Incorporating sustainability into business practices is here to stay, but now is not the best time to focus on it. This is the main conclusion reached by the authors of the fifth report of the Sustainable Development Goals Observatory (SDG) after analyzing 101 Spanish listed companies. In the study, which was presented by the Social Observatory of the La Caixa Foundation and the Esade business school, it is stated that the pandemic has been a push for the incorporation of sustainability in business practices, but that the current situation is putting at risk this transition. Specifically, it is pointed out that “the post-pandemic socioeconomic context and the unstable environment caused by the war in Ukraine introduce new risks to the ability to reorient current development models and respond to the climate and environmental crisis, inequality and overcoming definitive of the pandemic.
“The cost of sustainability, which is a long-term investment, continues to be an obstacle in the short term, in which purely economic aspects continue to prevail,” says Ángel Castiñeira, director of the Chair of Leadership and Sustainability at the school. of business Esade and co-author of the report. For Raúl Estévez, from the Sustainability Observatory, it is a strategic error: “The financial stability of a company is part of sustainability. Sometimes you have to give up immediate benefits for long-term benefits.”
The current economic situation is not the only strategic tension that companies must face in the transition towards economic models that are more respectful of society and the environment. The consumer, current and future regulations, as well as financing, also put pressure on business management. “The pressure from the consumer is especially high in all those products that we eat or are in contact with the skin,” says Jordi Oliver, from the consulting firm Inèdit Innovació. However, Oliver acknowledges that in other items and services “the price continues to have a very important weight”. Castiñeira agrees: “The consumer says yes, but when it comes to the truth he is not as aware as he says, especially if sustainability implies higher costs or a change in habits.” For his part, Estévez argues that “it is normal for the most disadvantaged layers of society to prioritize price in situations of economic stress such as the current one, hence the need to legislate to force companies.”
In reference to current legislation, the experts consulted agree that regulatory pressure is still “low” in Spain, although they acknowledge that “there has been progress”. For Oliver, a clear example of this is the packaging sector, which is “revolutionized” by the regulatory changes under way in terms of waste reduction.
Another stress factor analyzed by the study is financing. “Investment funds and financing in general put pressure on companies to introduce sustainability into their strategy. The ones that receive this stress the most are the listed companies, but little by little it is also reaching small and medium-sized companies,” says Ángel Castiñeira.
