Environmental

PwC Latin America Surveys Businesses in the Region to Find 80% Agree That Sustainability is Relevant to Their Business

As the United Nations Climate Change conference COP20 starts today in Lima, Peru, PwC Argentina releases the results of a survey on sustainability conducted in the Latin American region.
Image from 1st PwC survey on Sustainable Development in Latin America
1st PwC survey on Sustainable Development in Latin America

PwC As the United Nations Climate Change conference COP20 starts today in Lima, Peru, PwC Argentina releases the results of a survey on sustainability conducted in the Latin American region.  The 1st PwC survey on Sustainable Development in Latin America [Download] assesses the perception and commitment to sustainability among CEOs in the region.
 
An overwhelming majority of Latin American CEOs (80%) see sustainability as a relevant or priority issue for their business, and 71% of executives found it necessary for a competitive company to have a sustainability strategy. Many have translated this into action, where nearly half (49%) have already implemented actions as part of their core strategy to address sustainability.
 
Although the remaining half of polled companies have yet to implement sustainability within their core strategy, the trend is on the whole moving in the right direction. Over 80% of companies stated that their commitment to sustainability had increased over the past three years and they expect this trend to continue in the next three years. None expect the commitment to fall in the next three years.  Of the companies which say that sustainability is not a priority, 92% recognised that their commitment to the issue will increase in the next three years.
 
Marcelo Iezzi, Leader of the Sustainable Development practice, PwC Argentina commented: "Companies not only consider sustainability a relevant issue, but also half of them have already incorporated sustainability into their core business strategy. This indicates that companies are beginning to see the potential for their sustainability strategy to enhance their competitiveness".
 
The benefits
Businesses polled revealed the benefits they perceive as a result of sustainability management. 74% of respondents find that the main benefits are improvements in the brand and reputation of the company. Other benefits identified include the strengthening of relations with stakeholders (50%) and employee satisfaction, commitment and/or retention of staff (37%). Other benefits less mentioned were on competitive advantage (33%), effective risk management (27%), cost saving (23%) and product, service or market innovation (22%).
 
Interpreting the survey results, Marcelo Iezzi, Leader of the Sustainable Development practice at PwC Argentina commented: “We are seeing two different views by companies on their perceived benefits of having a sustainability strategy. On the one hand, most of the companies whose strategy is oriented towards external factors describe reputation, dialogue with stakeholders and worker retention as the main benefits. On the other hand a smaller group of companies think that the benefits from their sustainability strategy are related to their core business through improved competitive advantage, cost savings and risk management. The second group potentially would be more proactive and strategic in their sustainability management.”
 
Education and the environment
The companies surveyed are most focused on social investments on education and environment. Among the areas of investment, emphasis was placed on preschool, primary and secondary education (65%), and the environment (63%) followed by technical and/or university education (52%), social and labour inclusion (52%) and health care (50%).
 
Half of the survey participants (47%) directly work with the beneficiaries, where the company usually assumes responsibility for the design, coordination and execution of social programmes. A further 27% of respondents manage their social investment indirectly through civil society organisations or state agencies and 26% of participants do so in a mixed manner.
 
Climate change
Extreme weather has affected 45% of the Latin American companies surveyed in the last five years.   The effects most mentioned by respondents include changes in rainfall patterns (58%) and droughts (47%).  Other impacts include transport interruption (40%), floods (36%), rises in average temperature (34%) or cuts in supply of raw materials and inputs (33%). However, only a quarter of companies have developed a climate risk analysis:  68% of these focused on their operations, and only 20% focused on supply chain.
 
This survey also considered the measures companies implement to reduce the impact of their activities. Only 32% of executives confirmed that their company is measuring greenhouse gas (GHG) emissions while 62% answered that their company has not yet implemented a system to do this. Of those who measured GHG emissions, 61% measures scope 1, 24% covers scope 2 and only 15% measures scope 3, reflecting the relative difficulties of measuring emissions beyond the immediate boundaries of a business.
 
A quarter of survey participants confirmed that their company has CO2 emission reduction goals. 34% of respondents do not have a CO2 emission reduction goal but is planning to set one in the next 3 years. Companies revealed that setting goals is a response to information requirements from shareholders (39%), the government (37%) and international financial institutions (32%).  
 
“The survey suggests that climate change is relevant to the region as its impacts have affected nearly half of our sampled companies, and that there is also emerging strategic response to the risk. But there is still progress to be made. More companies need to consider the real risks of climate change in their business operations, and similarly more companies need to measure and manage the impacts of their business on climate change”, concluded Iezzi.
 
About the report
1st PwC Survey on Sustainable Development in Latin America involved the participation of 205 CEOs and executives in 18 countries of the region. The Survey was conducted between August and September 2014 through an online questionnaire. To have the complete report please go here.  
 
About PwC
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