The 3 states of sustainability and how to get back on track
The 3 states of sustainability and how to get back on track
The results of a 10-year research project, examining the journeys some companies take when implementing sustainability initiatives, and more specifically, why they fail, was released toward the end of 2017.
The report, "An Inconvenient Truth: How Organizations Translate Climate Change into Business as Usual," was prepared by Christopher Wright and Daniel Nyberg. The authors studied the strategies and challenges taken by five major corporations in Australia as they incorporated sustainability initiatives into their business operations. The corporations were in different industry segments, including banking, manufacturing, media, insurance and energy.
Climate change is, of course, a significant issue around the world. But in some areas, such as Australia, it may be even more pressing. Because of its geographical position near the Antarctic and polar regions, Australia is experiencing more negative impacts of greenhouse gases and climate change than other areas of the world.
This includes such things as hotter temperatures, heat waves, rising sea levels, the death of vegetation both at sea and on land, and extreme droughts. Although this is happening in other countries as well, it is not occurring as much or as fast in countries in central areas of the globe as it is in Australia.
The authors and many others suggest that corporations must play a significant role in addressing climate change, especially now that the United States has vacated that leadership position. Further, many of these organizations are the key contributors of greenhouse gases. Steps that they take reducing those gases and promoting sustainability can show other corporations how this can be accomplished and could have a significant impact on the environment now and into the future.
However, the researchers’ hopes that major corporations will save the day essentially evaporated as a result of their study. In fact, it appears to support something that British entrepreneur Richard Branson has been quoted as saying. Discussing the role of corporations in addressing climate change, he somewhat pessimistically said, "Our only option to stop climate change is for industry to make money from it."
Programs I have conducted myself with organizations prove that corporations can make money, usually by reducing operating costs, when sustainability initiatives are implemented. So we do know they can "make money from it." The issue appears, based on this research paper, that many organizations just don’t stick to the program long enough to realize it.
According to the study, corporations travel through three stages when they first decide to become sustainability focused. The first phase is called "framing."
At this stage, top executives argue that addressing climate change and taking steps to combat it are strategic business issues. They may even be a bread-and-butter issue. Starbucks, for instance, which makes its money selling coffee, sees serious threats ahead for its business. This is because, in some coffee-growing areas of the world, it's getting too hot for coffee beans to grow.
Business executives see the framing phase as an opportunity, a time to protect their stockholders and present the business case for sustainability as a "win-win." They also may be hoping to prevent any new government regulations from being implemented that could hamper their business operations.
Once the program is up and running, the next stage the corporations in the research study entered was called "localizing." View localizing as the actual "doings" of sustainability.
Now these corporations are finding ways to implement sustainability in every part of their organization. They are selecting environmentally preferable products and services; taking steps to reduce water, fuel and energy consumption; and taking advantage of online dashboard systems to help measure and monitor their use of natural resources, something they likely had not done before.
During the localizing phase, companies also communicate with their employees, stakeholders and stockholders about the steps they are taking. They also may be turning to their suppliers and asking them to get on the sustainability bandwagon as well.
This is happening with major retailers such as Target and Walmart. One reason they insist that their vendors practice sustainability is that they often find a cost savings — savings that can be shared throughout the supply chain.
The final stage is referred to as "normalizing," and unfortunately, this is where the sustainability efforts start to fall apart, are rolled back, or possibly are abandoned altogether. Why does this happen? Among the reasons:
- Top executives make compromises between business needs or market conditions and sustainability initiatives. The result is that the sustainability program is weakened, which makes it easier for executives to make the next concession. Eventually, the entire sustainability program may start to come apart.
- Many times, these sustainability concessions occur because the company is having financial troubles. When situations such as this happen, many corporate executives institute a "back to basics" mentality. These are very tight business-operating parameters, and invariably sustainability initiatives are not included.
- And last, some stakeholders start asking, "Where’s the ‘win’ we were promised?" Concessions and business downturns have their own way of dismantling sustainability programs, but if stakeholders, including top executives, have given up waiting for the benefits to roll in, this typically becomes the final nail in the sustainability coffin.
There are ways to avoid the normalizing phase and get back to localizing, operating the business more sustainably. Sometimes, all that is missing is information. Organizations often do not realize that they are already experiencing some benefits of sustainability, such as cost savings. It can take a while for these savings to become evident.
Additionally, the benefits may be less tangible, such as employee turnover decreasing; more people wanting to work for the firm; and absenteeism declining. The best way to ensure this information comes through is to establish key performance indicators (KPIs) for the program from the very start. A dashboard system can make monitoring these KPIs easier and less time-consuming than in years past.
And finally, be patient. When it comes to sustainability, the long-tail strategy wins out.