THE DECADE TO DELIVER - A CALL TO BUSINESS ACTION The United Nations Global Compact -Accenture Strategy CEO Study on Sustainability 2019

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THE DECADE TO DELIVER - A CALL TO BUSINESS ACTION The United Nations Global Compact -Accenture Strategy CEO Study on Sustainability 2019
The United Nations Global Compact —Accenture Strategy
CEO Study on Sustainability 2019
THE DECADE TO DELIVER - A CALL TO BUSINESS ACTION The United Nations Global Compact -Accenture Strategy CEO Study on Sustainability 2019
United Nations Global Compact – Accenture Strategy

                                   CEO STUDY ON

“We have to mobilize the
                                                                 THE DECADE TO DELIVER
private sector, it is 75% of the
                                                                 In the world’s most comprehensive CEO Study to date
global GDP. Moving forward,                                      on the business contribution to the UN Sustainable
                                                                 Development Goals (also known as the Global Goals)
collaboration with business -                                    conducted by the United Nations Global Compact and
                                                                 Accenture Strategy, more than 1,000 top executives
and the key CEOs in the world                                    across 21 industries and 99 countries candidly reflect
                                                                 on the opportunities and challenges to sustainability

- is crucial when it comes to                                    since the launch of the Global Goals.

fighting climate change; but                                     At the same time as they acknowledge the opportunity for
                                                                 competitive advantage through leading on environmental,

also, to meet sustainable
                                                                 social and governance issues and report real progress,
                                                                 impressive innovation and impact; they recognize the
                                                                 business community could and should be making a far
development goals, eradicate                                     greater contribution to achieving a sustainable global
                                                                 economy and society by 2030. They also point to the
all extreme poverty by 2030,                                     barriers that are preventing business from doing more and
                                                                 the enablers that would unlock the potential of the private
and we’re not on track on this.”                                 sector.

                                                                 Not content with the status quo, these CEOs from across
                                                                 industries, geographies and companies large and small
       H.E. António Guterres,                                    are sending a clear and unequivocal call to their sectors

       Secretary-General,                                        and peers to step up action and change market systems
                                                                 to drive a decade of delivery on the Global Goals.
       United Nations
                                                                 September 2019

                                                                                                      UN GLOBAL COMPACT CEO STUDY 2019 | 3
THE DECADE TO DELIVER - A CALL TO BUSINESS ACTION The United Nations Global Compact -Accenture Strategy CEO Study on Sustainability 2019
    As a special initiative of the UN Secretary-General, the United
    Nations Global Compact is a call to companies everywhere to align
    their operations and strategies with ten universal principles in the
    areas of human rights, labour, environment and anti-corruption.
    Launched in 2000, the mandate of the UN Global Compact is to
    guide and support the global business community in advancing UN        INTRODUCTION                                                07
    goals and values through responsible corporate practices. With
    more than 9,500 companies and 3,000 non-business signatories
    based in over 160 countries, and more than 60 Local Networks,          STUDY PARTICIPANTS                                          08
    it is the largest corporate sustainability initiative in the world.

    For more information, follow @globalcompact on social media
    and visit our website at                          EXECUTIVE SUMMARY                                           14

    ABOUT ACCENTURE STRATEGY                                               REALITY CHECK                                               20
    Accenture is a leading global professional services company,
    providing a broad range of services and solutions in strategy,         Business contribution to the Global Goals is not enough
    consulting, digital, technology and operations. Combining              Special Focus: Fourth Industrial Revolution
    unmatched experience and specialized skills across more than           (4IR) Technologies and the Global Goals
    40 industries and all business functions—underpinned by the
    world’s largest delivery network—Accenture Strategy works
    at the intersection of business and technology to help clients         BEYOND INCREMENTALISM                                       34
    shape the future of their organisations and create sustainable
    value for their stakeholders. With more than 482,000 people
                                                                           A call for greater action from business
    serving clients in more than 120 countries, Accenture drives
                                                                           and real systems change
    innovation to improve the way the world works and lives.
                                                                           Special Focus: CEOs on Gender Equality and Climate Action

                                                                           CALL TO ACTION 1                                            45
    The CEO Study program is an effort to enhance understanding
    and commitment between the United Nations and the private              Raising ‘threshold’ ambition and leading
    sector. The program is an extensive review of the advancing
                                                                           systems transformation
    corporate sustainability movement, and the publications
    coalesce dominant views of CEOs, business leaders and UN               Special Focus: CEOs on transforming the food system
    executives to track developments in sustainability. Accenture
    and the UN Global Compact have established a solid and
    successful collaboration for this program, with the following          CALL TO ACTION 2                                            63
    CEO Study publications to date:
                                                                           Collaborating to shape realistic, science-based solutions
    2010: A New Era of Sustainability
                                                                           Special Focus: Responsible leadership performance analysis
    2013: Architects of a Better World

    2015: Special Edition: A Call to Climate Action
                                                                           CALL TO ACTION 3                                            73
    2016: A Window of Opportunity

    2018: Special Edition: Transforming Partnerships for the SDGs          Defining responsible leadership for 2030

                                                                           ACKNOWLEDGMENTS                                             82

THE DECADE TO DELIVER - A CALL TO BUSINESS ACTION The United Nations Global Compact -Accenture Strategy CEO Study on Sustainability 2019

    This year marks the fifth triennial United Nations Global          than 1,000 CEOs through an online survey that was
    Compact – Accenture Strategy CEO Study, which in 2019              translated in 9 languages. In parallel, we further deduced
    is a joint publication with the UN Global Compact 2019             insights from more than 1,500 business executives
    Progress Report. As the latest milestone in over a decade of       through the annual implementation survey. Second, we
    research, the 2019 CEO Study draws on insights from 1,000          conducted more than 100 in-depth one-to-one interviews
    CEOs across 21 industries and 99 countries, reflecting over        with CEOs, chairpersons and presidents of UN Global
    100 in-depth interviews, and a further 1,500-plus senior           Compact companies around the world to understand the
    business leaders who responded to the UN Global Compact            wider strategic context - from geopolitics to investment
    implementation survey.                                             in technologies to challenges and opportunities on
                                                                       sustainability - for business.
    As we approach 2030 and with ten years to achieve the
    Global Goals set out by governments with business and other        In compiling this CEO Study, we are once again indebted to
    stakeholders, it is clear that we are not on track. At the same    the UN Global Compact study leads Dan Thomas and Sean
    time, business leaders told us that they face an ever more         Cruse. We also recognize the leadership of the Accenture
    competitive and challenging business environment and set           team, in particular, study leads Jessica Long and Jenna
    of pressures. From global trade uncertainties, to activist         Trescott, lead author Apurv Gupta, as well as Akshay
    investors, to the pace and scale of the technology revolutions     Raghunath. There have been many further contributions
    taking place in digital, biological and physical innovation, the   from colleagues too numerous to mention here, but without
    intensity is unlikely to change in the decade ahead.               whom our analysis would not be compelling – in particular,
                                                                       Justin Keeble, Harry Morrison, Melissa Barrett, Mauricio
    Against that backdrop, CEOs told us that they are making           Bermudez, Alexander Holst, Guanghai Li and Sundeep Singh.
    real progress, face growing expectations from consumers
    and employees, and are able to point to concrete innovative        On behalf of the United Nations Global Compact and
    business models, partnerships and technologies that                Accenture Strategy, we would like to express our sincere
    show it is possible to both drive competitiveness and              thanks to the CEOs and chairpersons, business leaders
    real measurable progress on environment, social and                and other stakeholders who participated in the study.
    governance issues.                                                 The project team has endeavoured to understand and
                                                                       interpret their many ideas, reflections and case study
    But, in the most powerful self assessment yet seen globally        examples in conducting the study and delivering
    from CEOs on the business contribution, this year’s study          this report.
    finds that CEOs believe that business is not doing enough
    and that in many cases their own companies and industries
    are not stepping up. Those same CEOs gave an equally stark
    call to action for business to step up or risk a lost decade
    ahead for the Global Goals without the urgent and required
    business contribution. In this report we share the feedback
    from CEOs on both their assessment of the challenge but
    also their suggestions for what needs to be done at all
    levels to get us back on track.

