This blog is a continuation of a two part series. The first, 5 Reasons You Need a Sustainability Strategy, is also available on our blog.
Creating a sustainability strategy sounds daunting, doesn’t it? Trust me, it doesn’t have to be. And like any major strategic project or business transformation, it’s best-approached one step at a time, so here’s my high-level guide.
1. What is sustainability?
First, let’s align your company on a definition. According to the UN, a sustainable business “meets the needs of the present without compromising the ability of future generations to meet their own needs.” That’s a bit of a mouthful, so I often turn to the triple bottom line – or “people, planet, profit” – three elements that need to be in balance to achieve sustainable results. Note that “profit” is one of the three key elements – or else your business will not survive long enough to have a positive impact!
2. What does it mean for our company?
The challenge is connecting these lofty concepts directly with your business. One way to do this is by conducting a “materiality analysis.” This exercise involves considering what your stakeholders expect of you, as well as what’s critical to drive your business. Materiality analyses can be done simply by talking with a number of leaders inside and outside your organization. In large companies, materiality is often represented as a matrix, leading the business to focus on the top right quadrant – those sustainability issues most important to stakeholders and the company.
For illustration purposes, here’s a great example from PG&E’s 2015 sustainability report (Sustainabilist did not contribute to this work):
Whatever the size of your company, identifying the critical sustainability issues is what matters most.
3. Measure, measure, measure
It’s often said that you can’t manage what you don’t measure. So I’ve found the art of footprinting – ideally, both carbon emissions and water use – to be highly important to strategy. If you can’t do both, start with carbon and footprint all your impacts. I led these efforts at two companies, and we gained many critical insights. In both companies, the company’s direct impact – its offices and other owned operations – were only 5-10% of the total footprint. The rest of the impacts were either upstream – in the supply chain – or downstream in customers’ use of products and services.
4. What projects could we implement to improve?
Insights into what’s material and where the footprint impacts are largest will lead directly to project ideas for sustainability improvements. Perhaps the transportation of products from your factories to customers is a major part of the footprint. At one company where I worked, we improved our inventory practices to minimize the use of air shipments to fill demand surges. Maybe yours is a services company, in which case reducing travel through teleconferencing can improve your footprint. Or perhaps stakeholders expect you to uphold and improve human rights in your value chain. I’m familiar with many groundbreaking projects to do just that. Throughout this analysis, a balance of the largest impacts vs. the return-on-investment for proposed projects needs to be considered.
5. Empower a team to drive results
In most companies, sustainability strategies involve many parts of the organization. These may include the teams that manage real estate and buildings, supply chain, transportation, procurement and product design. Business unit leads, HR and marketing also may have an interest in the sustainability agenda and in publicizing the progress (see point 7, below). So empower a team to build alignment and cohesion between the work of these different groups.
6. Set goals and report progress
The sustainability team’s performance will be accelerated by clear goals. Reducing carbon footprint x% by a certain date, or improving supplier diversity y% over a certain period. In the tug-of-war of sustainability progress, having everyone pulling in one direction and toward the same key objectives will speed the positive impacts.
7. Tell your story
As alluded to above, and mentioned in the last blog post, sustainability drives employee engagement and competitive differentiation. Therefore, progress made toward goals, and work to improve what’s material to stakeholders, should be communicated internally and externally. Many companies produce an annual sustainability report, for just this reason. The report should also be integrated into your customer materials and other stakeholder-facing communications to maximize impact. Remember to be transparent; not every project will succeed and not every goal will be met easily and on-time. It’s better to be open about triumphs as well as setbacks; it builds credibility.
8. Measure the business benefits
As sustainability becomes embedded in the company strategy and results become routine, be sure to capture the benefits to your business – whether these are cost savings, improved employee engagement, RFPs and sales volume won, or other awards and recognition. Some of these measures are hard data (e.g. cost savings), while others are captured in surveys (employee engagement) or are even qualitative. Whatever the data sources, detailing the positive impact sustainability makes to your company is critical to maintaining organizational commitment.
I hope this two-blog series has raised your interest in creating a sustainability strategy for your business. And of course, the Sustainabilist team is ready to help accelerate your company’s progress with any or all these actions. Just give us a call or drop us a note at firstname.lastname@example.org