Four in five companies would take regulatory penalties to avoid sustainability initiatives, research finds • With commentary from Acre's Marie Cloherty

02 February 2023 by Marie Cloherty
blog author

​​​Commentary from Marie Cloherty for People Management, published on 23.01.23, original source: Four in five companies would take regulatory penalties to avoid sustainability initiatives, research finds, Author: Arunth Sriganthan

Four in five companies would take regulatory penalties to avoid sustainability initiatives, research finds.

But while the majority recognize their environmental strategy as a priority, experts say economic turbulence has pushed it down the business agenda.

The majority (82 per cent) of companies admit they would accept regulatory penalties to avoid taking on sustainability initiatives, despite most seeing it as a high priority, research has found.

In the global situation report from Software AG, which surveyed more than 2,000 decision-makers from the UK, US, Germany and France, a further 84 per cent admitted to prioritising commercial success over sustainability.

However, 95 per cent of leaders agreed that sustainability was either a top or high priority, while 84 per cent believed that without a clear sustainability strategy they were likely to lose staff.

The data also revealed that technology was acting as a barrier to implementing sustainability strategies, as in a third (32 per cent) of cases the necessary technology was simply not in place – while a third (36 per cent) said they were unable to adequately track the progress of sustainability initiatives to determine their effectiveness.

David W Duffy, chief executive and co-founder of the Corporate Governance Institute, said that despite the economic downturn and widening skills gap, employees “still have a say” in where they work, with ESG and sustainability playing a key part in retention. 

“If a company’s environmental strategy isn’t good enough, people will find another job and move,” said Duffy. “This is especially true thanks to working from home, which has opened new geographies up for many workers. Don’t forget, people are also becoming more vocal about climate action; they’re demanding and expecting more.”

Meanwhile, previous People Management reporting found that three in five (58 per cent) employees are considering leaving their jobs in the next 12 months because their employer doesn’t share their values. 

The study by Amba revealed that two thirds (62 per cent) were actively looking for an employer that shared their beliefs, while more than two thirds (69 per cent) of the group felt it was important for their workplace to have high ethical standards.

Sarah Williams, head of employment at Taylors Solicitors, said HR managers were key to “driving forward sustainability” but this has become “extremely difficult” in recent years.  

“HR professionals [pre-Covid] developed ideas and provided support through training, developing ideas, systems and policies such as a code of conduct, competency frameworks and leadership schemes,” said Williams, adding that while now might not be the right time to engage senior managers in sustainability, “HR professionals must not overlook this subject and should certainly keep it on their long-term to-do list”. 

However, Marie Cloherty, executive director of sustainable business at Acre, said the results did not point to sustainability “dropping down the agenda” as businesses were competing to hire from the most “readily informed generation ever”. 

“The economic systems we are using were formed well over a hundred years ago,” said Cloherty, who questioned whether such systems were still working for organizations and if there would be a “shift in the number of businesses not needing to take commercial penalties to truly evolve” if they were changed.

With 13 years’ commercial experience spanning business development and team leadership, Marie has placed multiple executive-level positions across multi-stakeholder initiatives, consultancies and industry & now oversees our Sustainability Team. From field to board room, she understands the crucial soft skills that enable purpose-driven professionals working to leverage the power of private finance to ultimately solve some of the world’s greatest modern challenges. Her areas of expertise span executive search, interim, advisory and leadership assessment across the broad sustainability agenda.


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