                                                                       Lise Kingo                   Peter Lacy
    The CEO Study follows two principal strands of research.           Executive Director and CEO   Senior Managing Director
    First, we conducted a quantitative assessment of more              UN Global Compact            Accenture Strategy

6                                                                                                             UN GLOBAL COMPACT CEO STUDY 2019 | 7
THE DECADE TO DELIVER - A CALL TO BUSINESS ACTION The United Nations Global Compact -Accenture Strategy CEO Study on Sustainability 2019
    We would like to thank the following CEOs, chairpersons and presidents for their insights in shaping this study.
    While the views expressed do not necessarily represent the totality of opinions received from all contributors,
    their participation and guidance have been critical.

    Jean-Paul Agon, Chairman          Clara Arpa, CEO, Arpa EMC              Douglas M. Baker, Jr. Chairman   Werner Baumann, Chairman       Jens Birgersson,                  Anders Danielsson, President   Patrick Decker, President and     Johan Dennelind, President         Joseph Dharmabrata, CEO,            Gaurav Dhawan, Executive
    and CEO, L’ORÉAL                                                         and CEO, Ecolab, Inc.            of the Board of Management,    President & CEO,                  and CEO, Skanska AB            Chief Executive, Xylem            and CEO, Telia Company             PT Trans Javagas Pipeline           Chairman, Phoenix Group
                                                                                                              Bayer AG                       ROCKWOOL International A/S

    Gizeshwork Tessema Bizachew,      Dominic Blakemore, Group Chief         Jean-François van Boxmeer,       Sigve Brekke, President &      Carlos Brito, CEO,                Marc Doyle, Chief Executive    Wiebe Draijer, Chairman of the    Joaquin Duato, Vice Chairman       Bob Dudley, CEO, BP                 Julie-May Ellingson, Chief
    CEO, Gize PLC                     Executive, Compass Group PLC           Chairman of the Executive        CEO, Telenor Group             Anheuser-Busch InBev              Officer, DuPont Company        Managing Board of Rabobank        of the Executive Committee,                                            Executive Officer, Cape Town
                                                                             Board and CEO, HEINEKEN                                                                                                                                            Johnson & Johnson                                                      International Convention Centre

    Jesper Brodin, CEO, Ingka Group   Martin Brudermüller, Chairman          Guenter Butschek, CEO and        Hans Van Bylen, CEO, Henkel    Giovanni Caforio, M.D. Chairman   João Paulo Ferreira, CEO,      Jim Fitterling, Chief             Laurent Freixe, Executive          Antoine Frérot, Chairman &          Gary Goldberg, Chief Executive
                                      of the Board of Executive Directors,   Managing Director,                                              and Chief Executive Officer,      Natura                         Executive Officer, Dow            Vice President, Chief Executive    Chief Executive Officer, Veolia     Officer, Newmont Goldcorp
                                      BASF SE and CTO                        Tata Motors Limited                                             Bristol-Myers Squibb                                                                               Officer, Zone Americas, Nestlé

    Steve Cahillane, Chairman and     Patrick Chalhoub,                      Brian Chambers, President &      Emanuel Chirico, Chairman      Michael Clarke, Chief Executive   Giles Gunesekera,              Magnus Hall, President and CEO,   Yoshihiro Hidaka, President, CEO   Christine Holgate, Group Chief      Frans van Houten, CEO &
    CEO, Kellogg Company              Chief Executive Officer,               Chief Executive Officer,         and Chief Executive Officer,   Officer, Treasury Wine Estates    Chief Executive Officer,       Vattenfall                        and Representative Director,       Executive Officer & Managing        Chairman, Royal Philips
                                      Chalhoub Group                         Owens Corning                    PVH Corp.                                                        Global Impact Initiative                                         Yamaha Motor Co., Ltd.             Director, Australia Post

    Bruce Cleaver, CEO,               Iain Conn, Group Chief Executive,      Mark J. Costa, Board Chair       David Craig, CEO, Refinitiv    Geoff Culbert, Chief Executive    Mark Hunter, President and     Peter Huntsman, Chairman,         J. Jon Imaz, CEO, Repsol           Sawsan Wazzan Jabri,                Jean-Sebastien Jacques,
    De Beers Group                    Centrica                               and CEO, Eastman                                                Officer, Sydney Airport           CEO, Molson Coors              President and CEO,                                                   General Manger and Co-owner,        Chief Executive, Rio Tinto
                                                                                                                                                                                                              Huntsman Corporation                                                 Nutrition and Diet Center

8                                                                                                                                                                                                                                                                                                                    UN GLOBAL COMPACT CEO STUDY 2019 | 9
THE DECADE TO DELIVER - A CALL TO BUSINESS ACTION The United Nations Global Compact -Accenture Strategy CEO Study on Sustainability 2019
Alan Jope, CEO, Unilever         Lars Fruergaard Jørgensen,        Ilham Kadri, CEO,                  Joe Kaeser, President and              Meshvara (Mei) Kanjaya, Chief    Marco Tronchetti Provera,          James Quincey, Chairman and     Noel Quinn, Group Chief             Grant F. Reid, CEO and President,     Alex Ricard, Chairman &
                                      President and CEO, Novo           Solvay Group                       Chief Executive Officer,               Executive Officer, PT. Supra     Executive Vice Chairman            CEO, The Coca-Cola Company      Executive, HSBC Holdings            Mars, Incorporated                    Chief Executive Officer,
                                      Nordisk A/S                                                          Siemens AG                             Boga Lestari Tbk.                and CEO, Pirelli                                                                                                                             Pernod Ricard

     Dave Lewis, Group Chief          Mark Little, President &          Susan Lloyd-Hurwitz, CEO           Juan R. Luciano, Chairman of the       Kristin Skogen Lund, CEO,        Mark Rigotti, Chief Executive      Chuck Robbins, Chairman         Eric Rondolat, CEO and              Simone Rossi, Chief Executive         Michael Roth, Chairman
     Executive, Tesco                 CEO, Suncor Energy                & Managing Director, Mirvac        Board of Directors, President & CEO,   Schibsted Media Group            Officer, Herbert Smith Freehills   and Chief Executive Officer,    Chairman of the Board of            Officer, EDF Energy                   and Chief Executive Officer,
                                                                                                           Archer Daniels Midland Company                                                                             Cisco                           Management, Signify                                                       Interpublic Group

     Denis Machuel, Chief Executive   Jørn Madsen, Chief Executive      Florence Sempebwa Makada,          Kawthar Makahlah, Founder              Stephen McCann, Group Chief      Eldar Sætre, President             Rolf Martin Schmitz, CEO,       Robert Scott, Managing Director,    Rob Shuter, Group President           Feike Sijbesma, CEO,
     Officer, Sodexo                  Officer, Maersk Drillling A/S     Managing Director, Motorcare       and CEO, BCI Group                     Executive Officer and Managing   and Chief Executive                RWE AG                          Wesfarmers Limited                  & CEO, MTN Group                      Royal DSM
                                                                        Uganda                                                                    Director, Lendlease Group        Officer, Equinor

     Florent Menegaux, CEO,           Masaki Miyauchi, Chairman and     Ian Moir, Group CEO,               Frans Muller, President &              Fernando Musa, CEO,              Praveen Singhavi, President,       Francesco Starace, CEO and      Mark Steinert, Managing             Fani Titi, Joint Chief Executive      Jean-Pascal Tricoire, Chairman
     Michelin                         CEO, Fuji Media Holdings, Inc.    Woolworths Holdings Limited        Chief Executive Officer, Royal         Braskem SA.                      APRIL Group                        General Manager, Enel S.p.A.    Director and Chief Executive        Officer, Investec Group               & Chief Executive Officer,
                                                                                                           Ahold Delhaize                                                                                                                             Officer, Stockland                                                        Schneider Electric

     T V Narendran, CEO & Managing    Soraya Narfeldt, CEO,             Peder Holk Nielsen, President      Rosamaría Lázaro Ordaz,                Peter Oswald, CEO, Mondi Group   Julia Tsetis, CEO, Tsetis Group    Mark Vergnano, President and    Rachel Watson, Chief Executive      Axel A. Weber, Chairman of            Sandra Wu, Wen-Hsiu,
     Director, Tata Steel Limited     RA International                  and CEO, Novozymes                 CEO, Lazzar                                                             of Companies (Uni-pharma SA,       CEO, The Chemours Company       Officer, PHPL and Chief Operating   the Board of Directors, UBS           Chairperson and CEO,
                                                                                                                                                                                   Intermed SA, Pharmabelle Ltd)                                      Officer, Corporate Office           Group AG                              Kokusai Kogyo Co., Ltd.

