A recent global study by SAP Insights shows that taking action toward greater sustainability isn’t just good for the planet: some businesses also see it as a path to increased profitability and competitiveness.

But how are midsize companies creating strategies for sustainability, and how are they incorporating it into their operations? To find out, we surveyed companies with annual revenues of US$1 billion or less, then divided them into three distinct groups. The smallest companies, with revenues of $50 million to $249 million, account for 40% of all midsize respondents. Those in the middle, with revenues of $250 million to $749 million, are another 40%. The largest, with revenues of $750 million to $999 million, are the remaining 20%.

Top Categories of Findings

Motivators

Sustainability is driven from the top, with leaders pushing their organizations to act across all midsize companies. But government regulations are the top motivator for the smallest of midsize companies surveyed.

Barriers

Uncertainty about embedding sustainability into the business runs high, as do lack of funding, difficulty proving ROI, and ambiguity about actual environmental impact.

Data quality

Larger midsize companies are far more likely to be satisfied with the quality of their environmental sustainability data (27.6%) than smaller companies (17.6%).

Data dissatisfaction drivers

Respondents are concerned about ease of data accessibility, understanding the calculations behind it, and its completeness, scope, and collection frequency.

Financial materiality

Most companies don’t see sustainability as financially material to their business today, but a minority do – and they are seeing the link between sustainability and value creation.

Impact on profitability

84% of larger midsize companies see a positive relationship between sustainability and their long-term profitability.

Impact on competitiveness

Larger midsize companies are more likely to see a positive relationship with long-term competitiveness (77%) than smaller companies (70%).

Impact on strategic and operational decisions

A large majority of all midsize respondents already see environmental sustainability data as an important piece of their strategic and operational decisions; but the larger companies get, the more likely they are to appreciate the importance of making the connection.

Investment priorities

Investing to stop climate change matters, but businesses are first prioritizing mitigation of air pollution, water pollution, and the impacts of solid waste.

Browse our sustainability research