Larger companies: 'COVID-19 pandemic increases need for sustainability'

Particularly large companies (250 - 1,000 employees) see a stronger need for sustainability due to the COVID-19 virus pandemic than shortly before the crisis. 79% report that this need has increased. A third have already invested in renewable energy. Surveyed companies report investing in sustainability mainly for a better environment, but also for cost savings. At the same time, they want to secure the future of their business.

This is according to ING research among hundreds of companies. "In these times that are mainly about corona, it is precisely sustainability that has become more important for companies," says Annemein Kolk, director of corporate at ING. "This has become very clear as we did the survey twice: just before the crisis, in response to the Climate Accord, and now a year later. The first measurement already showed that companies felt sustainability was necessary and, moreover, that the business community should take the lead. We recently repeated the survey to see the influence of corona on sustainability plans. What emerges: more than half of the companies started to consider sustainability more important during the corona crisis. Among large companies, this is even more than two-thirds."

59% of companies say they are much engaged in sustainability. Among large companies, this percentage is as high as 74%. In many cases, these measures are relatively easy to implement. These include energy savings, recycling, reducing and separating waste, saving water and using renewable energy. More and more companies are also focusing on reducing their CO2 emissions; 29% of companies are doing so, compared to 26% previously. The development of sustainable products and production methods (15% to 18%) and circular production (12% to 16%) are also common measures.

When looking at companies' investment plans, a clear divide is visible between large and medium-sized companies. For example, ING figures show that a third of medium-sized companies have postponed investment plans in sustainability. Among large companies, a third have actually accelerated these plans. Investment costs are expected to equal around 15% of turnover, which is slightly higher than a year ago. A sustainable restart after loosening corona measures is more often given high or very high priority among large companies (62%) than among medium-sized companies (50%).

Annemein Kolk: "We clearly see that during corona, large companies have started to speed up sustainability, while SMEs have been holding back a bit. This is quite understandable because in the past year and also now, people are mainly focused on surviving the crisis. That makes it all the more important to opt for sustainable investments later when the economy recovers."

The environment is companies' main driver for sustainable business, followed by cost savings and avoiding waste. Among large companies, 55% cite sustainable impact as more important than profit maximisation, compared with 43% among medium-sized companies. Companies are increasingly using sustainability as a differentiator. For instance, companies report that their customers (43%) and employees (31%) consider it important to choose a sustainable business. Companies also see new market opportunities (32%) and new knowledge (29%) arising from sustainability.

"More and more large companies say they are adopting sustainability to distinguish themselves and to ensure business continuity," says Annemein Kolk. "They also cite all kinds of business benefits that sustainable business brings them, such as priority in orders, a better business model and a higher margin."

Investment in sustainability requires new technologies, time and external funding. Sustainability is significantly more often financed through bank financing and from grants in 2020, ING figures show. However, own funds are still most often used. Most companies assume a payback period of 5 to 10 years on sustainable investments.

Most companies choose to offset investments in sustainability against their margin. However, almost half think their customers are willing to pay these extra costs.

Companies were also asked about the Climate Agreement. Like last year, the majority of companies are positive about the Climate Agreement. However, half of the respondents do think that the targets set out in the agreement will not be met. Here too, a difference is visible between large companies and smaller organisations; large companies are more optimistic than medium-sized companies about achieving the climate objectives. However, large companies also call the Climate Accord ambitious.

Author: Wouter Hoeffnagel