German research: Sustainable management is key to long-term success

Source: Handelsblatt, 10 December 2003

Over half of all companies listed in the German DAX-30 index view sustainable business practices as "key to the long-term success of the company", according to a recent survey by Susanne Bergius, Sustainability Expert of the Handelsblatt.
Among the companies participating in the study were WBCSD members adidas-Salomon, Allianz, BASF, Bayer, DaimlerChrysler, Deutsche Bank and Henkel.

The survey brings big differences to light concerning motivation, expected benefits, management systems, investing policy, goals and the courage to make real statements of conditions and to admit weaknesses.

About one third of the companies surveyed – including BASF, Bayer, DaimlerChrysler and Henkel – highlighted that general sustainable development policies are essential to the long-term economic success of their company. The other third – including adidas-salomon and Deutsche Bank – specifically listed corporate social responsibility and business ethics as the main motivation behind their commitment.

These differences, however, don’t mean that some businesses act out of ethical considerations, while others do so only for their own good. Often, communication culture and objectives determine which arguments are used to sell a strategy effectively.

"Frequently, efforts for sustainability are rooted not only in the economic, but in the ethical convictions of top management, even if this is not communicated externally", says Paschen von Flotow, Head of the Sustainable Business Institute at the European Business School. Despite these differences, ethical values of top level management – not only economic considerations – are often the driving force behind companies’ efforts, he said.

Nevertheless, companies recognize economic benefits such as the opportunity to:

develop innovative and eco-efficient products to improve competitive advantages
boost operational effectiveness
reduce environmental risks
motivate employees
improve corporate reputation
create alternative ways to access fresh capital
The survey also revealed that companies face a variety of problems and challenges in the practical implementation of sustainable development policies, especially in the:

global coordination of projects
inadequate global reporting
balancing of short- and long-term goals
incomplete internal guidelines
Business is carrying forward the sustainable development agenda, but governments and international organizations will play a bigger role in the future, according to German companies. Governments should install consistent, reliable regulatory frameworks to minimize risk, promote efficiency and encourage innovation, according to one third of the companies.

However, another third requests incentives and room for voluntary initiatives and opposes further regulations, laws or taxes. Other companies ask that the public, consumers and society as a whole take more responsibility.

Read the full German article