Unclear ROI hindering ability of CEOs to take action on sustainability finds IBM Institute

A new IBM Institute for Business Value – IBV study revealed that sustainability is rising higher on corporate agendas, and CEOs recognise sustainability as a business imperative and growth driver. Yet as CEOs face growing pressures from boards and investors, unclear ROI and economic benefits are hindering their ability to take action.

IBM’s annual CEO study, Own your impact: Practical pathways to transformational sustainability, surveyed more than 3,000 CEOs worldwide, 350 of which were from the Middle East and Africa region. The survey found that more than half of MEA respondents rank sustainability as a top priority for their organisations— an increase of 22% from 2021. However, global figures confirm that more than half 51% also cite sustainability as among their greatest challenges in the next two to three years, with lack of data insights, unclear ROI, and technology barriers as hurdles. And while 95% of CEOs globally report being at least in the piloting stage of implementing their sustainability strategy, just under a quarter 23% say they are implementing their sustainability strategy across their entire organisation.

“CEOs are leading during one of the most complex environments ever, including war, inflation, talent shortages, and the Covid-19 pandemic health crisis,” said Saad Toma, General Manager, IBM Middle East and Africa. “Despite these challenges, they aren’t taking their foot off the gas when it comes to sustainability, and more now rank it among their top priorities. The current landscape presents an opportunity to use data and AI in ways never before considered and we remain committed to providing our unwavering support to partners and customers to help them achieve their goals.”

51% cite sustainability as among greatest challenges in the next two to three years, with lack of data insights, unclear ROI, and technology barriers as hurdles

Key study findings include:

CEOs say sustainability is climbing higher on their agendas and believe it can help drive business performance

• More than half 52% of CEOs in MEA say increasing sustainability is one of their highest priorities for their organisation in the next two to three years – up 22% since 2021.
• Nearly 70% of surveyed CEOs globally say they are directly involved in defining their organisation’s sustainability strategy.
• Nearly 40% of MEA CEOs believe that their sustainability investments will accelerate business growth, and more than 30% of them find that their sustainability strategy, actions, and stated targets have made it easier to access capital.

Pressure is mounting from stakeholders, but unclear economic benefits  and regulatory barriers stand in the way

• More than half 52% of surveyed CEOs in MEA cite sustainability as among their greatest challenges in the next two to three years, up from 12% in 2021, ahead of regulation 49%, cyber risk 44%, technology infrastructure 40%.
• Nearly 60% of MEA respondents list unclear ROI and economic benefits as a leading challenge to achieving sustainability objectives, followed by regulatory barriers 49%, and a lack of insights from data 41%.
• 37% of respondents in MEA also identify technological barriers to implementing sustainability in their organisation.

CEOs are putting words into action, yet aren’t embedding sustainability strategies across the organisation

• Respondents indicate that CEO investment in sustainability has more than doubled as a percentage of revenue over the last five years.
• Nearly 60% of MEA CEOs are confident they’ll achieve their sustainability goals and only 23% of CEOs surveyed believe sustainability targets announced by government for their industry were not achievable.
• More than 60% of surveyed CEOs in MEA say they are implementing at least some aspects or functions of their sustainability strategies.