     Karl-Johan Persson, CEO,         John Pettigrew, Chief Executive   Goh Lin Piao, Managing Director,   Patrick Pouyanné, Chairman             Dave Powers, President and       Mick Wilkes, President & CEO,      Bill Winters, Group Chief       Mohammed Mahomedy,
     H&M Group                        Officer, National Grid plc        APP Sinar Mas                      of the Board and CEO, Total            CEO, Deckers Brands              OceanaGold Corporation             Executive, Standard Chartered   Acting Group Chief Executive,
                                                                                                                                                                                                                                                      Transnet SOC Ltd

10                                                                                                                                                                                                                                                                                                                            UN GLOBAL COMPACT CEO STUDY 2019 | 11
THE DECADE TO DELIVER - A CALL TO BUSINESS ACTION The United Nations Global Compact -Accenture Strategy CEO Study on Sustainability 2019
Business’ contribution to the Global Goals is not enough                                                                                                          These CEOs are calling for their sectors and peers to step up impact and to course-correct
                                                                                                                                                                  the private sector contribution to 2030’s targets, with three resounding calls to action:
This study is the fifth in a series                    IN 2016                                               IN 2019
conducted every three years that
dates back to 2007. In the 2016
study, CEOs told us the Global                         49% said business would be the                        48% are implementing sustainability                  CALL TO ACTION 1:                                              CALL TO ACTION 3:
Goals would provide a clear                            most important actor in the delivery                  into their operations according to the
framework for their companies                          of the Global Goals                                   UN Global Compact Progress Report                    Starting at home: raising ambition and impact                  Defining responsible leadership to pinpoint
to lead on the sustainable                                                                                                                                        in their own companies and for their industries                what is needed from this generation of leaders
development agenda.                                    78% saw opportunities to                              Only 21% feel business is currently
                                                       contribute to the Global Goals                        playing a critical role in contributing to           Successful delivery of the 2030 Agenda requires                CEOs point to nine emerging qualities of responsible
This year, the 2019 study finds                        through their core business                           the Global Goals                                     engagement from all businesses to:                             leadership that will enable business to be a leading
that CEOs believe that business
execution is not measuring up to                       90% said they were personally                         71% of CEOs believe that – with
                                                                                                                                                                                                                                 actor in driving the Global Goals
either the size of the challenge of                    committed to ensuring that their                      increased commitment and action
the Global Goals or their previous                     companies lead on the sustainable                     – business can play a critical role in                              Raise ambition through ‘threshold’
level of ambition.                                                                                                                                                               actions aligned with the 17 Global Goals
                                                       development agenda                                    contributing to the Global Goals                                                                                                 For their organizations and markets
                                                                                                                                                                                                                                              Pioneer systems change
                                                                                                                                                                                                                                              Drive sustainable market demand
                                                                                                                                                                                 Drive broader industry action by accelerating
                                                                                                                                                                                                                                              Build cultures of responsibility
                                                                                                                                                                                 market and systems transformation
                                                                                                                                                                                                                                              and sustainability

                                                          THE DECADE TO DELIVER
                                                                                                                                                                                                                                              Within their ecosystems
                CEOs call for bold action to accelerate the business contribution to the Global Goals                                                                            Adopt new technologies to accelerate                         Know the issues and engage in
                                                                                                                                                                                 impact on the Global Goals                                   science-based leadership

                                                                                                                                                                                                                                              Extend responsibility to ecosystems
                           Economics constraints and business pressures are stalling corporate action                                                                                                                                         and lift up industries
                                                                                                                                                                                                                                              Engage in non-competitive collaboration

         28%                                         43%                                55%                                     63%                               CALL TO ACTION 2:
                                                                                                                                                                  Changing how we collaborate with more honesty                               As individuals

      cite “absence of market                       of the world’s largest         say pressure to operate with           say political uncertainty across        about the challenges and real impact                                        Take sustainability personally
       pull” as a top barrier to                 companies cite competing          extreme cost-consciousness           markets is the most critical global                                                                                   Hold people to account and
     implementing sustainable                    strategic priorities as a top    against investing in longer-term    issue for their companies’ competitive                                                                                  meaningfully engage investors
              business                            barrier in implementing           strategic objectives is a key      strategies, and 42% say it is reducing     To accelerate broader action and systems
                                                        sustainability             trade-off that they are facing      or stalling their sustainability efforts   transformation, business leaders identify three                             Lead change with authenticity
                                                                                                                                                                  areas for collective action:

                                                                                                                                                                                 Shaping realistic, science-based solutions:
                                          CEOs say businesses should be making a far greater contribution                                                                        key actors must come together in honest
                                           to achieving a sustainable global economy and society by 2030                                                                         dialogue on the challenges and trade-offs

