Sustainability is increasingly becoming a necessity for businesses due to changing perspectives around the world. It is becoming even more critical for companies to address the gap between knowing and doing by embracing sustainable business practices. The role of sustainability in industry in driving change now more than ever, change gives purpose and people whether it be employees, investors, supply chain or customers buy into purpose.
We have come to expect that organisations are more sustainable and more environmentally friendly with recycling of paper and waste, lights on sensors, reusable water bottles the norm in many workplaces. Also, as the drive for Net Zero grows, government strategy has been turned into policy in many parts of the world, organisations large and small are starting to embrace it with approximately 60% of FTSE 100 companies joining Race to Zero, but for many observers how soon is now? Is it quick enough or should it have been sooner?
As the expectations on corporate responsibility increase, and as transparency becomes more prevalent, companies are recognizing the need to act on sustainability. Professional communications and good intentions are no longer enough.
Here is a list of just some of the sustainability initiatives being seen today:
- Tree planting to offset carbon footprint
- Greener workspaces
- Fleets moving from traditional Diesel and Petrol to PHEV and EV
- Transparent reporting about carbon emissions data in Company Reports
- Supply Chain auditing regarding Net Zero
- Recycling of paper and waste
- Cycle to Work schemes
- Paperless policies
Just like with overall strategy there is no “one right solution” on sustainability. The best solution depends on the ambitions and stakes at each company. Here are a few useful actions for all management teams to improve sustainability practices.
- Align strategy and sustainability: Management need to make sure that the strategy of the company and the sustainability efforts are aligned. Often, we see divergence, which of course makes the sustainability efforts fragile, lacking real commitment and prioritisation. But there are many good examples. One such example is Unilever’s Planet Positive initiative, designed to give more than the company takes from the planet through plans to protect and regenerate 1.5 million hectares of land, forests and oceans by 2030. Unilever says that is more land than it already uses to grow the renewable ingredients included in its beauty and personal care product range. And by 2025, the company says any plastic used in its packaging will be recyclable, reusable, or compostable.
- Compliance first, then competitive advantage: First and foremost, companies need to address compliance, which often relates to regulations in waste management, pollution, and energy efficiency as well as human rights and labour responsibility. Compliance is also an issue that concerns investors. A recent survey suggests that investors increasingly shy away from compliance risks. According to the 2021 EY Global Institutional Investor Survey, 74% of institutional investors said they were more likely to divest from companies with poor sustainability performance, while 90% said they would now pay more attention to a company’s sustainability performance when making investment decisions.
- Reactive to proactive: Many of today’s leading companies in sustainability, like Nike, Coca-Cola, Telenor, IKEA, Siemens, and Nestlé, have stepped up largely as a consequence of a crisis. Oil giant Shell, already the focus of activist protests over drilling in the Arctic, faced boycott calls due its purchase of cheap Russian crude oil after Russia invaded Ukraine in February. Shell rapidly backed down and said it will exit all its Russian operations.
- Engage the organisation as a whole: One good example of engagement is Salesforce, a company so committed to making every employee and department accountable to sustainability that it recently enshrined it into its core values. Now that sustainability is part of its DNA, the company can leverage its full might to advance climate action and further operationalise sustainability across its entire business.
Sustainability and ESG without a focus on people will take organisations down a rabbit hole if they are not only considering the impact their practices are having but the connections, they make with ESG strategy and research proves this. WeSpire’s State of Employee Engagement study 2021 (https://www.wespire.com/state-of-employee-engagement-2021/) showed that 93% of employees who said that their company was creating a positive impact in terms of Sustainability were planning to stay in their jobs and according to PwC (https://www.pwc.com/us/en/services/consulting/library/consumer-intelligence-series/consumer-and-employee-esg-expectations.html) 84% of employees are more likely to an organisation that stands up for the environment.
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