Economic headwinds are “freezing” sustainability progress

Sustainability goals are being missed or slowed, with enterprises blaming macroeconomic issues and pressure from external parties, according to a study from Google Cloud.

According to the study by The Harris Poll, conducted research on behalf of Google Cloud, executives recognised 8% year-over-year declines in sustainability projects that had moved into implementation phase.

This year’s study, which surveyed 1,476 C-suite executives worldwide, also found that Environmental, Social and Governance (ESG) efforts dropped from the number one organisational priority in 2022 to number three in 2023.

However, it wasn’t all bad news. According to the study, almost every organisation (96%) still has at least one sustainability program in place while 72% of respondents agreed that while everyone says they want to advance sustainability efforts, no one knows how to actually do it. This confused sentiment is up 7% since 2022.

Almost half (45%) of executives said they believe the current economic climate is regressing sustainability efforts, with regional impacts like the energy crisis in Europe negatively affecting progress. They also pointed to challenges in accurately measuring ESG impact and turning ambition into actions.

Four out of five executives believe that when companies are unable to effectively measure sustainability efforts, they are challenged to communicate authentically about sustainability progress, and they overstate their efforts.

Almost three out of four executives (72%) believe that most organisations in their industry would actually be caught greenwashing if investigated thoroughly, and when asked about their own companies’ claims, 59% of executives admitted to overstating — or inaccurately representing — their own sustainability activities.

But executives don’t admit this lightly. Respondents overwhelmingly agree that greenwashing should have harsher consequences (83%) and that sustainability should be more than a PR stunt (88%).

Yet 85% of executives said they felt pressure to do so. They are noticing that consumers or clients are becoming more vocal about their preference of engaging with sustainable brands.

The top five reasons for greenwashing include: attracting talent, lacking ways to measure progress, researching new clients and consumers, improving brand reputation and increasing revenue.

According to the research, until more organisations implement tools which empower executives to accurately measure, report and track performance, authentic communication will suffer.

There is also a divide among respondents who actually care about sustainability. 90% of those aged up to 23 (Gen Z) said they feel empowered to make the change to become more sustainable. This number dropped to 68% for those between 59 and 77 (Boomers).

Ultimately, nearly nine in ten (86%) executives believe they are empowered to make the change that evolves their organisation’s climate posture. This is good news, Google Cloud said, as they’ve clearly been pushing their organisations to set ambitious goals, with nearly 91% of organisations pursuing or have already met a net zero target.

But with only 41% of respondents either on track or already meeting those targets, there’s more work to be done.

To see how your firm can become more sustainable, read our brand new Green Enterprise Tech report here.