          63%                                       78%                                 76%                                     88%                                              Levelling the playing field: industry
                                                                                                                                                                                 leaders need to step up non-competitively
    see Fourth Industrial Revolution         of CEOs from both, Asian and North        say citizen trust will              believe our global economic                           in coordination and exchange
 (4IR) technologies — digital, physical        American businesses believe we         be critical to business               systems need to refocus
      and biological — as a critical         need to decouple economic growth        competitiveness in their                  on equitable growth
   accelerator of the socioeconomic           from the use of natural resources        industry in the next
       impact of their companies               and environmental degradation                 five years                                                                          Driving local action: businesses have to
                                                                                                                                                                                 elevate the role of local partnership moving
                                                                                                                                                                                 between global and local implementation
THE DECADE TO DELIVER - A CALL TO BUSINESS ACTION The United Nations Global Compact -Accenture Strategy CEO Study on Sustainability 2019
                                                                                                                                                      3.   A new definition and emphasis on disruptive responsible            to ensuring that their companies lead on the sustainable
                                                                                                                                                           leadership, as CEOs pinpoint what is needed from this              development agenda.
                                                                                                                                                           generation of leaders to drive action and impact.
                                                                                                                                                                                                                              Achieving systems transformation and collaboration in line
                                                                                                                                                                                                                              with the ambition of 2030, can only be achieved with a new lens
                                                                                                                                                      CALL TO ACTION 1:
                                                                                                                                                                                                                              for responsible leadership, in which leaders drive disruptive change
     REALITY CHECK:                                                        BEYOND INCREMENTALISM:                                                     RAISING ‘THRESHOLD’ AMBITION                                            within and beyond the four walls of the firm and broader ecosystems.
     BUSINESS CONTRIBUTION TO THE                                          A CALL FOR GREATER ACTION FROM                                             AND SYSTEMS TRANSFORMATION                                              Across our conversations, we found that CEOs identify nine emerging
     GLOBAL GOALS IS NOT ENOUGH                                            BUSINESS AND REAL SYSTEMS CHANGE                                                                                                                   qualities of responsible leaders toward 2030:
                                                                                                                                                      To achieve the Global Goals, CEOs say business leaders must
     Our 2016 CEO Study signalled a high point for business                While indicating a desire and willingness to do more, leaders              step up action not only for their own firms but, just as critically,    •    Pioneer systems change: Business leaders are increasingly
     commitment on sustainability. Seventy percent of CEOs                 say market constraints and an ever more challenging business               drive disruption of market systems.                                          taking commercial risks, including accepting the less
     believed the Global Goals – and their clear framework to              environment and set of pressures continue to slow broad-scale                                                                                           economical options in the short-term to propel the economics
     2030 - would help structure sustainability efforts for the            transition to sustainable business – and that unless broader               •    Leaders say that all businesses must raise ambition through             of sustainability forward through scale.
     private sector in partnership with other stakeholders, and            business is forced by a shift in economic incentives, action will stall.        ‘threshold’ actions aligned with the 17 Global Goals (see p.46).   •    Drive market demand for sustainability: CEOs
     nearly half (49%) of CEOs said business would be the most             In fact, one in three CEOs of the world’s largest companies cite “lack                                                                                  acknowledge consumers may not be willing to pay for the
                                                                                                                                                      •    CEOs are further stepping up to be a competitive force in
     important actor in the delivery of the Goals.                         of market pull” as a top barrier to sustainable business. Further,                                                                                      better solution but say industry leaders must proactively
                                                                                                                                                           accelerating market drivers – including via adopting new
                                                                           political uncertainty is reducing or stalling their sustainability                                                                                      drive sustainable behaviors and demand, making
                                                                                                                                                           technologies and engaging customers and consumers in
     In 2016, CEOs saw a clear opportunity to recalibrate their efforts    efforts for 42% of CEOs while a third (34%) specify market closures                                                                                     sustainability accessible for all.
                                                                                                                                                           sustainable business models – for their broader sectors:
     in line with global milestones for sustainable development.           and limitations on free trade as hindrances. Over half (55%) of
                                                                                                                                                           54% of CEOs say environmental degradation is increasing
     Seventy-eight percent saw opportunities to contribute to the          CEOs say that they are facing a key trade-off: pressure to operate                                                                                 •    Build cultures of responsibility and sustainability:
                                                                                                                                                           their sustainability efforts.
     Goals through their core business. We heard numerous examples         under extreme cost-consciousness versus investing in longer-term                                                                                        Leaders should act as catalysts to set expectations and
     of how they are creating genuine value and advantage as they go       strategic objectives which are at the heart of sustainability.                                                                                          embed purpose-driven mindsets through their strategy,
                                                                                                                                                      CALL TO ACTION 2:                                                            organization and people.
     about it - through new markets, products and services, resource
     productivity and efficiency, or the engagement and motivation of      Not content with that status quo, CEOs agree the business                  COLLABORATING TO SHAPE REALISTIC,                                       •    Know the issues and engage in science-based leadership:
     key stakeholders from employees to communities to consumers.          community could and should be making a far greater contribution to         SCIENCE-BASED SOLUTIONS                                                      Business leaders will increasingly need to “get the issues”
                                                                           achieving a sustainable global economy and societies by 2030. In the                                                                                    and engage with broader stakeholders in shaping and driving
     That followed ten years of growing commitment, belief and             context of the pace and scale of change in the global economy across       For CEOs, the kind of systems transformation required is                     adoption of science-based solutions.
     action from CEOs: In our 2010 CEO Study, 93% of executives            areas like digital and biological technologies, coupled with a sense       beyond the scope of any one company or industry. New forms
                                                                           of global instability on issues like global trade and populism, CEOs       of collaboration are essential to driving broad-scale action:           •    Extend responsibility to ecosystems: It is no longer
     told us sustainability was critical to their future success.
                                                                           see a clearer need for business action than ever before: 63%                                                                                            enough to lead within the firm and CEOs see a growing need
     That number has grown over the years, especially for the
                                                                           see Fourth Industrial Revolution (4IR) technologies as a critical          •    Shaping realistic, collective solutions: key actors must come           to be “end responsible”, extend responsibility to suppliers
     world’s largest companies, where it hovers at nearly 100%.
                                                                           accelerator of the socioeconomic impact of their companies,                     together in honest dialogue on the challenges and trade-offs,           and ecosystems beyond their direct control, and lift up their
                                                                           and 88% of CEOs believe our global economic systems need to                     particularly business and government, to create the right               industries through sharing of best practice.
     For CEOs, in 2019 as in 2016, that commitment has never
     wavered. These leaders are stepping up to drive results through       refocus on equitable growth. Further, 65% overall – and more                    market conditions.                                                 •    Collaborate non-competitively: To be successful, business
     core business and embrace market opportunities for business           than three-quarters of CEOs from Asian and North American                                                                                               leaders will need to engage in non-competitive partnership
                                                                                                                                                      •    Levelling the playing field: in some cases, even where the right
     advantage. In fact, just 26% of CEOs in 2019 cited “no clear link     businesses – believe we need to decouple economic growth from                                                                                           and strategic alliances as they have not in the past — changing
                                                                                                                                                           policy framework is not forthcoming, industry leaders need to
     to business value” as a barrier to sustainability compared to         the use of natural resources and environmental degradation.                                                                                             the mindset to have “win-win” collaboration within and
                                                                                                                                                           step up non-competitively in coordination and exchange.
     31% in 2016 and 37% in 2013. In addition, 40% of CEOs we surveyed                                                                                                                                                             beyond their industries.
     in 2019 say sustainability is driving revenue growth and 35%          CEOs we spoke to hold firm to the idea that business can, and              •    Driving localized action and results: businesses have
                                                                                                                                                           to elevate the role of effective, local partnership moving         •    Take sustainability personally: Personal motivation
     are realizing value through cost reduction today. Leaders say an      must, renew and double down on commitment and action to
                                                                                                                                                           seamlessly between global and local.                                    continues to rise as a driver of sustainability, and our
     unprecedented shift in public expectations is driving them to get     make a significant impact on the Goals. Promisingly, over two-
                                                                                                                                                                                                                                   research shows that leaders who are genuine in their
     ahead on sustainability to build trust and competitiveness in their   thirds (71%) of CEOs in 2019 believe that business can play
                                                                                                                                                                                                                                   concerns for society and the planet are most effective
     markets: 76% of CEOs say citizen trust will be critical to business   a critical role in contributing to the Goals.                              Across our conversations, CEOs emphasize the role of
                                                                                                                                                                                                                                   in driving sustainability and business performance.
     competitiveness in their industry in the next five years.                                                                                        the United Nations and UN Global Compact in facilitating
                                                                           For the first time, leaders in 2019 are calling for their sectors          collaboration and concrete action at scale, by: bringing                •    Hold organizations to account and engage investors:
     While the CEOs we spoke to are making real progress and driving       and peers to step up action and course-correct the private sector          actors together in dialogue on solutions; shaping and                        For global CEOs, responsible leadership means personally
     both business and sustainability impact, the CEOs themselves          contribution to the Global Goals. To accelerate progress, CEOs             advocating consistent standards; and building bridges                        “walking the talk”, holding their organizations financially
     told us that their industries and business as a whole are not         identify three critical requirements:                                      between business, national and local governments.                            accountable for sustainability, and meaningfully engaging
     doing enough. Those same leaders agree that for the majority of                                                                                                                                                               investors on its value to business.
     businesses, awareness and commitment is not driving the level         1.   An urgent need to raise corporate ambition within their own           CALL TO ACTION 3:                                                       •    Lead change with authenticity: Perhaps most cited by
     of urgency and concrete action required. They recognize –                  organizations through ‘threshold’ actions and also                    DEFINING RESPONSIBLE                                                         leaders across our conversations, CEOs emphasize future
     according to the numbers – that even their own businesses are              lead systems transformation more broadly against the
                                                                                                                                                      LEADERSHIP FOR 2030                                                          leaders will need to define a sense of authenticity and
     not doing enough. The 2019 UN Global Compact Progress Report               17 Global Goals, mindful that not all Goals will apply to all
                                                                                                                                                                                                                                   vulnerability to effectively embrace a growth mindset
     showed that 48% of companies are implementing sustainability               businesses in the same way.                                           This year, we observe a clear shift in CEOs’ views as they identify          and engage in constructive collaboration.
     into operations. In 2019, just 21% of CEOs believe business is                                                                                   a growing imperative to look beyond near-term profits and embrace
     playing a critical role in contributing to the Goals.                 2.   The need for business, governments, regulators and                    their role as change agents to meaningfully drive forward the Global
                                                                                nongovernmental organizations to come together to shape               Goals. Fully 95% of CEOs say they are personally committed
                                                                                realistic, science-based solutions to the global challenges.

