How companies structure sustainability for success
How companies structure sustainability for success
In last month’s column, we reviewed three ways sustainability is typically organized. The three ways – Centralized, Integrated, and Embedded – morph as a company progresses on its sustainability journey. While many companies have elements of all three types in particular divisions or countries, best practices within a company’s own culture and sustainability organization gradually emerge.
The benefits of elevating sustainability in organizations are well documented. No matter where in the journey your company is now, there are a few structural tips to follow to make sustainability take hold faster, easier, and with more enthusiasm. To continue with the keys to making sustainability central to success, here are three examples for guidance and ideas.
Coca-Cola has focused on sustainability within their culture for decades. After growing and developing employee engagement and embedding sustainability more deeply, it recently named a Chief Sustainability Officer, bringing additional leadership connection and visibility to the program.
Coke is one of only 19 Fortune 500 companies that has named a Chief Sustainability Officer. Its corporate social responsibility journey began nearly a century ago, with one of its first partnerships being with the American Red Cross starting in 1917. (It is now a global partnership active in more than 50 countries through the International Federation of Red Cross and Red Crescent.) But while Coke has been on a journey for so many decades, the office of CSO is newly formed – appointed and put in place July 2011, reporting in to the Chief Operating Officer and sharing the same executive floor as its Chairman and CEO.
“We have learned one basic lesson, and that is that unless it [sustainability and business strategy] is synonymous — business and planet — it doesn't get traction,” says Coke’s CEO, Muhtar Kent. “It starts at the top, and it is driven and permeates through the entire organization from the top.”
In BASF’s case, centralized goal-setting has enabled integration within divisions, leading to an overall embedded and permeated structure and focus on sustainability globally. BASF’s sustainability structure is highly focused and embedded globally. In an excerpt from the company’s website:
Our globally responsible Sustainability Council is the decision making body for the sustainability issues most important to us. It ensures that our actions are guided by sustainable development. The Chairman of the Council is Board member Margret Suckale. The Council comprises ten heads of functional, operating and regional divisions, including the Climate Protection Officer. Regional steering committees identify focus areas in the regions, propose relevant projects and implement global decisions. Operating division units are responsible for the establishment and maintenance of worldwide networks and advance concepts for improved sustainability and product stewardship. The Sustainability Center coordinates the implementation of the sustainability strategy in all core processes, liaising between the Sustainability Council, regional steering committees and specialist units.
Newer to the sustainability journey is RPM BSG, which has simultaneously set goals in a centralized way, while also integrating sustainability best practices within teams across the organization. RPM, which offers roofing and other building products, takes a different approach. Summarizing a recent interview with Cynthia Cicigoi, VP Sustainable Initiatives and Facilities at RPM Building Solutions Group (a BrownFlynn client), here are some insights into RPM BSG’s sustainability journey.
From the onset of RPM BSG’s sustainability journey the Executive Leadership Team established a global Sustainability Leadership Council where all divisions of the global company were represented and comprised of individuals from around the world. The Council established RPM BSG’s sustainability vision and 10-year bold goals, and creates teams who are responsible for executing 1-year targets. Teams structure themselves to be reflective of the culture and management processes of that division.
This global teaming is a great opportunity for cross-divisional collaboration; different divisions bring different attributes. Teams share information and tour plants to let them talk to the people who have achieved sustainability goals there, then take back the learning. It saves reinventing the wheel. This works especially well between countries where the focus and regulations may be different.
Having involvement at the highest executive levels is also key. Executive leadership support makes all the difference and the structure ensures the sustainability vision is being achieved. In addition to presidents of each division, BSG’s CEO, CFO, VP IT, HR, and Legal are involved, with quarterly reporting to executive management. There is a passion around sustainability at RPM BSG that is seen at every level.
There are multiple ways to structure any organization around sustainability as the journey progresses. Ultimately, the higher up within the organization the vision is implemented, the more far-reaching results become. How is your organization structured around sustainability? Please let us know in the comments.