3 Best Practices for Managing Corporate Sustainability Projects

Forrester has just completed interviews with leaders at 15 large multinational companies who are involved in their company's sustainability strategy and programs. One of the clear takeaways from our research is the need for coherent governance of sustainability initiatives.

In the course of conducting these interviews, we've identified three critical categories of governance best practices.

1. Setting goals. Targets for sustainability initiatives like reducing carbon footprint and decreasing waste must be set with a clear understanding of the here & now baseline.

We heard repeatedly that executives were eager to set goals but often did not know what the current situation was. This makes assessment of the current situation a prerequisite for goal-setting. We heard about carbon reductions, decreasing solid waste, reducing energy consumption, and, less often, lowering water usage.

2. Creating incentives. To engage executives and employees, we see more companies tying bonuses to sustainability metrics. Most often this is happening only at the senior executive level, like the one company who told us "Our CEO's incentive compensation includes resource consumption reduction goals."

Direct bonuses are the most typical incentives; some companies are using indirect means like funding sustainability projects chosen by employees.

3. Formalizing structure. In our surveys, two-thirds of companies tell us they do not have an formal executive ownership in place for sustainability. And yet in our interviews, the need for defining roles and responsibilities comes through loud and clear.

Identifying owners for sustainability strategy, organization, process, and technology are the critical components (see chart below). When the Chief Sustainability Officer role exists, it should be a mediator across these components, connecting and reducing friction between the functional owners.

figure 1

The takeaway for suppliers of sustainability software and services? Your traditional customers in the IT organization may be peripheral to the sustainability technology decision process.

It will most likely be business leaders who hold the budget for sustainability technology. The business and IT will come together around two important capabilities: integration with existing systems, and analytic capabilities. A sustainability software solution must be able to integrate with existing systems in, e.g., ERP, building management, and supply chain.

Just as importantly, it must be able to aggregate, normalize, and analyze data from those sources to provide actionable insights, not just a pretty dashboard. We continue to track the corporate buyers and providers of sustainability technology solutions, and welcome your inputs in the comments.