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Planning Corporate Sustainability Programs: Eight Leaders on Where to Start

By: Leah Kinthaert

Corporate sustainability has certainly come a long way – in 2010 a McKinsey report told us that “only around 30 percent of executives say their companies actively seek opportunities to invest in sustainability or embed it in their business practices”. Fast forward to 2016 and that number of companies with a sustainability strategy in place had doubled: MIT Sloan Management Review with the Boston Consulting Group found that “60% of companies have a sustainability strategy” while “90% of executives” saw it as important. We also know there has been a dramatic increase in S&P 500 Index® companies, for example, who have published sustainability reports: from 20% on 2011 to 85% in 2017. Mervyn King, former governor of the Bank of England, has made this prognosis: “Sustainability is the primary moral and economic imperative of the 21st century. It is one of the most important sources of both opportunities and risks for businesses.” Headlines are in the news every day, thousands of companies are taking action, setting up sustainability initiatives for the first time or boosting programs they already have with high profile partnerships with organizations set up to track, monitor and in some cases rank sustainability. But what are the key issues companies should focus on when beginning a sustainability initiative? I spoke with eight sustainability leaders including Chris Page, former Climate Action Director, City of Seattle; Ben Thompson, Director of Sustainable Business, Autodesk; Holly Emerson, Senior Sustainability Analyst, Ingersoll Rand; Andrea Pinabell, President, Southface; Bjørn K. Haugland, CEO Skift; Anne-Marie Warris, Director, ecoreflect; Ben Wielgus, Chief Sustainability Officer, Informa; and Dr. Saskia Juretzek, Senior Manager Sustainability, Allianz to ask their advice on where to start.

Chris Page, former Climate Action Director, City of Seattle @greenumerations

“I would say the most important thing is to focus on action. Where can your organization make a positive impact in the world in the near term? We know that we need to see dramatic change before 2030 to address climate change, so prioritize rapidly doing something tangible to get started. Taking action will foster enthusiasm and raise sustainability’s profile within your organization. Then you can leverage this energy and momentum to do even more.”

“Step back and look at your organization’s place in the overall system before hiring a consultant or engaging in an expensive or time consuming greenhouse gas inventory. Ask what the biggest impact is of your particular business – do you manufacture widgets that consume a lot of electricity, or produce a lot of wastewater? Do you own a lot of buildings, or are you a small consulting firm where everyone flies a lot?”

“But also ask, where do you have a unique opportunity to create change for the better in the larger world? Can your product or business reduce carbon on a massive scale for other sectors? Lorie Wigle of Intel often pointed out that the information and communications industry is responsible for approximately 2 percent of global emissions – BUT the same industry was looking to create radical increases in energy efficiency for the other 98 percent of the world by enabling more efficient buildings, transportation and infrastructure.”

“A sustainability strategy in 2019 will also need to include considerations for resilience and adaptation. The world is already changing – temperature increases, sea level rise, ocean acidification, species migration and extinction. A responsible and realistic sustainability strategy must be aggressive in seeking to reduce GHG emissions, but also look how to best address our changing world in a meaningful manner.”

“Finally I think it is the responsibility of all organizations to look at the issue of climate justice – how do we impact, either negatively or positively, the poorest and most disadvantaged members of society. They are the people impacted by the effects of climate change, and often with the fewest resources to recover from those impacts. In any sustainability journey, centering equity early on in the conversation is important.”

Ben Thompson, Director of Sustainable Business, Autodesk @bentup

“When launching a sustainability initiative, it is important to have focus. Answering two key questions will help you get started; 1) what is the goal of the program and, 2) what is the current state?”

“Companies have many reasons for investing in impact programs. Maybe the priority is attracting and retaining top talent, making employee engagement and internally-visible initiatives the focus. Perhaps improving community relations is the aim, making stakeholder engagement and local initiatives the first priority. Others may be going after an untapped market opportunity, looking to improve brand reputation, or even access to capital. Clarify the reasons your company is implementing sustainability goals. At Autodesk, it’s all about impact for the world, impact for our customers, and impact for Autodesk.”

“Once you have a clear focus, the next step is understanding the current state of your focus topic and setting a baseline. Conduct a materiality assessment to determine what issues are the most important for meeting your goals. As part of your assessment, do some preliminary measurement. For example, you may want to measure your company’s carbon footprint. A hot-spot analysis can affordably identify areas where you need to take a closer look. You may get pressure to measure and set targets for all kinds of things, but especially early on, let your goals and the materiality assessment drive your actions. Do yourself a favor and focus.”

