Formal CSR programs measure performance against standards. But embedding sustainability into a culture also requires intangibles such as engagement and innovation. Difficult to quantify yet impossible to ignore, the human factor is finally getting its due.

Standardization is a prerequisite for getting any industry off the ground. Imagine our frustration if light bulbs didn't fit into lamps or if there were no common sizes for clothing. Without standards, we wouldn't be able to drive, fly or follow GreenBiz.com on our iPads. Similarly, frameworks such as the Global Reporting Initiative and LEED certification have made it possible for more than 5,000 companies to voluntarily report on sustainability, and for green commercial projects to permeate over 30 countries.

When you set standards, you get results.

But something curious is emerging. Companies are increasingly recognizing that performance metrics tracked by formal sustainability frameworks cannot tell the full story. Consequently, seasoned corporate reporters such as FedEx and Kimberly Clark are moving beyond one-dimensional CSR reports toward holistic programs that weave sustainability thinking throughout their organizations. Speaking from my own experience inside multinationals such as JCPenney, employee engagement around sustainability is moving up the priority list.

Even small and mid-sized enterprises (SMEs) that may not be interested in formal CSR reporting are seeking ways to channel employee's green interests into strategies for saving money and bolstering brand loyalty. As Jim Thomas, JCPenney's CSR vice president told me, "Smaller organizations are not necessarily going to need the tools designed for Fortune 500 companies. A good approach for any company is to have at least one green story to tell." Employee engagement gives everyone a chance to become part of a company's green story.

As enterprises of all sizes seek opportunities to leverage sustainability as a competitive advantage, it is the space called "engagement" where sustainability offers seriously untapped potential.

How Employee Engagement Pays Off

Sustainability is a good strategy for achieving near-term savings via conservation and energy efficiency, but it takes engagement to achieve longer-term benefits of innovation and retention. Because sustainability programs are essentially about change management, engagement is a key ingredient to success.

Towers Watson, a global HR and performance improvement company, defines engagement as:

• The rational component (Think): Employees' support and alignment with the organization's strategy, goals, culture and values.
• The emotional component (Feel): The degree to which employees feel an emotional sense of belonging, attachment and pride towards their organization; includes a willingness to recommend it to others as a place to work.
• The motivational component (Act): Employee's willingness to exert extra effort and go above and beyond their normal job responsibilities in order to help their organization succeed.

Authentic engagement programs that empower, recognize, and encourage personal growth can save companies a significant amount of money. A recent study by Towers Watson looked at engagement levels across 50 global organizations and found that operating income in high-engagement companies improved 19.2 percent over a 12-month period. In low engagement companies it declined 32.7 percent.

Next page: The importance of top-down support