Published 2017-11-22

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Large companies’ sustainability targets short-sighted, study shows

Only 7 of the 88 biggest Swedish listed companies have adopted sustainability targets that extend more than three years ahead. This is shown by a report from the Misum research centre — a disappointing result, according to Misum’s Executive Director Lin Lerpold.

‘I’m astonished and, in fact, completely baffled by their short-termism. Investments in sustainability must be seen in the same way as investing in product development.’

The speaker is Lin Lerpold, who heads the Mistra Centre for Sustainable Markets (Misum). She is also Associate Professor at the Stockholm School of Economics and responsible for the study Walking the Talk.

‘Many companies refer to the UN sustainability targets in Agenda 2030, which extend to 2030, after all.’

In the report, researchers at Misum have examined 88 of the largest listed companies’ sustainability communications. The researchers have reviewed the companies’ own annual reports and sustainability reports, totalling about 11,000 pages, and also retrieved information from the companies’ public web pages.

The researchers have compiled statistics on the companies’ sustainability targets, such as reduced carbon dioxide emissions and energy or water consumption. Only seven of the companies studied have sustainability targets of this kind that extend beyond 2020, and only four have post-2030 targets. The forest industry company Holmen is alone in having targets extending to 2050. This means that the great majority, more than nine-tenths, have targets that extend only a few years ahead.

‘This bears out the notion that companies are mostly entertaining general visions and uttering fine words no one can object to. It’s important to make pledges that are long-term and measurable, so that the companies can be held accountable. This applies to sustainability targets just as it does to financial ones, for instance,’ Lerpold says.

This is the second time Misum has presented a similar compilation. Compared with the previous study, in 2015, Lin Lerpold sees an increasing number of measurable targets in total. It is also encouraging that 42% of the companies have a sustainability manager — almost twice the proportion two years ago.

‘Generally, compared with 2015, sustainability issues are higher on the companies’ strategic agendas today. More of them refer to sustainability as part of the company’s core values. This is a positive development.’

Generally, the companies that work most closely to consumers are also those that are best at communicating their sustainability efforts. New companies, especially in the gaming industry, are the worst. Lin Lerpold points out that the actual sustainability work undertaken by the companies was not studied — just how they communicate it.

Lerpold says Misum is considering whether to do a follow-up in 2019, but for that new, large-scale data collection is required.

‘We have a hypothesis that family-owned companies have got further with sustainability efforts. We’re keen to investigate that, but it’s about having the time and resources.’