14                                                                                                                                                                                                                                                                     UN GLOBAL COMPACT CEO STUDY 2019 | 15
THE DECADE TO DELIVER - A CALL TO BUSINESS ACTION The United Nations Global Compact -Accenture Strategy CEO Study on Sustainability 2019
     TO 2030

     “It is abundantly clear that a much
     deeper, faster and more ambitious
     response is needed to unleash the
     social and economic transformation
     needed to achieve our 2030 goals.”
     António Guterres, Secretary-General, United Nations
16                                                         UN GLOBAL COMPACT CEO STUDY 2019 | 17
THE DECADE TO DELIVER - A CALL TO BUSINESS ACTION The United Nations Global Compact -Accenture Strategy CEO Study on Sustainability 2019
AS WE APPROACH 2020                                           GEOPOLITICAL,
     AND TEN YEARS TO                                              TECHNOLOGICAL AND
     ACHIEVE THE GLOBAL                                            SOCIOECONOMIC FACTORS
     GOALS, IT IS CLEAR THAT                                       CLOUD 2030 OUTLOOK
     WE ARE NOT ON TRACK                                           Amid a growing urgency to unlock action at an unprecedented
                                                                   scale toward 2030, business leaders told us that they face an
     The global community witnessed a high point in 2015           ever more competitive and challenging business environment
     as leaders around the world unanimously adopted the           and set of pressures, and the intensity is unlikely to change in
     landmark Paris Agreement and crafted the 2030 Agenda          the decade ahead.
     for Sustainable Development. The creation of the 2030
     Agenda is a testament to our united ability to develop        Geopolitically, fragmentation and volatility have led                “Uncertainty and volatility are the areas
     the boldest of agendas. Similarly, the Paris Agreement        to political and economic uncertainty. The retreat from              where we are facing the most challenge.
     is hailed as one of the world’s greatest diplomatic           globalization and the concentration on domestic rather               Uncertainty is significant and is
     successes. Signed by 195 member states, it negotiated a       than international markets could shrink economies, spike             creating more volatility.”
     common front against greenhouse gas emissions (GHG),          unemployment and enhance protectionist barriers. UN
     with the goal to hold global average temperatures to well     Secretary-General António Guterres termed these conditions           Emanuel Chirico, Chairman and
     below 2 degrees Celsius above pre-industrial levels.          a “trust deficit disorder” plaguing the world as he addressed        Chief Executive Officer, PVH Corp.
                                                                   the 73rd United Nations General Assembly in 2018.
     In the four years since, there have been bright spots of
     progress: the global population live better lives than
     they did a decade ago, infant mortality under the age of      Socioeconomically, structural trends are driving greater             “We face exceptional challenges across
     five has declined from 77 to 39 per 1,000 births since        environmental stress and social inequality. According to             many fronts; climate change, resource
     2000-17.1 However, in a number of areas, advancement          the United Nations, the global population will reach 9.7             scarcity and growing inequality, just
     towards the Global Goals has been slow or even                billion by 2050 and the middle class is expected to grow to          to mention a few. As a multinational
     reversed. Today, more than 700 million people continue        5.3 billion by 2030.7 To accommodate the impact of these             company we have a big responsibility –
     to live in extreme poverty2; over 170 million remain          shifts — and increasing demand for resource-intensive goods,         and an opportunity – to make a positive
     jobless3; and more than 70 million people seek refuge.4                                                                            difference on climate change.”
                                                                   such as protein consumption, housing and mobility — the
     Famine, extreme climate events, overpopulation, water         global economy needs to be re-engineered in a manner that
     scarcity, gender-based violence and a rise in violent                                                                              Jesper Brodin, CEO, Ingka Group
                                                                   decouples it from resource use.
     extremism and armed conflict continue to define lives
     around the world. The most vulnerable people and
     countries continue to suffer the most, and the global         Technologically, the world is entering the Fourth
     response has not been ambitious enough.                       Industrial Revolution (4IR), and the pace and scale of               “The technological revolution is a
                                                                   digital, biological and physical innovation could accelerate         unique opportunity, but one cannot
     A plethora of recently published scientific studies           our problems – or if deployed in a connected way and with            ignore the issue of accessibility.
     highlights the implications of inaction. In October 2018,     the right business investment and policy frameworks –                The gap between those who are
     the Intergovernmental Panel on Climate Change (IPCC),         technology breakthroughs could be the key to achieving               qualified and those who are not may
     warned that unless the world heeds the commitment             the Global Goals.                                                    lead to unprecedented crisis.
     set in Paris, even half a degree rise in global temperature                                                                        Reducing this divide and making
     would significantly worsen the risks of drought, floods,                                                                           technology accessible to everyone
     extreme heat and poverty for millions.5 To avoid that                                                                              must be a shared ambition for public
     scenario, GHG emissions must be slashed by 45% by                                                                                  and private organizations.”
     2030 and carbon neutrality achieved by 2050. Crucial
                                                                                                                                         Florent Menegaux, CEO, Michelin
     action is needed, too, to reverse land degradation to avert
     the sixth mass species extinction in history and halt the
                                                                   The global community is at an inflection point in balancing
     approximately eight million tons of plastic litter that                                                                          1. World Bank Database, Mortality Rate under-5
                                                                   these geopolitical, technological and sustainable                  2. United Nations (2019), Goal 1: No Poverty
     enters oceans.6 This warning was raised by the United
                                                                   development challenges on the road to 2030.                        3. ILO (2019), World Employment and Social Outlook 2019
     Nations Environment Programme (UNEP) in its sixth                                                                                4. United Nations (2018), Refugees
                                                                   The opportunity is there. But real change is needed.               5. IPCC (2018), Global Warming of 1.5 C Special Report
     Global Environment Outlook (GEO-6) in March 2019.                                                                                6. UNEP (2019), Global Environmental Outlook 6
                                                                                                                                      7. WEF (2018), Global Gender Gap Report 2018

18                                                                                                                                                                           UN GLOBAL COMPACT CEO STUDY 2019 | 19

                      of CEOs believe
                      business is
                      currently playing
                      a critical role in
                      contributing to
                      the Global Goals

20                               UN GLOBAL COMPACT CEO STUDY 2019 | 21

     BUSINESS CONTRIBUTION TO                                                   compared with 97% in 2016. While the overall drop is largely       FIGURE 1:

                                                                                driven by small and medium-size enterprises, 63% of which
     THE GLOBAL GOALS IS NOT                                                    cite lack of financial resources as the main impediment,
     ENOUGH, SAY CEOS                                                           nearly all (99%) of the CEOs of the world’s largest companies
                                                                                say sustainability issues are important to the future
     In the 2016 study, business leaders’ attitudes toward                      success of their businesses. Over the past six years, we have      OF CEOS FROM COMPANIES
                                                                                observed an uplift in importance in North American and             WITH MORE THAN $1 BILLION IN                                          6%
     sustainability reached a peak as CEOs saw a window of
                                                                                Asian companies: In 2019, 68% of CEOs of North American            ANNUAL REVENUES BELIEVE                               32%
     opportunity to recalibrate their sustainability efforts in line
                                                                                businesses rank sustainability as “very important”, up from        SUSTAINABILITY WILL BE
     with global milestones. Seventy percent of CEOs believed the
                                                                                57% in 2013. Similarly, the same numbers for business
                                                                                                                                                   IMPORTANT TO THE FUTURE                                                    2%
     Global Goals would provide a clear framework to structure                                                                                     SUCCESS OF THEIR BUSINESS
     sustainability efforts, and 90% told us they were personally               leaders from Asian companies increased from 52% in 2013
     committed to ensuring that their companies lead on the                     to 63% in 2019.
     sustainable development agenda. Our conversations with                                                                                                                                                        40%
     CEOs reflected a broader commitment from the business                      Sustainability continues to become embedded in overall
     community to sustainable development alongside national                    corporate strategy, and in our one-to-one conversations, it
     governments and international institutions to achieve our                  is clear that CEOs that are serious about sustainability have
     shared vision to 2030.                                                     brought it into the mainstream of their businesses. According
                                                                                                                                                   How important are sustainability
                                                                                to Axel A. Weber, Chairman of the Board of Directors of UBS                                                                                                    67%
                                                                                                                                                   issues to the future success of
     In stark contrast to these views, in 2019, business as a whole             Group AG, “You must be operating sustainably in all parts of
                                                                                                                                                   your business?
     is not playing a leading role in advancing the Global Goals.               your organization before you can become a credible player in
                                                                                                                                                                                                                                                         $1 BN

