ITWeb’s The Green Mile (http://bit.ly/cItZaV) asked us for comment on developing a sustainability strategy. Following are some of our thoughts.
Many companies are daunted by the idea of developing a road map for sustainability – what would your advice be to them?
Being daunted suggests that we probably appreciate the complexity, timeliness and breadth of the challenge. This has value if it limits our tendency to get carried away by the fluff. Greening the office and charitable donations may not be fluffy in themselves, but to mistake them for an informed sustainability strategy is. Here’s my advice: take 10 minutes, close your eyes and allow yourself to become completely overwhelmed. Once you have appreciated the depth of the challenge, write down the first thing you are going to do about it. Then keep going.
What is the first thing(s) companies should consider when setting up a sustainability strategy?
The first question a company should ask is: How might increasing volatility – economic, social and environmental – impact on our ability to create value? This highlights the link between sustainability and the value drivers of the company – it keeps initiatives focused on the core business rather than fiddling at the edges. This is imperative: sustainability is not about how we spend one percent of post-tax profits – it is about how we make those profits.
The “triple bottom line” might be conceptually appealing, but there are no prizes for guessing which bottom line will always be the most important. Rather than having additional bottom lines, sustainability should focus on putting the financial bottom line radically into context – linking it to long-run competitiveness and the competencies required to achieve it. Although focus will remain on profitability, sustainability will move us beyond a debilitating obsession with short-term returns.
Who should drive this process?
It depends who “gets it”. It may be the CEO or a visionary director driving the shift in perception within the Board. It may be a particularly astute sustainability manager who has the passion to influence her leadership team. It may be a union leader who makes the link between financial, social and natural capital constraints. Wherever it starts, the process should be increasingly be driven by a shared vision and a growing team of change agents. As organisational development pioneer Richard Beckhard says: “One person seeking to change an organisation will get killed; it doesn’t matter what position the person is in. Two can commiserate. Three can become a full-fledged conspiracy.”
What are some of the fundamental considerations businesses should keep in mind when going about implementing such a programme?
- Get wise. There is a multitude of ill-informed sustainability guides and guidance-givers out there. Before launching into an initiative, ask every sustainability manager you know for their recommendation on the best thinkers in the business. Talk to them.
- Get a strategy. This is not a list of actions and intended completion dates. It is not even a Big Hairy Audacious Goal like “zero waste”. A strategy does three things: it links sustainability to your core value drivers, enables systematic management of material impacts (both positive and negative) and clearly defines what competencies you need to ensure long run competitiveness. Without this, your efforts will probably be overwhelmed by well-intentioned fluff.
- Get a dashboard. No measurement, no movement, no miracles. Explore a dashboard that measures not only the impact your company has on society, but the likelihood of sustaining its positive impact (in other words, its resilience).
- Get going. The companies making the big money in the coming transition and future sustainable society are those that got it first. They moved quickly up the learning curve, linking their core business to the innovations and new markets emerging in the sustainability space. They already have the business model.
What are some of the common pitfalls companies experience when it comes to adopting a sustainability strategy?
The biggest pitfall is branding on some aspect of sustainability (usually “green”) before adequately understanding what it means for the business. Sustainability reputation depends on the internal culture. Without this, marketing green or ethical credentials can become a liability.
The second biggest pitfall is realising belatedly that the key sustainability issues in South Africa are not green (or environmental) as much as red (or social): poverty, diversity and equity are critical focal points, often overlooked in the drive to replicate eco-focused initiatives of the North.
From your experience, are many local companies integrating sustainability into the core of the business, or is it still something of a side-concern?
Based on my observations, I would say about 80% of South African companies are still under the impression that sustainability is about being nice, ticking the JSE social responsibility index requirements, celebrating Earth Day and giving to a local charity. The degree to which sustainability is informing strategy discussions, building agility, driving innovation and opening the company to new branding opportunities remains limited.
Is this changing? Why or why not and to what degree?
Besides a handful of asset managers, most mainstream analysts do not see sustainability as material. Until they do – which will happen fast when it does – change in companies will be delayed. That being said, given how things have speeded up in the past year I think the tipping point is not far off. At Incite, one of our key drivers is shifting perceptions around sustainability: we reckon the next two years will be pivotal.
How important is employee education / training in building sustainability into business functioning?
Ultimately sustainability should become a way of thinking within the organisation: whether you are the financial director, the cleaner, a lab manager or working on the assembly line, sustainability should help you to think and ask questions about ways to do things better, that add more value to the company and its stakeholders. Inspired learning is critical. The return on investment is hard to measure, but potentially infinite
What is your one piece of take-away advice for a company looking to implement a sustainability strategy?
Never underestimate what might happen when you start aligning your business with the way nature thinks.