Chief Strategy Officers Recommend 4 Steps for Developing a Corporate Sustainability Strategy
The more natural disasters and dire predictions associated with climate change, the more it becomes clear that sustainability should be a top strategic priority for modern companies. In fact, for many companies, the role of the chief strategy officer (CSO) is evolving to assume the sustainability responsibility with the intention of tying sustainability into the future of the organization.
On its own, “sustainability” is a nebulous term. Its definition can range from strictly climate change-related matters to a broader encapsulation of all things environmental, social, and governance (ESG). Even once defined, tying sustainability to enterprise value is more difficult than illustrating the total addressable market for a new product or feature.
Organizations may feel more comfortable investing in initiatives with tangible outcomes than in the intangible goal of “sustainability.”
Thus, the task for today’s strategy professionals with regards to sustainability: Make sustainability concrete.
1. Build a business case
Initiatives surrounding concepts like sustainability fail when they are grounded in rhetoric, not data. When an issue is framed in terms of opinion, it becomes an ideological debate; when framed numerically, it’s harder to dispute. Leaders looking to promote sustainability within their organizations should plan to do so as concretely as possible.
Showcasing the benefits of sustainability initiatives can also be done in terms of showing the risks of taking no sustainability efforts—highlighting the many stakeholders who care about sustainability, and the effects of alienating them.
Conveniently, most key stakeholders today care about sustainability. Employees—especially millennials and Gen Z—have repeatedly demonstrated their reluctance to work at companies that don’t prioritize sustainability. Investors care too; McKinsey recently labeled sustainable investing as “the new normal.” Consumers, likewise, are willing to pay more for sustainable products.
Inventory the statistical risks associated with non-sustainability. Consider including examples of businesses that have suffered because of their unwillingness to act.
2. Use checklists from credible institutions
CSOs recommend using publicly available checklists from credible sustainability institutions to track your company’s current status and progress. One very credible organization is B Lab, a nonprofit network focused on making all business “a force for good” Founded in 2006, B Lab has issued more than 5,200 B Corp Certifications to businesses around the world.
The B Corp standards are useful both in the ideation phase and in the execution phase. Whether or not you end up pursuing B Corp Certification, the framework for B Labs’s Impact Assessment can function as the skeleton for your organization’s own sustainability plan.
The added benefit of B Corp Certification is that it’s a rigorous, globally accepted benchmark for sustainability commitment throughout an organization. It’s a signal to all stakeholders that sustainability is more than a talking point for your company.
3. Expect to start small
CSOs in our network describe a “baby steps” approach to developing their internal sustainability operation. What has often started as a sub-role assigned to a CSO or chief risk officer has grown into a multi-person team once tangible results could be captured and illustrated.
Thus, it is important for sustainability leaders to identify which sustainability initiatives will carry the greatest impact and prioritize accordingly. Which must you invest in today? Which can wait until your sustainability operation has more resources at its disposal?
Consumer Market Researcher and UCLA Professor Emmanuel Probst explains that brands today must actively demonstrate to consumers the steps they are taking toward sustainability goals. Determine your overarching purpose around sustainability, then break it down into short-term steps to track and show your progress.
4. Educate customers
Sustainability efforts should go beyond the confines of your organization. As your sustainability efforts come to fruition, track the strategies and results, and turn them into educational resources for your customers.
This will have a twofold benefit: 1. It shows your customers that you are committed to sustainability at an organization-wide level; and 2. It gives your customers tools by which to further their own sustainability efforts, opening the possibility of generating network effects among customers and suppliers.
Whether you work with individuals or businesses, promoting sustainability resources maximizes the impact of your internal initiatives.
Sustainability is a pressing concern from many different angles—from the most obvious environmental perspective to its impacts on recruiting, consumer engagement, and investor interest.
The task for modern businesses is to turn sustainability into a concrete issue. They can do so by illustrating the risks associated with ignoring sustainability, using credible sustainability principles as a guide, enumerating the many facets of sustainability, prioritizing the most impactful initiatives, and meticulously tracking and sharing results with stakeholders.