As Geoff Barneby noted in his earlier post Doing the Right Thing in Business: Are You Doing it Right?, several critical questions must be considered before launching a strategic sustainability program, including:
- What is your corporate vision for sustainability?
- Do you have clear and measurable sustainability goals?
- Who will sponsor and lead your sustainability initiative?
- Who will manage your sustainability initiatives through full implementation, and coordinate across business silos?
- How will you measure the results and report on your progress?
- How will you get critical stakeholders on board with the program?
In Geoff’s subsequent post, Sustainability Management Infrastructure: What It Is and Why You Should Care, he introduced the Sustainability Management Maturity Model (or SM3), a tool developed by FairRidge Group to help organizations address these questions using a quantitative, systems-based approach. In addition, SM3 helps businesses to assess how capable their management infrastructure is for responding to, managing, and ultimately taking advantage of coming sustainability challenges.
Today, many companies acknowledge that they can play a significant role in addressing climate change and sustainability in general. Some have even begun proactively beating a path to transform their businesses, reaching for lofty goals such as zero waste, carbon neutrality, or even restoration of degraded ecosystems. Most, however, are only just starting to figure out what it means to be a sustainable business. In a previous post, I discussed the 5 levels of sustainability management maturity, through which a company must progress in pursuit of a sustainability transformation. So where should a company invest to successfully reach their sustainability goals?
In my opinion, there are four primary areas that you should consider when developing a sustainability investment plan: management infrastructure, eco-efficiency programs, strategic initiatives, and marketing programs. Clearly, there is a need to address these areas somewhat sequentially; you cannot successfully market sustainability before making strategic changes, and you cannot develop strategic initiatives without already having an appropriate management infrastructure in place. There is, however, room for overlap, and most mature companies manage to do all four in parallel.
As the world wrestles with the challenge of a low carbon future, the issue of water – or rather, the lack of it – has started to emerge as an even more fundamental constraint. Global water reserves are being put under strain not only by more frequent droughts (thanks to global warming), but also from annual global population growth of about 77 million people. Indeed, climate change experts at the Scripps Institution of Oceanography claim that nearly 1/6th of the world’s total population is already vulnerable to a lack of water brought about by environmental and demand changes. As the population continues to grow and the effects of climate change accrue, this number is likely to rise significantly.
Because nearly every industry requires water at some point in their value chain, this fundamental liquid is emerging as the strategic sustainability issue, potentially even more influential than carbon. The beverage industry is particularly vulnerable to changes in the water supply; water is used extensively throughout the beverage supply chain, from the growing of ingredients to the pumping and bottling of product. So, is the water intensive beverage industry fated to be a “canary in the coal mine” – early road kill in the coming water wars? Or does it have another role to play – as a leading developer of innovative water conservation techniques, perhaps? The stakes could not be higher for an industrial sector completely dependent on continued easy access to large quantities of fresh H2O.
These days, we hear more and more that a company’s stance on social and environmental issues plays a significant role in choice of employer. A recent survey found that over 50% of American workers report being inclined to work for “green” companies. Women and Generation Y in particular want their company’s mission to go beyond profitability, encompassing benefits to the wider community, on social, environmental and economic dimensions (with men and Boomers not that far behind). They are eager to work with companies in which they feel they can make a difference.
Driving sustainability into the operations of a company is an oft-stated goal for sustainability departments. How many times have you heard (or said!): “My vision is that one day our department will go away…and sustainability will be just part of everyday business, and the sustainability department will be out of a job.” But how do we actually make that happen? How do we ramp up a sustainability program from a departmental focus to an organization-wide set of capabilities? And how do we move from many disparate efforts to a cohesive set of coordinated initiatives? The answer is an effective sustainability governance solution.
So what to do?
To solve these challenges, a “governance” solution is required that addresses both the diffusion of sustainability into the organization (from the sustainability department into general operations) and sustainability collaboration across the organization (to establish synergies such as the sharing of best practices, resources, tools, etc.).
Effective sustainability strategies depend on many moving parts. Sustainability change experts reading this blog will tend to have more than a little experience with most of them! However, there’s one tool that we’ve seen chronically underutilized: social networking. These tools aren’t just for connected teenagers anymore – effective use of social networking can make all the difference in effectively communicating sustainability efforts while positively impacting image and brand. Using sites like Facebook, Twitter, and LinkedIn, savvy organizations can now easily and inexpensively (think sustainable!) communicate directly to their customers.
Social networking can and should be a crucial part of every comprehensive sustainability strategy. Read on to discover how it can maximize the return on your sustainability initiatives.
“Have To” vs “Want To”
We all know individuals who are committed to living sustainably, conscious of the impact their daily lives have on the environment. They may take public transport, bike, or walk wherever they can, rather than drive. Perhaps they recycled their bottles long before it became popular, or used their kitchen and garden waste to make compost. Like some people, there are companies that were ahead of the curve, openly calling out sustainability as an integral part of their mission – companies like Seventh Generation, The Body Shop, and Whole Foods.
Today, it’s no longer just these true believers who embrace sustainability. There is an ever-growing number of individuals and companies who take sustainability very seriously, even though they never started out with that conscious intention. How does that (rather dramatic) change come about?
