European business leaders commit to increased sustainability spending by 2026

Ninety per cent of business leaders across Europe are planning to either maintain or escalate their investments in sustainability by 2026, according to a recent survey conducted by German business software maker SAP.

The survey, which included 1,702 participants, highlighted key motivations driving these actions, including the imperative to fulfil board environmental commitments (40 per cent), the desire to enhance the company’s societal image (39 per cent), opportunities for developing new products (38 per cent), and the aim to boost revenues and profits (37 per cent).

Edward Manderson, a lecturer in environmental economics at the University of Manchester, expressed surprise at the widespread belief among business leaders that sustainability initiatives can improve profitability.

SAP’s annual study sheds light on the challenges faced by companies as they strive to advance sustainability plans, aligning with Europe’s goal of achieving carbon neutrality by 2050.

Business leaders identified various barriers to sustainability actions, including challenges in measuring return on investment, concerns about environmental impact, a lack of clarity on integrating sustainability into business practices and organisational strategy, and worries about insufficient funding.

Notably, only 13 per cent of companies reported including their chief financial officer in sustainability decisions.

Sarwar Khan, Global Head of Digital Sustainability Business at BT, the UK’s largest broadband and mobile provider, emphasised the lack of a clear perspective on the required investment and financial opportunities as hurdles for CFOs.

As global regulations tighten around companies’ environmental impact, providing greater corporate disclosures, particularly concerning Scope 3 emissions from corporate value chains, emerged as another significant challenge.

Khan noted that organisations are now recognising the importance of addressing Scope 3 emissions in their journey towards achieving net-zero goals.

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