A successful journey towards sustainability
5 Key recommendations from 53 executives
In 2020, we interviewed a cross-sectional sample of 53 Senior Executives (GM, CEOs, HR Executives and CSR Officers) in global companies, consulting firms and NGOs. The goal was to understand what triggered their personal interest for sustainability, how this topic impacts business and HR strategy and how they have succeeded in their sustainability journey.
The rich patchwork of information gathered from these interviews highlighted the different levels at which companies are engaged in their sustainable transition. These companies ranged from global and strategic initiatives to local and disconnected initiatives.
Despite this diversity, the motivation of these companies to boost sustainability seems to have some shared roots, notably:
Rethinking the social and environmental impacts of companies in the COVID 19 sanitary crisis
Looking for a mindful purpose which attracts, convinces, motivates and engages employees, clients and stakeholders
Anticipating the new trends and expectations pushed by clients
Foreseeing and shaping their new competitive landscape: sustainability as a strong innovation and differentiation driver
Reinforcing the delivery of better and sustainable bottom-line results
Ensuring regulation and compliance
The recurrent key recommendations which resurfaced at each interview set out a clear set of rules which each CEO/CSR Executive should consider when managing their sustainable journey. The goal of this article is thus to highlight these recommendations and bring, when possible, some concrete examples, which will generate further exchanges and ideas.
1. Deeply connect sustainability with your company’s purpose
Climate change is undoubtedly the result of human activity since the mid-20th century. The strong connection between climate and business is today at the core of the sustainability commitment of most of the companies. Interestingly, a third of the companies interviewed started this transition with a deep questioning. Only from there were sensible decisions on the future of the company taken. The journey towards sustainability requests a mindful purpose which integrates sustainability at its heart: Why do we do what we do? Why do we exist? How do we contribute to a sustainable world? How do we restore what we have damaged? Results of this questioning are mindful purposes which go beyond financial targets and exponential growth.
These purposes are becoming decisive to attract, motivate and engage talents, not only millennials but also at an executive and leadership level. Some companies have experienced failed recruitments where the insufficient commitment level of the company in terms of sustainability was mentioned as one of the main reasons for not joining the company.
2. Embed sustainability in every strategic goal and boost its impact
The second key advice was strategic integration. Sustainability cannot be an isolated goal of the company. It should be embedded within all other accomplishments. Consequently, this shift enables a better balance between short, mid and long-term goals, in turn increasing long-term financial investment. Although this appears to be a monumental change, the situation is urgent and business relationships with sustainability should no longer be a "nice to have" but a "must have".
Two concrete examples highlight the importance of this radical shift.
First, it is fundamental to input sustainability within the decision-making at the top of the company. Indeed a decision can no longer be taken without addressing the question: "what environmental and social impact will this decision have and how can we reduce it to a strict minimum and/or make sure it has a positive impact?" To illustrate this, a global manufacturer has explained how major leadership decisions were reviewed at executive team level following a "3Ps" triptych rule: People, Planet, and profit. Weighting what impact a decision could have on each of the 3 Ps is a way to step back and bring more awareness into the decision-making process. Deep conversations were engaged once this approach was implemented.
A second example is the profound restructuring of procurement that has to be done by most of the industrial and consumer goods companies that we interviewed. They need to switch to a sustainable procurement process. For instance, a global high-end food manufacturer switched from non-sustainable agricultural raw materials, grown on deforested land, to sustainable raw materials. They developed a new collaboration model over the long term with a few selected south-American suppliers who committed not to use deforested land. This requested a complete review of their suppliers base, and resulted in some additional material costs which were considered acceptable given the expected long-term benefit.
3. Do not underestimate the whole transformation journey
Almost all the companies we met had embarked on this sustainability journey for quite some time. We were told inspiring stories by energetic and passionate executives who work for iconic and very much respected global companies and for smaller but no less committed companies.
