Businesses are working full steam ahead to gather data about their sustainability and climate footprint. Sixty-seven percent see an opportunity to further develop their own organization. However, only about a third of these companies feel ready for their new obligations. Companies see the investment requirements to finance the transformation as high-more than half of the businesses will likely need outside capital. Many banks already offer products for financing the transformation but the demand remains modest. These are the findings of the Sustainability Transformation Monitor 2024.
Businesses are increasingly professionalizing their sustainability management. It is no longer a question of -whether- but of -how.- Despite multiple crises, the topic of sustainability has become more or much more important for over 75 percent; for more than half of the businesses, it has already become a central aspect of their corporate strategy.
Nonetheless, only about one third of the companies see themselves in a position to comply with statutory regulations that lawmakers have decreed for 15,000 companies. This value fluctuates strongly depending upon whether the companies have already supplied reports on sustainability and when they are affected by their obligation to report on sustainability.
The overwhelming majority recognizes the value of sustainability reporting
The overwhelming majority of businesses (67 percent) recognizes, however, the value of more extensive reporting for the further development of their own organization and greater transparency for stakeholders. Of those surveyed, 80 percent-which is eight percent more than a year ago-confirmed that the topic is well-established at board level. In 54 percent of real economy corporations, sustainability is also a strategic goal. -Our Sustainability Transformation Monitor shows that sustainability has shifted much more strongly into corporate focus. We are making progress; the regulatory architecture especially seems to be effective. There is no reason, however, to rest on our laurels,- says Jakob Kunzlmann, economic expert at the Bertelsmann Stiftung. Sustainability officers from 362 companies took part in the survey. Of those, about 270 are active in the real economy and more than 90 are active in finance.
Future employees, the climate crisis, and energy prices are the most important driving factors
-Climate change is the greatest risk to our economic and financial system. Therefore, climate protection must be integrated as a central goal when making investment decisions. For the real economy, it is a strategic necessity,- explains Philipp Wesemann, climate protection expert at the Stiftung Mercator. At any rate, half of the banks surveyed take sustainability criteria into account when giving loans or determining interest. -And the companies are registering that commitment to sustainability strengthens their employer’s brand.-
This is because, in the real economy, future employees are seen as -drivers- by half of those surveyed; 16 percent seen them as -strong drivers.- -Especially in times of labor shortages and growing expectations by potential personnel with regard to the employer’s sustainability, companies often cannot afford to ignore the topic,- says Laura Marie Edinger-Schons, professor of sustainable economics at Universität Hamburg and the University’s chief sustainability officer. -The competition for the best young minds is therefore a stronger direct driver of sustainability in companies than climate activism in the streets.-
While climate protests capture the public attention, those surveyed rarely see those activities as directly driving sustainability activities in companies. Only five percent of those surveyed in the real economy say that activists are a -strong- driver of sustainable economic management.
However, it is not only human beings who play an important role as drivers or dampers. In addition to climate change (83 percent), higher energy prices are crucial drivers of sustainability. This is what 60 percent of those surveyed in the real economy say. At the same time, 54 percent of those surveyed say inflation is a central impediment to transformation.
Sustainable finance: transformation funding potential not yet fully tapped
Financial markets have an important steering function in sustainability transformation. When capital is distributed with greater emphasis on sustainability criteria, non-sustainable companies face fewer possibilities for raising capital or their own costs for capital increase. Yet only a third of the companies said that sustainability already plays an important role in the financing of their organization. Forty percent say that the topic is still rather insignificant. This could change in the future, because companies see investment needs to finance the transformation as high. More than half of them assume that their companies will be dependent upon outside capital.
Companies in the real economy and finance sectors see the relevance of sustainability in financial discussions differently. A majority of surveyed banks (78 percent) already see the topic as important or very important, while many companies in the real economy (40 percent), on the contrary, do not see it as especially important. Yet both sectors agree that sustainability when it comes to financing will become more relevant alongside classic criteria such as pricing and credit-worthiness. Many banks already offer products for financing the sustainability transformation but the demand from companies remains modest.
Sustainability Transformation Monitor
A total of 362 companies took part in the online survey for the Sustainability Transformation Monitor 2024. The goal of the Sustainability Transformation Monitor is to follow the sustainability transformation in the economy on the basis of evidence. It focuses especially on the effective interplay of the real economy and business finance in the transformation. The survey is conducted every year. The Sustainability Transformation Monitor was developed for the second time in cooperation with the Bertelsman Stiftung, the Stiftung Mercator, Universität Hamburg, and the Peer School for Sustainable Development. The Sustainability Transformation Monitor is supported by a broad range of partners: the German Council for Sustainable Development, the UN Global Compact Network Germany, the Bundesverband Nachhaltige Wirtschaft e.V., B.A.U.M, and the science platforms Sustainabile Finance and CRIC.
About Universität Hamburg: To Research, To Teach, To Educate and Form
Universität Hamburg was founded in 1919 and is one of Germany’s strongest research institutions. Following its success in the Excellence Strategy of the Federal and State Governments, a national grant competition for top research in Germany, it became a University of Excellence in 2019. Over 43,000 students are enrolled in roughly 180 degree programs. Sustainability plays a significant role in all areas of the University, from research and knowledge exchange to administration. Sustainability measures and activities have been coordinated by the Sustainability Office since 2022 and headed by the chief sustainability office, Laura Marie Edinger-Schons. www.uni-hamburg.de
About the Bertelsmann Stiftung: Motivating people. Shaping the future.
The Bertelsmann Stiftung advocates for participation-politically, economically, and culturally. Our spectrum: education and the next generation, democracy and social cohesion, digitalization and the common good, Europe’s future, health, sustainable and social market economy. We put human beings first. People move, change, and improve the world. We foster knowledge, impart skills, and develop solutions. The non-profit Bertelsmann Stiftung was founded in 1977 by Reinhard Mohn. www.bertelsmann-stiftung.de
About the Stiftung Mercator:
The Stiftung Mercator is a private, independent, and non-profit foundation based on scientific expertise and practical project experience. Since 1996, it has been advocating for a cohesive, participatory society. To reach these goals, it fosters and develops projects that facilitate participation and cohesion in an increasingly diverse society. Stiftung Mercator advocates for an open, democratic Europe; the digital transformation of the state and society in line with basic rights; and socially just climate protection. The foundation works in Germany, Europe, and all over the world. It has especially close links with the Ruhr area, where the founding family hails from and the foundation headquarters are located. www.stiftung-mercator.de; www.aufruhr-magazin.de -the foundation’s house publication.
About the Peer School for Sustainable Development e.V.:
We see the Peer School for Sustainable Development as a disruptive learning space. We provide the people responsible for sustainability within companies, foundations, and academia as well as the next generation in sustainability with an opportunity to learn together and share their expertise and experiences. Our over 200 members and scholars see themselves as teachers and pupils and contribute new ideas. Our vision is regular, personal exchange, sharing knowledge, and further developing our main topic together. www.peerschool.de