Holly Emerson, Senior Sustainability Analyst, Ingersoll Rand @IngersollRand

“Building an effective sustainability program can be daunting for any company. It helps to think of ‘sustainability’ in terms of environmental, social and governance issues. Aligning sustainability goals with strategic business objectives and analyzing which issues are most important to the organization – i.e., the handful of issues with greatest impact – is a great place to start. A robust materiality analysis which covers the entire value chain is generally the accepted method to accomplish this. The analysis should take internal and external stakeholder input into account as well as the impact the organization has. The end report can help identify sustainability-related areas of opportunity and help a company focus and establish meaningful targets and goals.”

“Implementing sustainability goals also comes with an expectation of accountability and disclosure. Articulating and disclosing risks and opportunities associated with material issues, and how they are being addressed (either mitigated or capitalized) is a hallmark of sustainability – particularly with respect to climate change. Companies can mitigate sustainability-related risk while driving profitable growth through innovation.”

“Unfortunately, the days of setting incremental targets are over. But that’s okay, because a sufficiently ambitious target (for example, a carbon emission reduction target that is aligned with the science) can motivate and focus employees and lead to rapid innovation and sometimes a better market position. Solving the most material issues will ensure that the company’s effort is impactful to planet, people and in the marketplace. Lastly – if you achieve a target early, celebrate the win and channel the energy into the next set of even more ambitious targets.”

Andrea Pinabell, President, Southface @DrePinabell

“If an organization is just getting started with implementing goals, there are three key elements to ensure that the organization will be successful long-term in achieving those goals. The first and most important is determining what is material within the ESG (Environmental, Social & Governance) construct and what is most important to the stakeholders, including employees, leadership, partners and investors/shareholders. Once these are determined, then the sustainability and engagement program and its impact can be measured in a way that is meaningful to the company. The second is to engage the employees in a way that connects them to the goals. This is vital no matter if the goals are centered on women’s empowerment, zero waste or 100% renewable energy. Third is often missed but vital, which is to set up the framework to collect not just data for reporting but stories along the way, so that the company can clearly connect their goals to the outcomes they set forth to accomplish.”

Bjørn K. Haugland, CEO, Skift @BjornKHaugland

“The UN Sustainable Development Goals are a common vision and a shared framework for a path to a better world. It is crucial to view the 17 SDG’s as a framework to a better future for all; it has a time limit towards 2030, so it is a clear and measurable goal for society and business. There is, in my opinion, a big opportunity for businesses and business leaders to take advantage of the value that a strategic SDG alignment can bring to their businesses.”

“First, take the starting point that the core reason for aligning with the Sustainable Development Goals is all about business value creation. When done right, strategic alignment can bring value across the sphere of influence of any business, from customers to investors, and employees to community stakeholders.”

“Secondly, the first step to deciding how alignment might be beneficial to the company is understanding where the company fits amongst the 17 goals. What goals does the company touch on directly? Indirectly? Where could it proactively have an influence? Starting with these questions, an organization can begin to visualize its place on the SDG map and start making decisions about how it wants to contribute.”

“Thirdly, it is all about active involvement with key stakeholders and re-alignment of the business models towards the SDG perspective. In fact the 17 goals represent 17 innovation platforms and the aligment need to be incorporated in core business processes, the management systems and embedded as element within the company vision, values and culture. In short: the SDGs are a roadmap for business opportunity.”

“Beyond the need to meet the society’s call for greater transparency and accountability, blending purpose with profit, can generate a unique competitive advantage well-suited to fuel the organization with innovation and bring trust to consumers, investors and employees.”

Dr. Anne-Marie Warris, Director, ecoreflect @AnneMarieWarris

“There are two questions you need to ask and answer first. Why do you want to implement sustainability goals and then, where on the spectrum of reasons are you? Many will answer in one of two ways: ‘We want the business to survive long-term and this is a significant survival challenge’ or ‘Our competitors are active and we need to look like we are keeping up’ This second reason I call ‘greenwashing’.”

“If your answer is closest to ‘survival’; your start needs to be with your context at a strategic level – gathering basic information /data and understanding. Look at:

  1. Your resilience to impact from changing weather/natural disasters/ biodiversity decline/social changes/labour availability and their expectations of an employer/ fourth industrial revolution etc.;
  2. Your business environment including regulations, consumer drivers, resource availability, climate risks, developments in circular economy and global challenges as summarised in World Economic Forum Global Risk report 2019;
  3. What you know or need to know about the impact of your operations, supply chain, material choices etc. Keep it basic, while prioritising and managing what you are not measuring is challenging, too much measurement can stifle innovation and change;
  4. Critical factor – do you believe this is important?
  5. Use the information to find your strategic opportunities and risks.”

