Corporate Interest

The five-minute sustainability brief for CEOs

7 April 2011

If you think sustainability is none of your business, you are wrong.

Written by Louise Gardiner, a corporate sustainability and stakeholder engagement expert with 10 years of international experience in the sustainability field.

She is also founder and managing director of First Principles Sustainability Services, a research and advisory firm based in Cape Town, South Africa.

There is no one-size-fits-all approach to sustainability. There isn’t even consensus on the name. The multitude of different terms, including corporate social responsibility (CSR), corporate citizenship, green business, and corporate social investment, can confuse anyone.

But if you think it is none of your business, you are wrong and you’ve got a blind spot. The good news is that this can be fixed pretty quickly.

First, the name: sustainability. This term has won out for the time being. It also speaks to building a successful and resilient business. Things like corporate social investment and black economic empowerment fit under its umbrella. If the other terms come up at a board meeting or cocktail party – relax – go with it. Much time has been wasted on semantics and the fundamentals are the same.

So what are the fundamentals? There are four you need to know about:

• Incorporating wider stakeholder perspectives into the way you think about your business and industry;
• Managing environmental and social performance in your operations, services, and supply chain;
• Anticipating risks and business opportunities that come from environmental and social problems; and
• Grounding your business in good governance, transparency and accountability.

Now, let’s dispel a few myths:

Sustainability is something new that society and government is requiring of my business
Yes and no. This is an old reality with a new voice. Yes, new regulations like the King III requirements in the Companies Act demand a specific kind of action, i.e. sustainability committees and integrated reports. But the imperative for sustainability is more about the nature of the world we live in.

Sustainability goes to the heart of adaptation and smart risk management in the face of climate change; energy and water shortages; ethical consumerism; resource depletion (read manufacturing supplies); poverty, and the rapid loss of our natural environment. When resources run out and communities falter, your supply chain and your customers will let you know about it. But by then it may be too late for you to adapt.

Sustainability is emotional, tree-hugging stuff that has no place in serious business decision-making
Yes and no. The emotional tree-huggers certainly have a strong voice on the issues and usually less knowledge about business. But it’s your job as entrepreneur and CEO to integrate that voice appropriately – the same way you balance financial realities, HR, suppliers, business systems etc.

Take a deep breath – the tree-huggers can’t do your job for you, but they can add perspectives and ideas you couldn’t bring on your own. Recognize their value and make them your friends.

Sustainability is something I can outsource to the experts or to eager staff
Yes and no. Passionate employees are major engines for innovative “œgreen” ideas and projects. There are also a growing number of good consultants and independent experts that can help you quickly and efficiently identify the right issues and solutions to focus your efforts.

However, no-one knows your business like you do. Leadership is meant to lead and executives need to have their fingers on the pulse. Your role is to:

• Get your company focusing on the right issues;
• Allocate sufficient resources;
• Check performance;
• Reinforce the right business culture; and
• Catalyse innovation

The companies that have mastered sustainability use external expertise, internal passion and clear corporate strategy to maximize the business learning and benefits of sustainability.

Anything less than strong leadership on sustainability will waste time and resources and create frustration on the part of staff who believe in the need to change.

Here are seven things you can do to build sustainability into your business:

1. Put sustainability on the executive and board agenda. Focus on identifying issues, risks, and business opportunities that your company needs to address. Require a performance plan.
2. Create roles and responsibilities – but not silos! Sustainability is an exciting topic that can activate morale and innovation across your business. Don’t isolate it in one chain of command. Make all executives accountable for an appropriate piece and create a simple integrated action plan that divides activities and responsibilities between different teams and departments.
3. Get teams talking often and honestly about what has been achieved, what’s working, what’s not working and why, choosing the next priority and focusing on product and service innovation that adds value to people and the business.
4. Decide how much time and effort should go into this. Set boundaries you’re comfortable with, based on the size of your business. Let everyone commit this amount and be part of the (r)evolution. Employees are already expected to allocate a portion of their time to admin tasks, HR, and client relationships. Give a clear signal about things that each employee should be conscious of in their day-to-day work and offer them opportunities to run with some of their own ideas.
5. Expect to learn. This is a rapidly evolving field with a multitude of issues at stake. It’s likely there’s an entire horizon you weren’t paying attention to, with major opportunities appearing.  Like you already do in other areas of your business. Find ways to learn efficiently and effectively. Training courses, local experts, and case studies from other companies are just some of the resources available to you.
6. Drive towards data. The gold rush is on to capture and measure the value in sustainability: business value as well as other types of value. You and your employees are in prime position. If there’s gold to be found in your business, don’t you want to be the one that finds it?  Challenge your teams to measure what they do – from baselines to changes in environmental, social and business performance. Require constant feedback and discussion so that your staff are excited about finding the value. Ask simple questions – what is your team doing on the sustainability front? What is your hypothesis? What are the numbers telling you? What do you recommend doing going forward?
7. Be ready to do the right thing. Let’s face it. There’s a ruthless side to doing business. Can your business afford to be ethical? Can your business afford not to? You can’t be a sustainable company if you tolerate dishonesty, corruption, and illegal or irresponsible behavior – including environmental and social irresponsibility. Such choices will affect your business down the line through some sort of cost or penalty. The biggest cost to unethical businesses is when they lose the trust of their employees and business partners. If you don’t have good values, they will treat you accordingly. Trust and goodwill are intangibles that can make your business soar. Yet very few organizations actively invest in them. Many of the best ones do.

The bottom line is you are in charge of the direction of your company. You are also the one deciding – consciously or unconsciously – whether there is a red, orange or green traffic signal for your company and staff to take on the sustainability challenge.

What color is your company?