May 30, 2021 | less than a minute read

Corporate Sustainability: cost centre or value driver?

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Hanny Widjaja

VP Global Business Assurance and Food Services

Get in touch

Hanny Widjaja

VP Global Business Assurance and Food Services

I left (yet) another meeting with the same question: why is sustainability strategically undervalued?

From recent conversations with a few well-known brand/organisations, there's no doubt that many companies still need the sustainability business case to invest. I'm sure it's not because they don't see the value in developing thorough and meaningful programs to sustainability. Could it because they perceive sustainability as a cost centre rather than a value centre? Their focus is very much on compliance and value protection; not on where the real or significant risks, impacts or opportunities may be.

One of the main reasons I can conclude based on the feedback from these meetings, why sustainability is still seen through a cost lens is because it's not fully strategically aligned with their core business process. So, until sustainability is strategically integrated and understood in terms of its potential for value creation, it will remain side-lined as a cost.

How does your organisation view sustainability?

CEOs are increasingly facing the conflict of short-term profitability pressures versus long-term sustainability issues. Social profit (in terms of sustainability and social good) and financial profit are increasingly intertwined, as savvy shareholders and an informed public demand corporations, large and small alike, use their influence for the good of the masses. The concepts of social and financial profit may no longer be at loggerheads, however the approach each CEO takes to balancing short-term incentives with long term sustainability issues should not be a decision taken lightly.

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