by Mathias Fahy, Sustainability & Circular Economy Consultant, Möbius Business Redesign
Managing a successful sustainability program is a mix of why you do it, how you do it and eventually what you do.
Driving a sustainable business is becoming one of the top priorities. These past few years we have seen many multinational companies step up their efforts. However, few organizations succeed in getting business value out of their sustainability program – only 2% of programs meet or exceed expectations, according to research by Bain & Company ("How to get breakthrough sustainability programs?”, 2017).
Let’s start with the ‘WHY’
Author and TED speaker Simon Sinek states that “every business knows what it does and how it does it, but most don’t understand or articulate why they do it. WHY is not about making money, that is a result. WHY is a purpose, cause, a belief. It is the very reason your organization exists.”
As is the case for each successful change initiative, you should clarify WHY you wish to set-up and implement a sustainability program. Organizations, and especially sustainability managers, already know it’s important to link sustainability to the business strategy, the strategic position or even key strategic initiatives. This, however, is not enough. Sustainability leaders clearly find a sweet spot by linking sustainability (be it environmental or social stewardship) to WHY they exist as a company (their purpose, their mission) and WHY they will still exist in the coming years.
Building up to business outcomes has to do with the ‘HOW’
Sustainability executives are not getting value out of sustainability programs because sustainability is commonly treated as a topic ‘next to the business’ – a must do – whilst a sustainability program needs a solid program management approach like any other business related and culturally dependent topic (e.g. innovation or operational excellence).
The four key ingredients for a successful sustainability program
- A clear sustainability strategy focused on a limited number of highly material topics which are relevant to your stakeholders and can have an impact on the long-term success of your organization.
- Translating the sustainability strategy into key targets both on a strategic level and towards day-to-day operations, developed as stretch targets on the long-term. Communicate the key targets publicly as a commitment to the stakeholder community.
- Driven by senior leadership and middle management: translate the strategy and key targets into a roadmap, consisting of a limited number of breakthrough initiatives to build results and a myriad of smaller initiatives to build the cultural change.
- The purpose and return on investment of the sustainability program is identified and clearly understood within the organization.
Additionally, it is highly relevant to build a strong network of well-suited partners around the identified sustainability issues/challenges/targets. Typical sustainability issues nowadays can include ‘closing the digital divide’ or ‘tackling the education gap’. Lots of these challenges require a systemic approach which cannot be handled by one player alone.
The ‘WHAT’: a limited number of key topics to focus on
It is important to focus on a limited number of topics which are relevant to both your stakeholder community and the success of your company (in line with the WHY of your company). Typically, the sustainability issues to focus on are largely dependent upon the sector, environment and geographical location your organization operates in. Different sectors are struggling with totally different sustainability topics.
The good thing about sustainability is that company information, performance benchmarks and other reports are widely available. The McKinsey Global Sustainability Benchmark, the Sustainability Accounting Standards Board, Carbon Disclosure Project are all very relevant, yearly updated publications on ‘material topics’ for various organizations in different sectors.
Performing a materiality assessment and reporting on it though is not the same as pinpointing the key sustainability focus domains for your organization. Here are two takeaways:
- A sustainability program should be driven by the focus on business critical issues and the ability to change on the fly when new information becomes available. GDPR popped up in the top three sustainability issues for many organizations out of nowhere. The key here is to link sustainability issues to the strategic agenda of senior management, to think about sustainability in terms of horizons (what should I focus on the coming year, the coming five years and the coming 10 years) and to allocate resources across topics.
- An organization thrives by the welfare of two crucially important stakeholder groups: the customers that believe you and the employees that serve them. Getting into a (why not continuous instead of biennial) dialogue with these groups keeps you up to date with what slumbers. Putting customers and employees higher on the sustainability agenda helps to build customer and employee engagement and builds the relationship with the way the organization operates, instead of only relying on the product or service performance.
About the author
He has a particular interest in setting up effective sustainability programs and linking these to the core business, usually built around circular economy principles.
Curious to learn more about how to set-up and manage a world-class sustainability program? Join our webinar on March 31 with Mathias Fahy and Helen Versluys, both sustainability and circular economy experts at Möbius.