Companies that are wondering about how to take their sustainability efforts to the next level may benefit from knowing that most leading sustainability companies -- particularly the larger ones -- progressed in several stages, and over a multi-year period.
Based on our work and research with dozens of companies, I believe there are five major stages on the sustainability journey. They overlap to some extent, and not all companies started at Stage 1 (particularly those targeting the premium-price or environmentally conscious consumer), but for most, these stages do apply.
This article describes the five stages, and what characterizes each one.
1. Grassroots. Typically, the first stage is what I call the grassroots stage, in which sustainability initiatives start with a few employees taking the initiative to recycle, replace paper cups, or enable double-sided printing. Many of the highly ranked sustainability companies, particularly in the B2B space, have told us they started this way.
While individually these steps, to recycle etc., are small, they are still significant because the process of engaging employees on sustainability, and making it part of their consciousness has begun -- and as leading companies point out, employee engagement is one of the most critical factors in becoming more sustainable.
Brown bag lunches draw the volunteers to come up with ideas and help in the implementation. Green teams are formed and responsibilities are assigned, which typically falls outside of their "day job," but because these employees are so impassioned about what they are doing, they sometimes even do it on their own time.
These efforts may or may not even be visible to senior management, and eventually when they do become aware, they are often surprised at how quickly the grassroots effort has spread, and how many employees are involved.
2. Functional. At the next stage of a company's path to sustainability, one or two divisions or functional units -- typically Facilities, Operations, or IT -- gets involved in a much bigger way. At this stage, a divisional leader is setting goals and establishing accountability in his or her organization. Now these initiatives have some upper management visibility, and as a result, they get more resources to expand their sustainability efforts. Energy-efficient lighting, consolidation of data centers, and reduced packaging are examples of initiatives that reside within functional units, but generally with little visibility outside of these units.
So engagement on these initiatives is still limited to a minority of employees, and these efforts are still a minor blip on the executive radar.
3. Strategic. As more functional units are engaged, companies reach a tipping point when it dawns upon the executive team that the functional, usually silo'd efforts, need to be better aligned strategically for greater impact and efficiency.
This is exactly what happened at Dell, according to Mark Newton, Director of Sustainable Business. "It was around 2006," he said, "when executives realized that a lot of Dell's success in operations efficiency, recycling, and Design for Environment were already in place to address customers' and other stakeholders' climate change concerns." So CEO Michael Dell blessed making sustainability a key element of the company's strategy, declaring a bold goal to make Dell the "greenest technology company." Dell's sustainability efforts kicked into high gear at that time, and the company now stands proudly as a sustainability leader according to some rankings.
As the Dell example illustrates, when the CEO steps in, sustainability becomes a priority for the company. Now there is a multitude of initiatives that bubble up to the executives, who soon realize that they need a Program Office to manage them. A senior, usually sustainability-impassioned leader is appointed, and a small staff recruited to serve as champions and coordinators for the functional units. Governance roles are established, and often the Board of Directors is overseeing, and creating executive accountability, for the initiatives.
And finally, a cultural shift starts to be felt throughout the company as employees realize that sustainability is not about a few "greenies" trying to save the planet, but it's a company priority, and they all have a role to play.