Research released by KPMG International and CIES reveals that, far from regarding corporate responsibility as a cost, many leading retailers and manufacturers see sustainability as:

• a driver of innovation that can help build growth and profitability
• integrated into the core business
• driven by business need than formal requirements
• having a neutral or positive impact on the bottom line
• playing a crucial role in recruitment and retention

The wide-ranging research also pinpoints the impact the economic downturn is likely to have on companies' commitment to sustainability and the challenges many businesses still face in identifying priorities in this area.

The report, 'KPMG/CIES Survey 2008 - A survey into the growth and sustainability issues driving consumer organizations worldwide', synthesizes the views of over a quarter of the 750+ delegates attending the three-day CIES World Food Business Summit held in Munich, Germany - its focus 'Growth and Sustainability: Building Profit with Responsibility.'

Nearly half of those questioned (47.7 percent) felt sustainability was an important driver of innovation. This was true of companies worldwide. A majority (56.5 percent) stated that sustainability was now a core element of business strategy.

The results also help pinpoint the forces driving the sustainability agenda, with over a third of companies (34.9 percent) identifying 'stakeholder demand' over other pressures such as legal requirements, voluntary codes, taxes and carbon costs.

This confirms that the adoption of sustainable business strategies is not primarily driven by formal requirements, but rather by the imperative of business need.

Sustainability is not just about protecting the environment. It has to do with issues such as food security, food safety, job creation and individual prosperity, healthy eating, fair trade and ethical sourcing of products, labor rights, customer loyalty and poverty alleviation.

Just over 80 percent of the companies surveyed say that the greatest challenge they face in developing a sustainability strategy lies in identifying and prioritizing issues, developing strategies to meet those issues, and measuring performance.

The focus has moved away from the publication of a glossy corporate responsibility report to the more challenging exercise of identifying and prioritizing material issues.

However, the research reveals the surprising number of companies (15.5 percent) still without any sort of sustainability strategy; with businesses in EMEA the worst offenders (18.6 percent). Another cloud is the prospect of an economic downturn and how this might impact companies' commitment to sustainability. Just over half (52.8 percent) believe that sustainability investment will either be put on hold or reduced in an economic downturn. The remainder reported that the impact will have a neutral or positive impact on sustainability investment.

Further cautious optimism is echoed in the the parts of the survey quizzing executives about the prospects for growth in their sector. It reveals that a majority of businesses are turning away from diversification, acquisitions and alliances, and towards organic growth (54.8 percent).

The survey also highlights those companies most likely to tackle the recruitment and retention hurdle. Those companies most positive about the impact of sustainability on their bottom line appear also the most concerned about their human capital (39 percent). The link is significant given the majority of organizations surveyed regard recruitment and retention as top of the list of challenges to their growth (30.6 percent) - ahead even of a slowdown in consumer demand (29.7 percent) and increased costs of raw materials (27 percent).

Galina Efremova, Director Corporate Governance Group, KPMG in Russian and the CIS agrees that sustainability is now fundamental to meeting the recruitment challenge.

"For the company adherence to the principles of sustainable development is not only the way to increase its investment prospects, but also to discover the advantages of a long-term investment. Russian companies, both of industrial and financial sector, define qualified staff as one of the key drivers of sustainable development. Employers plan to invest in training and professional development of employees which, in their view, would also be a source of development and implementation of their own know-how technologies within the company. At KPMG, we consider our corporate responsibility programs to be a significant contributing factor in attracting high caliber graduates."