     48% are implementing sustainability into operations.                       OPPORTUNITIES TO DRIVE
                                                                                CORE BUSINESS
     This contrast is worth examining, and in the following pages
     we explore the reflections from CEOs on the reasons for this               This group of CEOs believe there is real opportunity for
     apparent crisis of broad-scale commitment and action across                growth, efficiency, reputation and innovation.
     business as a whole.                                                                                                                          FIGURE 2: CEOS INABILITY TO LINK SUSTAINABILITY TO
                                                                                                                                                   BUSINESS VALUE HAS CONSISTENTLY FALLEN SINCE 2013
                                                                                For business leaders, linking business value to sustainability
                                                                                has improved, and companies that are ahead drive improved
     UNDERSTANDING THE SCOPE OF SUSTAINABILITY:                                                                                                    Which barriers keep you, as CEO, from implementing an integrated                NO CLEAR LINK TO BUSINESS VALUE
                                                                                results in their core business. The percentage of CEOs citing
     Throughout this report, we use the term “sustainability” to encompass                                                                         and strategic company-wide approach to sustainability issues?                   LACK OF KNOWLEDGE
                                                                                “no clear link to business value” as a barrier to sustainability
     environmental, social and corporate governance issues as covered by the
     UN Global Compact’s Ten Principles and by the United Nations Sustainable
                                                                                has consistently dropped: from 37% in 2013 to 31% in 2016 to
     Development Goals (SDGs), also referred to as the Global Goals for         26% in 2019. Unilever’s Sustainable Living Brands, for instance,               37%
     Sustainable Development.                                                   are delivering 75% of the company’s growth.8 Alan Jope, CEO
                                                                                of Unilever, commented, “Purposeful brands consistently
                                                                                outperform other brands; they are both faster growing and                                                                    31%
     SUSTAINABILITY CONTINUES                                                   more profitable.” In another example, Feike Sijbesma, CEO of
                                                                                Royal DSM, notes that it has been a journey for the company
     TO MOVE HIGHER ON THE                                                      to build a profitable sustainable product portfolio: “About
     AGENDA, WITH GROWING                                                       12 years ago, several people thought sustainability would
     COMMITMENT, BELIEF AND                                                     cost money and was nice to do. Now, 12 years later, our value
                                                                                creation, also financially and for shareholders have proved
     ACTION FROM CEOS                                                           that sustainability, creating value for our society and planet
                                                                                can go hand-in-hand with business successes.”
     Despite the lack of sufficient progress, companies at the
     forefront are galvanized around sustainability and intent                  CEOs recognize that sustainability can drive competitive
     on transforming their companies. The importance of                         advantage. Forty percent are seeing business value through
     sustainability to core business is stronger than ever for large,           revenue growth, 37% through risk mitigation and 25%
     global companies. In 2019, 94% of CEOs say sustainability                  through cost reduction today. We heard numerous examples
                                                                                                                                                               2013                                         2016                              2019
     issues are important to the future success of their business,              of how CEOs are creating genuine value and advantage, such

22                                                                                                                                                                                                                                    UN GLOBAL COMPACT CEO STUDY 2019 | 23
as through new markets, products and services, resource            evolving, often in alignment with the Global Goals.                        FIGURE 3: CONSUMERS, EMPLOYEES RECOGNIZED                                              Over the next 5 years, which stakeholder groups do
     productivity and efficiency. In South Africa, for instance,        Denis Machuel, Chief Executive Officer of Sodexo, told us,                 AS KEY TO HOW CEOS MANAGE MANAGE                                                       you believe will have the greatest impact on the way
                                                                                                                                                   SUSTAINABILITY GOING FORWARD
     Woolworths Holdings Limited worked with their food                 “We are a serving a variety of populations, and the voice of the                                                                                                  you manage sustainability?
     manufacturers to introduce soil management practices that          consumer has tremendously evolved in line with the 17 UN
     reduced water requirements and increased control over              SDGs and the expectations of new generations, will force a
     waste.9 As a result, their suppliers were able to continue         shift in the way business operates – it is a very positive trend.”           CONSUMERS                                             GOVERNMENTS                                           SUPPLIERS                         BOARDS
                                                                                                                                                     53%                                                   41%                                                   25%                               23%
     growing produce varietals in a period when others were not.
     It helped the business expand and take market share while          The consequences of inaction is also a strong driver for
     also enhancing national food access in a period of drought.        business leaders to ramp up their efforts; license to operate
                                                                        and reputation are at risk if they don’t. As one CEO told us,
     Overall, direct to consumer (D2C) companies anticipate             “Consumers quickly lose patience and can easily turn into
     sustainability delivering greater value compared with              protestors.” Among CEOs interviewed, sustainability is
     business to business (B2B) companies: 58% of CEOs from             nonnegotiable. In the words of Natura’s CEO João Paulo
     D2C companies think sustainability will drive revenue growth       Ferreira, “There is no doubt sustainability has become a                                                                           REGULATORS
     overthe next five to ten years, compared to 53% of CEOs            must-have. Consumers are aware of global issues in a way                                                                                                                                 INVESTMENT
     from B2B companies. Yet our conversations reveal that              they were not five years ago…If at any point, consumers learn
     sustainability demands on B2B companies will intensify,            that a company or brand cannot be trusted, those brands will                 44%

     as interest in sustainability makes its way upstream in the        be heavily damaged.”
     value chain. In the oil and gas industry, Bob Dudley, CEO of BP,
     observes, “There is more interest among B2B customers in           Calls for companies to be bolder and more ambitious                                                                                COMMUNITIES
     environmentally sustainable products even if they have to pay      on sustainability are coming from a widening range of                                                                                                                                    MEDIA                             OTHER 5%             ORG
     a premium - this is a new and interesting development.” In the     stakeholders. Employees, for instance, are now an important                                                                                                                                                                LENDERS,
     construction industry, Anders Danielsson, President and CEO        influencer. In our one-to-one conversations, CEOs especially                                                                                                                                                               INSURERS &
     of Skanska AB, told us, “A large part of our revenue comes from    emphasized the role of younger generations in holding their                                                                                                                                                                4%                   NONE

     green projects – almost half of our construction revenue.”         employers to higher standards and demanding purpose-driven
                                                                        careers. Sustainability has become a key driver of recruitment
     GROWING EXPECTATIONS ARE                                           and retention, especially with younger generations. According
                                                                        to T V Narendran, CEO & Managing Director of Tata Steel
     INCREASING OPPORTUNITIES                                           Limited, “Young people are looking at a company’s approach
     FOR BUSINESS ADVANTAGE                                             to sustainability while deciding on which companies to work               FIGURE 4: WHILE CONSUMERS CONTINUE TO DRIVE
                                                                                                                                                  SUSTAINABILITY EFFORTS FOR D2C INDUSTRIES,
                                                                                                                                                                                                                                         Over the next 5 years, which stakeholder groups do you
                                                                        for.” In the words of Patrick Decker, President and Chief                                                                                                        believe will have the greatest impact on the way you
                                                                                                                                                  EMPLOYEES, REGULATORS AND GOVERNMENTS ARE A
     Rapidly increasing stakeholder expectations are driving            Executive of Xylem, “The younger generation is drawn to                                                                                                          manage sustainability?
                                                                                                                                                  MATERIAL FORCE FOR CHANGE AS WELL
     business leaders to be more proactive on the sustainability        higher purpose and mission – ‘why are we doing this?’ It’s not
     agenda, and move ahead even if the market lags behind. Over        purely the profit motive.”
                                                                                                                                                                 Consumers                     53%                         Consumers                           70%                        Consumers                                 79%

     the past few years, business leaders across industries have                                                                                                 Suppliers
                                                                                                                                                                                                                 FOOD &    Governments
                                                                                                                                                                                                                                                                         PERSONAL &
                                                                                                                                                                                                                                                                         HOUSEHOLD        Employees
     seen a tremendous increase in the level of public awareness        Leaders see a compelling argument to raise their ambition                   & PARTS      Communities

     and engagement on social and environmental issues.                 and drive sustainable growth for the planet, people and                                  Governments                                               Consumers                     62%                              Consumers                55%
                                                                        profits. Alex Ricard, Chairman & Chief Executive Officer of                              Regulators                   50%                          Boards
                                                                                                                                                                                                                                                                                 REAL     Employees                55%
                                                                                                                                                                                                                HEALTH                                                         ESTATE
     Consumers and employees are among the top stakeholders,            Pernod Ricard, told us, “As CEO, I need to recognize where                    BANKS      Boards                       50%                 CARE     Employees                                                      Governments

     53% and 44%, respectively, that CEOs recognize will be most        consumers want us in ten years, and make those decisions                                 Governments                                               Regulators                                                     Consumers                       67%

     influential in how they manage sustainability over the next five   today...I believe businesses that are only targeting profits,                            Governments            44%                                Consumers               54%                                    Employees
                                                                                                                                                                                                             INDUSTRIAL                                                         RETAIL
     years. Consumers are holding companies to higher standards.        will die. Only those targeting all stakeholders will remain                              Consumers                                      GOODS &    Employees                                                      Regulators
     For Mark Hunter, President and CEO of Molson Coors, “Our           profitable in the future.” Speaking on growing sustainability                  BASIC
                                                                                                                                                                 Communities                                               Governments                                                    Governments

     consumers and our customers are looking for assurances             trends, Marco Tronchetti Provera, Executive Vice Chairman                                Regulators                                                Regulators                60%                                  Employees                     61%

     that we are doing business the right way. It’s becoming table      and CEO of one of the largest tire manufacturers, Pirelli, said “It                      Investment Community                         INSURANCE    Consumers                                     TECHNOLOGY       Consumers

     stakes and that creates a healthy tension, where we are trying     [sustainable mobility] provides a competitive edge – we and                              Consumers                           58%                   Investment Community                                           Governments

     to get ahead of their requirements, and they are holding us        our competitors are all moving in the same direction.”                    CHEMICALS      Regulators                                                Consumers               57%
                                                                                                                                                                                                                                                                                          Consumers                           70%

