views over 3,000 CEOs worldwide on their attitudes and priorities towards sustainability.
Globally, almost half of CEOs said that increasing sustainability is one of the highest priorities for their organisation in the next 2 to 3 years – up from roughly a third in 2021. In the Middle East (350 of the surveyed CEOs are based in the region), awareness and commitment is even higher, with 52% of CEOs saying increasing sustainability is a top priority.
Saad Toma, General Manager, IBM Middle East & Africa, said: “CEOs are leading during one of the most complex environments ever, including war, inflation, talent shortages, and the Covid-19 pandemic health crisis. Despite these challenges, they aren’t taking their foot off the gas when it comes to sustainability, and more now rank it among their top priorities.”
As a result, IBM’s researchers estimate that corporate spending on sustainability has more than doubled (as a percentage of revenue) over the last five years.
So what’s driving the sustainability drive? “CEOs tell us customers and employees are serious about sustainability – and expect results. Younger generations especially have high expectations,” said Sheri Hinish, a US-based leader at IBM Consulting.
The pressure felt most acutely by CEOs, however, comes not from consumers and employees, but from the stakeholders that they tend to deal with most directly: board members, investors, and partners. “CEOs are feeling heavy pressure from all sides to pursue sustainability. Their challenge is to respond with meaningful, authentic, impactful action that not only delivers societal benefits, but also business advantages,” said Hinish.
Globally, more than 80% of CEOs believe sustainability investments will drive better business results in the next five years, while in the Middle East, nearly 40% of CEOs believe that their sustainability investments will accelerate business growth. Leaders also see sustainability as a means that provides easier (and cheaper) access to capital, and as way of enhancing the company brand in the marketplace.
Bringing sustainability to life
However, despite the strategic focus, CEOs across the world and in the region struggle with bringing sustainability plans to life. A recent Bain & Company study found that sustainability transformations are notorious for being more complex – and more difficult to realise – than ‘other’ transformations.
IBM’s study reconfirms this challenge, with more than half (51%) of CEOs surveyed citing sustainability as among their greatest challenges in the next two to three years, with lack of data insights, unclear return on investment, and technology barriers as hurdles.
Meanwhile, across the board, sustainability is still in its infancy, meaning that companies still have a learning curve to undergo, and significant investments to make. While 95% of CEOs globally report being at least in the piloting stage of implementing their sustainability strategy, just under a quarter (23%) say they are implementing their sustainability strategy across their entire organisation.
Hinish: “For most CEOs, however, an urgency to act is encountering the reality that turning sustainability aspirations and commitments into measurable results is easier said than done.”
The study by IBM was conducted in cooperation with Oxford Economics, one of the region’s leading economic research and consulting firms.