“Remember we live in a changing world so models and analysis from 20th century is no longer helpful or even valid. Look to framing from “Doughnut economy”, “Rewiring economy”; “The Value of Everything”; project drawdown on solutions to climate change, and the speed at which renewable energy is changing our society and systems etc.”

“With an outline context you can provide some guiding framework for your colleagues, suppliers and others to work collaboratively to identify how to change while remaining financially viable. Keep the process open, transparent (internally and as far as possible externally), simple and with focus on reframing old models such as Return on Investment (ROI) to allow investment in change. Leadership and flexibility are key to managing this transition as is celebration of success – high fives for staring the journey. PS If your answer was to ‘greenwash’ do not waste resources on greenwash.”

Ben Wielgus, Head of Sustainability, Informa @InformaPlc

“Sustainability teams used to have lists of hundreds of issues they were having to deal with, from diversity to slavery to carbon to privacy. All those things are important, but it was almost overwhelming. Entire industries have grown up around providing sustainability indices, groupings, clusters and frameworks.”

“But we’re seeing a substantial shift in sustainability leadership now with companies moving from a focus on trying to do everything right as often as possible to trying to do the most important things right all of the time and leaving it to established governance systems to pick up the rest. Large businesses are using the concept of ‘materiality analysis’ to rank different areas of sustainability based on the importance of them to stakeholders and the ability of the area to affect future business success. Most importantly though, they are then drilling down within those areas to identify the specific issues that they can move the global or industry needle on. Strangely enough, this is something many start-ups and small agile businesses often do far more intuitively – find their sweet spot or their niche and just do it incredibly well.”

“Take luxury spirits brand Diageo: They’ve not picked customers or society as their topic – instead they focus on Alcohol in Society as their most important agenda item and even go a step deeper to look at topics ranging from overconsumption and the link with domestic violence to the idea of celebrating life. Then there’s grocery retailer Tesco who chose to focus on People, Places and Products. Not very specific you might say, but within that they deepen their focus to Sourcing, Health, Food Waste and Packaging.”

“Both businesses still think about topics such as climate change, health and safety, ethics and privacy because they’re now fundamentals to the way businesses work. But they’ve realised they can get the biggest competitive differentiator, and make the most difference with greater focus on particular issues. It also makes storytelling easier because it’s possible to talk to people about what they most care about.”

“The UN’s Sustainable Development Goals are a great framework to start with – 17 global goals agreed by business and society as the focus of sustainable development to 2030. Very few businesses choose to tackle them all. Instead they use materiality assessment to determine which goals they really impact most and then focus their efforts on doing that to be best of their ability.”

Dr. Saskia Juretzek, Senior Manager Sustainability, Allianz @saskiajuretzek

“As a first step it is important to define your ambitions: do I want to be the frontrunner or am I happy with a midfield position? If this is defined there are several factors to be successful in your corporate sustainability strategy set up and implementation. Another key step in setting up a sustainability strategy is conducting a materiality analysis (see e.g. GRI Sustainability Reporting Standards 101, Section 1.3 and GRI Sustainability Reporting Standards 103), which starts with the definition and prioritization of stakeholders and a stakeholder survey. This helps to assess your stakeholders’ expectations towards your company as well as to identify the material topics you would want to address with your strategy and your report.”

“Authentic board support will help you to strategically drive the topic and to have the right power to implement. You will come across conflicts when implementing sustainability, so you better have C-level support. To enable effective decision-making a clear sustainability strategy should be in place, including targets and priorities. Ideally, this strategy is integrated into your overall company strategy. Set decision-making factors in business processes, e.g. integrating environmental and social factors into procurement decisions will help your colleagues to take the right decisions at every level.”

“If possible, measure your activities, use them as a value driver and relate them to your company’s turnover. Make sure to have a management team with the right knowledge and competencies in place, who supports the topic and who realizes what it needs in terms of resources (budget, time and personnel). Communicate your strategy internally to take your employees with you. External communication and commitments will also help you to further drive the topic as you will be measured based on those. Don’t start too early though with regards to external communication, to prevent greenwashing. Your approach needs to be trustworthy and profound.”

“An open company culture allows for change, which is important to support the cultural change that comes with the implementation of sustainability. An ethical foundation consisting of the right values and a critical mass of employees favoring sustainability will also help you to successfully discuss and solve conflicts when implementing sustainability. This is sustainability governance in a nutshell.”