                                                                                                                                                                 Boards                                           MEDIA    Employees               57%                                    Governments
     to account.” Looking across industries, predominantly D2C                                                                                                   Employees                     52%                         Communities                                                    Employees
                                                                        8. Unilever (2019) Sustainable Living Brands
     businesses, such as retail and personal and household goods,       9. Woolworths Holdings, Farming For the Future
                                                                                                                                              CONSTRUCTION &     Consumers                                                 Communities                         71%                        Governments             53%
     are mostly driven by consumers; however, leaders of B2B                                                                                                     Governments                                               Governments
                                                                                                                                                                                                                                                                              TRAVEL &
                                                                                                                                                                                                               OIL & GAS
     companies also observe growing pressures. For instance,                                                                                                     Employees                     52%                         Regulators                                                     Consumers

     French food services company, Sodexo, notes that the voice                                                                                    FINANCIAL
                                                                                                                                                                 Consumers                                                 Boards                                                         Consumers               52%

     of the consumers it serves – whether a hospital patient, a                                                                                                  Governments                                               Governments                                        UTILITIES   Employees

     university student, or an employee in the workplace– is rapidly                                                                                                                                                                                                                      Regulators

24                                                                                                                                                                                                                                                                                         UN GLOBAL COMPACT CEO STUDY 2019 | 25
     As expectations continue to rise, CEOs see a renewed
     imperative to ensure that their companies contribute
     positively to the communities in which they operate. Trust has               FIGURE 5: 76% OF CEOS SAY TRUST WILL
                                                                                  BE CRITICAL TO COMPETITIVENESS IN
     become critical to remaining competitive. More than three-
                                                                                  THE NEXT FIVE YEARS
     fourths (76%) of CEOs say citizen trust will be critical to their
     businesses, and almost half say it is fueling their enhanced
     sustainability efforts.                                                       To what extent do you agree with the following statements
                                                                                   on globalization, Fourth Industrial Revolution technologies
                                                                                   and sustainable development?​

       “Trust is such an important element                                        Citizen trust will be critical to business competitiveness
                                                                                  in my industry in the next five years                           “There is no difference between our
       in everything, and it is being broken                                                                                                      business strategy and our sustainability
       down everywhere.”                                                             Strongly agree               6%                              strategy…they are totally integrated.”

       Kristin Skogen Lund,                                                          Neutral                                                      Alan Jope, CEO, Unilever
       CEO, Schibsted Media Group
                                                                                                      18%                                         “The millennials and the younger
                                                                                                                                                  generation are adamant; they are
     To build trust, companies are looking to better articulate and                                                                    37%        true believers in Sustainability.”
     embed their societal purpose. The CEO of a 100-plus-year-old
     Fortune 500 brand, for instance, spoke of how the increasing                                                                                 Patrick Chalhoub, Chief Executive
     pressure to define its value to society — primarily from young                                                                               Officer, Chalhoub Group
     employees — spurred a bottom-up process to refresh the
     company’s central purpose. Drawing inspiration from the
                                                                                                                                                  “The time will come when there will be
     17 Global Goals, the company curated a framework that
                                                                                                                                                  a threshold question that consumers
     redefined a shared vision and strategic direction for the brand.
                                                                                                                                                  will ask which is ‘can I trust this brand?’,
     Higher standards of transparency further compel companies                                                                                    and if the answer is ‘no’ they won’t
     to self-regulate their actions to remain resilient to trust                                                                                  buy anything. It will become a binary
     failures. According to Yoshihiro Hidaka, President, Chief                                                                                    question.”
                                                                           One common theme we have heard from CEOs this year is
     Executive Officer and Representative Director of Yamaha
                                                                           the re-emphasis on “license to operate” or rather “license
     Motor Co., Ltd : “Unless a company discloses its sustainability                                                                              Bruce Cleaver, CEO, De Beers Group
                                                                           to compete and partner,” with a growing importance on
     initiatives and corporate value, the stock price will be affected.”
                                                                           the need for companies to be welcomed by communities
                                                                           where they operate. In the words of Stephen McCann, Group              “Our consumers want to engage with
     Citizen trust is especially critical for CEOs from the
                                                                           Chief Executive Officer and Managing Director of Lendlease             brands they trust. In some cases, in
     telecommunications, insurance and banking sectors,                                                                                           order to honor that trust, you need to
                                                                           Group, “Governments grant permits, but communities grant
     reflecting recent scandals and data breaches: upwards of                                                                                     be willing to raise the bar or take a
                                                                           permission.” Amazon’s pull out from its plan to build its HQ2
     90% of CEOs from those industries say trust will be critical                                                                                 stand, regardless of what the market
                                                                           campus in Queens, New York, following community backlash is
     to their businesses, especially given companies’ delayed
                                                                           just one example of the rising power of the voice of local citizens.
                                                                                                                                                  is saying.”
     or inadequate responses to these types of failures reduce
     trust for the whole industry. While D2C industries that are                                                                                  Emanuel Chirico, Chairman and
     closest to the consumer emphasize the importance of trust,              “We get a license from society to operate.                           Chief Executive Officer, PVH Corp.
     we also observe the value of trust for B2B business leaders             There are plenty of ways that society can be
     in other areas of sustainability. For example, 79% of CEOs              punishing. We can’t take that for granted - we                       “I believe businesses that are only
     in the chemical industry say trust on these issues will drive           have to continually earn the public’s trust.”                        targeting profits, will die. Only those
     competitiveness in the industry. According to Eldar Sætre,                                                                                   targeting all stakeholders will remain
     CEO of energy company Equinor: “Trust is now a critical                                                                                      profitable in the future.”
                                                                             Douglas M. Baker Jr., Chairman
     issue. It determines your relationship with society.”
                                                                             and CEO, Ecolab, Inc.                                                Alex Ricard, Chairman & Chief
                                                                                                                                                  Executive Officer, Pernod Ricard

26                                                                                                                                                                      UN GLOBAL COMPACT CEO STUDY 2019 | 27
SUSTAINABLE DEVELOPMENT AT                                                                                                                                        FIGURE 6: WHILE DIGITAL DOMINATES BUSINESS INVESTMENTS OVERALL, INVESTMENTS IN
                                                                                                                                                                       PHYSICAL AND BIOLOGICAL TECHNOLOGIES VARY ACROSS INDUSTRIES

                                                                                                                                                                       Which technologies are you investing in today to tackle sustainability challenges?                                                                                                                         BIOLOGICAL

                                                                                                                                                                           Automobiles & Parts                                         38%                                                                                             55%                                                                8%

                                                                                                                                                                                         Banks                                                                                      80%                                                                                               15%                  5%

                                                                                                                                                                               Basic Resources                                         38%                                                                                      47%                                                              15%

                                                                                                                                                                                     Chemicals                       17%                                                                    54%                                                                                   29%

                                                                                                                                                                       Construction & Materials
     The Fourth Industrial Revolution (4IR)* brings an array of                markets don’t get themselves organized, they will be on the wrong                                                                                                     52%                                                                                            40%                                                8%

     innovations, across the digital, physical, and biological worlds.         side of history in a world of automation, AI and machine learning.”                            Financial Services                                                                            73%                                                                                             20%                           6%

