Thursday, September 25, 2014

Tomorrow's Value Rating 2014 Report

The 2014 edition of Tomorrow's Value™ Rating (TVR) assesses the sustainability performance of the word's 45 biggest companies across five key domains: ​strategy, engagement, governance, innovation and value chain. In essence it evaluates how well companies understand their risks and opportunities, and how prepared they are to create future business value.

TVR 2014 finds that companies are embedding sustainability into their business strategies, so they are moving in the right direction.  Even though all of the companies assessed are sustainability leaders, the average score was still under 70 percent. There are some serious challenges ahead even for corporate leaders.

A paradigm shift is required if we are to avoid significantly depleting natural resources, however, only a few companies appear to be using their sustainability as a growth strategy and fewer still comprehend the extent of the required changes.

Only half of the companies analyzed by the TVR have meaningful SMART targets against material issues. Companies should expect growing calls for clarity and transparency and this will reveal the efforts of many to be grossly inadequate. Many companies do not see the value integrating sustainability risks and opportunities into their risk management approaches.

One of the more interesting findings is that this year green bonds appear to have become a mainstream way of helping businesses to be more sustainable. 

Innovation remains the key success factor and the Rating goes so far as to say that innovation itself needs to be "re-invented in order to find new processes and products that align with the social and environmental challenges of society." The TVR found that only three companies (Unilever, Microsoft and Nestle) are using sustainability innovations to drive future growth and competitive advantage.

To be a leader, sustainability must be at the core of product innovation and business strategies. TVR leaders are the companies that demonstrate greater ambition than their peers and set meaningful, long term SMART targets on key material issues. For the second year in a row, Unilever is the top sustainability leader followed by Holcim, Intel and Nestle which are tied for second position, with Diageo ranking third.

The Food and Beverage sector faces overwhelming challenges: the need to produce more food for a growing population, while using less water, with less land to cultivate, serviced by a dwindling agricultural workforce.

The construction sector will see a greater demand for solutions that use less finite mineral resources and water; produce less waste, emissions and pollution; and provide greater comfort and safety. This sector has already laid out the building blocks of sustainability.

The oil and gas sector is at the forefront of one of the greatest challenges facing humanity today is meeting increased energy demand within planetary boundaries. This sector needs to develop a vision for moving towards a low carbon energy future while developing reliable technologies.

Companies interested in arranging an open conversation through our ‘reality check’ service, can send an email to the following address: TVR2014@dnvgl.com.  The reality check service will review your sustainability or corporate responsibility report against the TVR 2014. A ‘reality check’ also includes: 1. Understanding how your sustainability performance compares to other sustainability leaders. 2. Validating your existing or emerging strategies and programmes and learning from global best practice. 3. Receiving specific feedback on your sustainability reporting and our recommendations based on industry best practices and trends. 4. Receiving insight about emerging risks and opportunities, both globally and within your sector.

For more information click here.

Related
Innovation is Key for Sustainability: Best Companies are Getting Better According to Tomorrow’s Value Rating 2013

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