A clear gap has emerged between companies that embrace sustainability and integrate it into their overall business strategy (the “embracers”) and companies that integrate sustainability only on a limited basis by focusing on individual, short-term activities such as resource efficiency (the “cautious adopters”).

That’s the main finding of a study released this winter by the MIT Sloan Management Review and Boston Consulting Group. The study team interviewed 3,000 business executives and managers from companies located around the world ranging in size from fewer than 500 employees to over 500,000 employees. The business leaders represented every major industry, and they were asked a range of questions about sustainability at their companies.

And here’s the eye-opener: the sustainability gap identified in the study equates to competitive advantage.

The study states that embracers “tend to have recognized the potential for sustainability strategies to deliver new customers for their goods and services as well as to increase their market share and profit margins in existing markets.” 70% of embracers believe that they are outperforming their competitors, compared with 53% of cautious adopters who believe the same thing. Furthermore, the study shows that cautious adopters often lack confidence in their competitive position, with 14% believing they are underperforming. The embracers are also no longer making the business case for sustainability—it’s part of their overall business strategy. In the words of Peter White, Director of Global Sustainability at Proctor and Gamble, “From our point of view, it’s a done deal—it’s proven, let’s get on with it.”

And since they’ve already made a solid business case for sustainability, these embracers are more willing to take a leap of faith. Unlike cautious adopters, the embracers don’t let their struggle to quantify the return on sustainability investments keep them from moving forward with sustainability projects. Cost cutting and risk management frequently drive cautious adopters’ sustainability activities, whereas embracers have identified broader drivers for sustainability, such as increased market share, better business models and access to new markets.

So who are these embracers and how do you become one?

The embracers tend to be larger, in resource-intensive industries and in growing markets. More product-based industries tend to be embracers than service-based industries. Embracers are three times more likely than cautious adopters to believe that sustainability-related activities have made them more profitable, and they’re also more actively engaged in assessing the risks associated with not fully addressing sustainability issues.

Not surprisingly, embracers also focus on the human side of implementing sustainability projects. At all levels of the organization, personnel are empowered to actively contribute to the sustainability dialogue and carry out specific activities—from the chief sustainability officer to the individual unit manager to the line worker.

And perhaps most importantly, the study found that external forces, such as public policy, institutional investors, employees, customers and trends towards accountability are tipping the scales in favor of the embracers. Savvy cautious adopters are realizing that the world is headed in the direction of the embracers and are beginning to move in that direction. In keeping with this realization, the study reports that 63% of cautious adopters plan to increase their sustainability spending in 2011, presumably to help close the gap between them and their embracer counterparts.

The study credits sustainability-driven management as the heart of putting the embracers where they are. So what does sustainability-driven management mean? The following seven management practices were identified through the study as common to embracers:

1. Move early – even if information is incomplete.
2. Balance long-term vision with near-term wins.
3. Drive sustainability from both directions—top-down and bottom-up.
4. De-silo sustainability—integrate it throughout company operations. (This one’s our favorite.)
5. Measure everything, even if a way to measure it isn’t yet apparent.
6. Value intangible benefits seriously.
7. Be authentic and transparent—both internally and with external stakeholders.

Ultimately, the study finds that companies that view their business through the lens of sustainability are identifying opportunities that they otherwise might have missed. Companies that want to gain competitive advantage in this sustainability-driven world need to start adopting the practices of the embracers.

So, the only question left is: Are you an embracer or a cautious adopter? And if you’re not an embracer, iSpring can help you get there.

Source: Sustainability: The ‘Embracers’ Seize Advantage (Findings from the 2010 Sustainability and Innovation Global Executive Study and Research Project). MIT Sloan Management Review and Boston Consulting Group. Winter 2011. Get the full report here.