All of them shared the same experience: moving to a sustainability centric company does not happen overnight. It should be considered as a whole and radical transformation of the business and operating model. It thus compels people and financial investments over the long run to follow guidelines. These guidelines being:
Start this transition from the top as the commitment of the CEO, backed by investors, as well as the whole board and executive teams is a key to success. This commitment starts with the right level of conviction and awareness.
Repeat and repeat again the urgency, based on facts and figures, enabling thus the process to be accelerated.
Initiate this transition from various dimensions and perspectives (values, strategy, employees, regulation, operation ...) depending on the company situation.
Acquire and develop the right competencies, pushing for training and continuous learning at both scientific and business levels but also making sure to acquire the right talents.
Be supported by a network of strong and convinced ambassadors across all departments to amplify the messages, convince employees and spread the change, including on behaviours.
Reflect it within the individual and collective performance measurement, specifically at top executives level.
Be humble, brave and persistent!
4. Place collective intelligence and innovative collaboration models at the core of the transformation journey.
Some of the interviewed companies have succeeded in their journey to implement a new more sustainable business model by changing their pre-existent management style.
They have embraced new models and methodologies to improve speed both in innovation and operation, such as design thinking, serious games or agile methodologies. Therefore enabling to leverage collective intelligence, talent diversity and make the change stick.
A powerful example of collective intelligence is this employer-brand initiative led by the CHRO of a global BtoB services company. She launched a 15-month process to design a new employer brand for the web site. Eventually, this process turned out to be a great way to work on the DNA of the company. Through a number of carefully chosen tools such as Blue Ocean strategy workshops, interviews of Excom members, focus groups in different countries, 3000 interviews of employees, this project resulted in a surprise for a lot of employees: “We are more similar than different”. The new tagline emerged, was launched and today serves as a strong basis for the design of a more sustainable strategy!
In order to make this type of initiative happen and succeed, the majority of the interviewed companies pointed out the crucial role of a network of ambassadors. Notably, the ambassadors facilitate the shift in terms of ways of working and enable more collaboration across departments. They build on new sustainable cross-department initiatives and accelerate the spread of the change.
5. Find the right engine to boost the transformation
Several "engines" to boost the transformation were activated within the various companies.
A first key insight was the young generation, which should be empowered to lead the movement. An increasing number of millennials are already convinced about the urgency of transitioning to sustainable business models. As shared within the first advice, sincere and efficient commitment to sustainability is becoming strong criteria when deciding about their employer. The people we interviewed are seeing this trend getting more and more traction whatever the industry sector or the size of the company.
Secondly, Human Resources executives have a major role to play in boosting sustainability in their company. So far, interviews showed a huge disparity in that respect. It is imperative for HR executives to think and act bigger. Their role is crucial for the company to transform. HR executives could be more instrumental than they currently are. Beyond recruiting the right talent, working on Diversity & Inclusion or Ethics & Compliance, they could also amplify the change by directly working at the top with the CEO and the Leadership Team. The focus is to embed Sustainability into HR strategy and potentially means also some serious Corporate Culture adjustment.
These 5 recommendations undeniably demonstrate how sustainability should be embedded at all levels of a company, from culture to values, from strategy to operations, across stakeholders, functions, hierarchies, and generations.
Every action should be evaluated with a sustainable perspective: How should we communicate with investors? What does sustainability mean for the creation of a new service?
Sustainability should be considered as an on-going and constantly evolving conversation, embracing new business opportunities, new people, customers, and stakeholders’ expectations and new scientific progress. Sustainability is an urgent journey which never stops.
Along with this transformation, sustainability offers a huge opportunity to look at the company ecosystem with a fresh perspective, extending the classical stakeholders’ scope to non-governmental organisations, states, technological partners, local communities...This is a way to create much broader exchange and collaboration groups.
These interviews were a fantastic opportunity to dive into the topic of sustainability in the business world. But this is only a snapshot!