     From electric mobility to product traceability to cellular and            These downside risks warrant greater focus on lifelong learning,                                Food & Beverage                                           42%                                                                                   37%                                                         22%

     tissue engineering, technologies are sparking transformational            and CEOs note the important role for business. As Frans van Houten,                                  Health Care                                                           55%                                                                               24%                                            21%
     change across global value chains, unlocking value while delivering       CEO & Chairman of Royal Philips told us, “The future of work will have                Industrial Goods & Services                                                                    65%                                                                                            30%                                     5%
     outcomes for sustainable development. Water technology                    a major impact on the global population. As we live longer, we’ll need                                 Insurance                                                                                                       96%                                                                                                      4%
     company Xylem, for example, developed a digital twin of the               to work longer. Providing people with lifelong learning and the skills                                     Media                                                                             73%                                                                                                   26%
     city of South Bend, Indiana’s sewer system and used artificial            required to adapt to technological change must become the norm. I
                                                                                                                                                                                       Oil & Gas                                             43%                                                                                 39%                                                          18%
     intelligence (AI) to analyze and optimize storm water surges to           don’t think society is ready for this yet...Companies and employers
                                                                                                                                                                    Personal & Household Goods                                                     50%                                                                                       36%                                                 14%
     avoid overflows that pollute local waterways – preventing more            have a responsibility to support continuous education. We have a
                                                                                                                                                                                    Real Estate
     than 1 billion gallons of storm and sewer water from entering the         clear view of the skills and capabilities required to be competitive                                                                                                               62%                                                                                            33%                                       5%

     St. Joseph River every year. This is expected to help the city reduce     and can plan for the future.”                                                                              Retail                                                                        69%                                                                                            24%                                7%

     its construction budget by $500 million that would have otherwise                                                                                                              Technology                                                                                                 89%                                                                                                  10%

     been needed to build more underground tunnels to hold excess              The majority of CEOs believe technology breakthroughs are the                               Telecommunications                                                                                                        94%                                                                                                  6%

     storm water, conserving energy and lessening human impact on              key to achieving the Global Goals                                                                Travel & Leisure                                                                  62%                                                                              17%                                     21%
     the environment.                                                                                                                                                                   Utilities                                                    53%                                                                                             39%                                                  8%
                                                                               “The data will tell you it’s all too late, but that’s because that data
     According to our survey,there is already significant investment in        does not take into account exponential improvement in technology,”
     digital technologies to drive sustainability outcomes: 75% of CEOs        remarks Stephen McCann, Group Chief Executive Officer and
     say they are investing in digital to address sustainability challenges.   Managing Director of Lendlease Group. This broadly captures the
     There is also opportunity to further unlock the combinatorial effects     sentiment of CEOs as 63% see 4IR technologies as a critical factor
     of biological and physical innovation: for instance, 51% of CEOs say      for accelerating the socio-economic impact of their company. Across                     FIGURE 7: THE INVESTMENT GAP BETWEEN TECHNOLOGIES CEOS SAY WILL BE MOST TRANSFORMATIVE
     they are investing in physical technologies while 70% say they will       these technologies, CEOs highlight big data and analytics, artificial                   AND WHERE THEY ARE INVESTING IS GREATEST FOR PHYSICAL AND BIOLOGICAL TECHNOLOGIES
     be transformative for their industries, and just 17% are currently        intelligence, internet of things (IoT), robotics and cloud and edge
                                                                                                                                                                          WHICH TYPES OF TECHNOLOGIES WILL BE THE MOST TRANSFORMATIVE TO YOUR INDUSTRY’S ABILITY TO TACKLE SUSTAINABILITY CHALLENGES?
     investing in biological technologies while 32% of CEOs say they will be   computing as their top five transformative – and most invested -
                                                                                                                                                                          OF THESE, WHICH IS YOUR COMPANY INVESTING IN MOST TODAY?
     able to tackle sustainability challenges.                                 technologies today (see Figure 7). According to Sandra Wu, Wen-Hsiu,
                                                                                                                                                                                                    Digital Technologies                                                            Physical Technologies                                                        Biological Technologies
                                                                               Chairperson and CEO of Kokusai Kogyo Co.,Ltd., “Technological
     Throughout our discussions, business leaders spoke to the potential       advancement is a ‘pull’ factor trend, that brings innovation to                                                                                                                  85%                                                                                70%                                                         32%
                                                                                                                                                                      Total % of CEO Responses
     upside and downside of the 4IR, emphasizing that in a sense, the          complex issues.”                                                                                                                                                          75%                                                                     51%                                                       17%

     world is at a crossroads, and the choices made now could exacerbate
     challenges or potentially provide the only real pathway of solutions      Investment varies across industries: the chemicals industry is                                                                                                       50%                                                                              36%                                                                  20%
                                                                                                                                                                    Big Data Advanced Analytics                                                                         Robotics                                                                    Bio-energy
                                                                                                                                                                                                                                             42%                                                                         27%                                                            10%
     toward 2030.                                                              most heavily invested in physical and biological technologies, 54%
                                                                               and 29% respectively. Braskem, for example, in partnership with the                                        AI/ML
                                                                                                                                                                                                                                                                Material Science
                                                                                                                                                                                                                                                                                                                                           Bio-based Materials
                                                                                                                                                                                                                                 29%                                                                       15%                                                                        8%
     Business leaders are managing the downside risks and                      North American footwear company Allbirds, has developed Green
     focused on the opportunities                                              EVA (Ethylene Vinyl Acetate copolymer) from a renewable source                                                loT
                                                                                                                                                                                                                                                                Electric Vehicles
                                                                                                                                                                                                                                                                                                                                           Genetic Engineering
                                                                                                                                                                                                                                 30%                                                                10%                                                                 2%
                                                                               as part of the I’m greenTM brand. GHGs are captured during the
     Enthusiasm about the upside of the technology revolution is met by        production process, reducing emissions. 1 kilo of EVA I’m greenTM                         Cloud/edge Computing
                                                                                                                                                                                                                             27%                                    Large Scale                              17%
                                                                                                                                                                                                                                                                                                                           Cellular and Tissue Engineering
                                                                                                                                                                                                                                 30%                             Energy Storage                 7%                                                                     1%
     unease on its unintended impacts, and if not carefully managed,           captures 2.51 kilos of CO2 compared to 1 kilo of fossil EVA which
                                                                                                                                                                                                                           23%                                                                             14%                                                           3%
     new technologies can shake up the development agenda for                  releases 1.84 kilos of CO2 into the atmosphere. In the energy                                    DLT/Blockchain                                                                        3D Printing                                               Hydroponics and Aeroponics
                                                                                                                                                                                                                   14%                                                                              8%                                                                  2%
     the worse. Accenture’s 2018 report, Inclusive Future of Work:             industry, Maersk Drilling A/S, for instance, is launching the first
                                                                                                                                                                                                                    15%                                                                             10%                                                                 2%
     A Call to Action, estimates that 57% of worker roles are highly           hybrid, low-emissions rig on the Norwegian Continental Shelf.                                             AR/VR
                                                                                                                                                                                                                                                                                                                                                  DNA Marking
     susceptible to automation, threatening worker job security, unequal       It uses batteries for large scale energy storage and cloud-based
                                                                                                                                                                                             SG                    14%                                                                              9%
     access to training and, lower proficiency in high-demand skills.10        systems for continuous optimization.11 Chief Executive Officer,                                                                7%
                                                                                                                                                                                                                                                         Autonomous Vehicles
     However, intelligent technologies - the same report finds - also bring    Jørn Madsen, told us, “We are optimizing and using digital, which
                                                                                                                                                                           Machine-to-machine                      14%                                                                         6%
     opportunities for growth: AI alone is expected to boost revenues by       brings down diesel use and emissions.”                                                          communication                   11%
                                                                                                                                                                                                                                                               Physical Markers
     38% and employment by 10% by 2022. Rob Shuter, Group President                                                                                                                                      4%                                                                               2%
                                                                                                                                                                                 Machine Vision                                                                 Next Generation
     & CEO of the South African telecommunications company MTN                 *A term which has gained currency by Klaus Schwab, Founder and Executive Chairman                                         3%                                                            Nuclear         1%

     Group speaks to job disruption in developing economies, “If emerging      of the World Economic Forum, and his book, “The Fourth Industrial Revolution”, 4IR
                                                                                                                                                                                                         4%                                                                            1%
                                                                               technologies are characterized by a range of new technologies that are fusing the           Quantum Computing                                                                       Spectoscopy
                                                                                                                                                                                                        2%                                                                             1%
                                                                               physical, digital and biological worlds.

                                                                               10. Accenture (2018) Inclusive Future of Work: A Call to Action
                                                                               11. Maersk Drilling (2019) Maersk Drilling to launch first hybrid, low-emission
28                                                                                                                                                                                                                                                                                                                                                                UN GLOBAL COMPACT CEO STUDY 2019 | 29
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