Last month, Geoffrey Barneby wrote about FairRidge’s Sustainability Management Maturity Model (SM3), a tool to help businesses assess their readiness to address sustainability challenges and opportunities. Five management components were reviewed — Strategy, Organization, Process, Measurement, and People – which all relate to an inside-out perspective of the business.
As we’ve continued to evolve the model, another dimension has emerged for evaluating sustainability infrastructure: the outside-in perspective. This refers to the level of competitive differentiation and advantage that’s desired by the leadership team. On the scale of laggard to leader, how is your business perceived in the minds of customers, and is it where you want to be? This market-facing, aspirational consideration can drive both the internal infrastructure required for a market leadership position, as well as external initiatives to improve marketing, customer experience and ultimately competitive differentiation.
You’re probably already familiar with the ongoing debates over greenwashing, and the various sustainability standards that enable companies to credibly avoid this label. We discussed these issues in the recent post “How green is my product?” But what about services? Do they matter, and do we need to care? After all, isn’t sustainability just concerned with tangible products that use up or destroy the planet’s resources?
In today’s economy, energy efficiency is a top priority for both public and private institutions. It promises to reduce energy expenditures, lower GHG emissions, and – of course! – to save a pile of money. While there’s been talk of energy efficiency since the 1970s, excitement has grown recently due to oil price fluctuations and energy efficiency funding in the federal stimulus plan. So, does this mean that we can finally save money from energy efficiency – without having to spend more cash first?
As individuals, we want to do the right thing – but as businesses, we are challenged by the need to be profitable. The goal of sustainability is to accomplish both: to improve profitability today, while not compromising the environmental and social constraints of the future. As discussed in a previous post, Doing the right thing in business: Are you doing it right?, businesses must treat sustainability as a strategic opportunity, and move beyond eco-efficiency to achieve this greater goal.
Here’s how you can get started…
Or: How I stopped worrying about greenwashing and learned to love EPDs
You have a product and you want to tell the world how great it is. But what if you want to make claims that it’s better than the competition? How can you do so without being slammed for greenwashing? Even in these early days of green marketing, already more than one company has fallen into that trap, resulting in considerable backlash.
Consider Cotton USA, with their claim that industrial cotton production is sustainable – even though it is an intensely petroleum and chemically-driven monoculture. Chevron’s “Will You Join Us” campaign is considered to be another big violator – the tagline itself rings patently false to anyone semi-aware of any oil company’s carbon credentials. So, how can you launch a sustainability marketing campaign and avoid the pitfalls of a greenwashing backlash?
Why should sustainability change agents care about executive sponsorship? Because as sustainable business matures, those of us working in sustainability will find that after eco-efficiency, the next great step will come by leveraging sustainability on a strategic level to truly transform our businesses. Just like the Internet before it, sustainability will grow beyond its roots to become much broader, mission-driven, and transformative. And at that point, sustainability change agents won’t just be dealing with light bulbs or solar panels, but driving true strategic change. In numerous benchmarking studies on the critical success factors to implementing successful strategic change, active and visible executive sponsorship heads the list.
With sustainability, the need for strong executive sponsorship is enormous. In any large organization, some people at every level of the organization will be unconvinced that sustainability is affordable, or view such efforts as simply “greenwashing.” A well-placed, articulate and influential sponsor has the unique ability to both motivate and compel these people to support your efforts, especially as you transition from the operational to strategic realm. The executive sponsor leading the effort needs to be a passionate advocate, believing that sustainability is an imperative – an imperative based on a powerful business case. The sooner you can find a strong executive sponsor, the better positioned you will be for taking sustainability to a strategic level.
Yogi Berra once said, “If you don’t know where you are going, you might wind up someplace else.” There’s a lot of truth in that statement, particularly as it relates to sustainability: unless you have a good idea of what a sustainable version of your organization might look like, you may have some trouble getting there. But the problem cuts both ways. What if you don’t know how you stack up regarding your sustainability efforts? So a variant on that statement could be, “If you don’t know where you’re starting from, you might not find the right path on the road to sustainability.”
In 20+ years of working with customers, I have noticed that my clients frequently want to jump straight to the “solution” or “execution” phase. It’s not hard to understand why: these are the parts that get featured in media and case studies as the stroke of genius that solved an intractable problem. Why waste time in doing the strategy, planning and consensus-building exercises, when jumping to the end is so much more fun?
There is a mounting consensus that while business has created serious environmental problems, developing sustainable practices to address these issues can result in bottom line benefits. So why hasn’t sustainable business taken off like those metal Klean Kanteen water bottles?
The reason may surprise you: although most businesses acknowledge the efficiency benefits that sustainability can create, few companies are treating sustainability as a strategic opportunity. The majority of existing sustainability efforts are still ad hoc (often a reaction to external compliance pressures), poorly funded, and tactical in scope – so they rarely impact the core strategy and positioning of the business. In order to really create a sustainable future – and to reap the benefits of sustainable competitive advantage – companies must move beyond efficiencies to a more transformative implementation of sustainability. This is a challenging task, so it’s not surprising that few companies have gotten it right. The upside is that doing it well can lead to a real opportunity for competitive differentiation – one that may define winners and losers for decades to come.