As companies across industries navigate the complexities of sustainability, the challenges they face continue to evolve. To better understand these struggles and opportunities, Kaizen Institute conducted a series of LinkedIn polls in September 2024. The results provide a snapshot of the current state of Environmental, Social, and Governance (ESG) efforts, as well as areas for potential improvement.

1. Employee engagement: The key to achieving sustainability goals

When asked about the biggest challenge in achieving sustainability goals, nearly half of the respondents pointed to a lack of employee engagement. While financial and regulatory obstacles exist, the results show that engaging employees in sustainability initiatives is a pressing issue.

What is your company’s biggest challenge in achieving sustainability goals?

• Lack of employee engagement: 48%
• Unclear targets: 26%
• Regulatory complexities: 16%
• High implementation costs: 10%

These findings suggest that while companies may have clear sustainability targets, they struggle to translate these into actionable, employee-driven efforts. This is where KAIZEN™’s philosophy of Continuous Improvement, driven by involvement at all levels of the organization, becomes crucial. By empowering employees through structured routines, businesses can foster a culture of engagement and collective responsibility for sustainability outcomes.

2. Environmental responsibility dominates the ESG agenda

It’s no surprise that environmental concerns emerged as the top ESG priority in our poll, but it’s notable that only a minority of respondents reported giving equal attention to social and governance factors. This imbalance indicates a need for more holistic approaches to sustainability.

Which ESG area is your company prioritizing the most?

• Environmental: 40%
• Governance: 23%
• Social: 14%
• All equally: 23%

The strong emphasis on environmental efforts reflects the global demand for action on climate change. However, governance and social initiatives, including issues such as diversity, transparency, and employee well-being, remain underrepresented. KAIZEN™ methodology can help companies strengthen their approach to governance and social responsibilities by incorporating structured problem-solving methods that ensure all three ESG components are prioritized equally and strategically.

3. External stakeholders are driving sustainability reporting

Our poll shows that both customer demand and regulatory compliance are the key drivers behind sustainability reporting. Companies are responding to external pressures from customers and regulators, reinforcing the idea that sustainability efforts are increasingly influenced by stakeholders outside the organization.

What’s the main driver for your company’s sustainability reporting efforts?

• Customer demand: 33%
• Regulatory compliance: 31%
• Brand reputation: 26%
• Investor expectations: 10%

This data highlights a shift toward externally driven sustainability initiatives. While regulatory compliance ensures businesses meet legal requirements, customer demand is an equally powerful force, showing that conscious consumers are pushing companies to be more transparent and responsible. KAIZEN™ encourages organizations to go beyond these external pressures by adopting a mindset of Continuous Improvement, where sustainability becomes an integral part of business strategy, not just a reaction to external demands.

4. The case for digitalization in ESG data collection

A significant portion of companies rely on manual input for collecting ESG data, which can be both time-consuming and error-prone. This finding underlines the need for digital transformation in sustainability reporting processes.

How is ESG data most often collected in your company?

• Manual input from departments: 48%
• Automated data systems: 26%
• Not yet systematically collected: 17%
• External consultancy support: 9%

The reliance on manual data collection suggests that many companies have yet to fully integrate digital tools into their ESG reporting processes. Automating data collection can not only reduce errors but also enhance the speed and accuracy of sustainability reporting. By adopting KAIZEN™’s focus on streamlining operations and eliminating waste, businesses can transition from manual to automated systems, creating more efficient and effective sustainability practices.

Outlook: Building a sustainable future with KAIZEN™

As companies continue to struggle with sustainability challenges, these poll results provide insights into areas where improvements are needed. Employee engagement remains a major barrier to achieving sustainability goals, while environmental concerns dominate the ESG agenda. External pressures, from both customers and regulators, are driving reporting efforts, and manual data collection presents an opportunity for digitalization.

By applying KAIZEN™ methodologies, companies can tackle these challenges head-on. Whether it’s increasing employee involvement, balancing ESG priorities, or embracing digital tools for data collection, KAIZEN™ offers a roadmap to sustainable, Continuous Improvement. As we continue exploring these issues, Kaizen Institute remains committed to supporting organizations on their sustainability journey.

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