The sustainability function is becoming ever important in business. Nick Rockey reports.
“If we accept that sustainability cuts across the entire business, then surely it must be entrenched within its day-to-day operations.”
The custodians of corporate image are highly resourceful when it comes to building a reputation as a good citizen or a responsible company. Business has honed its ability to ‘talk the good talk’. But can business ‘walk the talk’?
Failing to deal with the more complex and less enticing notion of embedding sustainability within a business amounts to nothing more than a charade. Yet embedding sustainability is more than just a process of backing up a good image.
HOW TO DRIVE SUSTAINABILITY
- Build systems and responses that support business interests;
- Make the business more robust to shifts in the external environment;
- Encourage a business that is resilient to unanticipated demands of diverse stakeholder interests; and
- Develop a consistent response to issues of importance.
The sustainability function forces the business to consider a range of issues that may affect its interface with societal stakeholders and, by extension, its own wellbeing. The perspective that this offers enhances the ability to anticipate change and to prepare accordingly.
Sustainability relates to the whole business, pervading all business functions, from HR to production, and all levels of employment, from the CEO to the office assistant. In the same way that every person employed has a role to play in supporting the profit motive of the business, so too should each employee support the business in its endeavour to act responsibly and sustainably.
Clearly the role that each employee plays in making the business more sustainable differs considerably. Executive and senior management figures engage with strategy and policy matters surrounding sustainability and set the standard for appropriate (ethical and responsible) behaviour in their organisation.
Less senior employees are responsible for monitoring, regulating and improving their behaviour according to the organisational standards that have been set. But no matter how significant or minor the role is, every individual is affected some way or other.
The importance of entrenching sustainability as the way business is done is all the more apparent when one considers the many well-known examples of breakdown in trust between business and society. Anticompetitive behaviour, breaches of corporate governance or excessive risk taking is often perpetrated by just a few individuals within companies that employ thousands.
Yet the cost of bad and invariably unethical decisions can amount to billions. In certain cases, large and established businesses have not survived the ensuing scandal and financial fall-out. These exceptional examples alone justify the need for a value system or way of doing business that is morally acceptable and widely adopted.
At a more mundane level, businesses are confronted with the way the business interfaces with staff, customers, suppliers and the like. So once the appropriate course of action is decided upon, all individuals affected by that decision should respond accordingly.
If we accept that sustainability cuts across the entire business, then surely it must be entrenched within its day-to-day operations. Unless it is integral to how an individual works, sustainability becomes an unwanted burden and a perceived waste of time. The challenge therefore is to inculcate responsible decision making within the business’s DNA.
Embedding sustainability requires a conscious effort to drive behavioural change; a process that takes time and is continual. It is easy for a business to get started on the wrong foot. For many executives the first real exposure to sustainability comes in the form of a raft of new reporting requirements, codes and standards to which the company is expected to conform. The natural reaction is to set up structures capable of producing the required report(s) and completing the incessant flow of compliance forms.
This symptomatic approach to managing sustainability is not only a headache for the business but doesn’t achieve any real benefit. Furthermore, as each year comes around the same requirements and frustrations re-occur.
By focusing first on reporting and compliance to codes and standards, one is putting the cart before the horse. In the established field of financial reporting, the first step is to develop the approach and plans that generate profits which are only then reported on.
The same order of events should apply to sustainability. Start by determining what sustainability means to the business. To achieve this, define the ‘material issues’ that are to be managed and reported on. ‘Material’ implies that the way the issue is managed has a significant impact on the business, now or in the future.
Issues that don’t or are unlikely to have any real impact on sustainability should be de-emphasised. All too often the readers of sustainability reports are confronted by a plethora of data that has not been structured or prioritised properly.
The good news is that businesses already address many sustainability issues, which more often than not are of material importance to the business. Training programmes, employment equity and HIV/Aids initiatives are frequently well established, particularly within large companies.
By undertaking an analysis of what is being done and where gaps exist, a better sense is obtained of where and how the sustainability journey should start.
The sensible approach is to focus the sustainability effort, at least initially, on divisions and business partners where influence and risk are greatest. Companies with high-profile brands are vulnerable to being exposed by the poor practices of their partners, particularly when these partners are linked to the company brand.
It is therefore in the interest of the business to ensure that partner practices conform to accepted standards.
Sustainability is an evolving field with shifting priorities and emerging issues of importance. The management of issues already familiar to the business can be advanced each year while new issues are gradually introduced. The speed of advancement will depend on the resources made available to drive the various issues and this will vary from one company to the next.
Ultimately, if the business shows itself to be aligned with the fast-growing interest in societal good, employees will feel better about working for a company where their personal values do not have to be left at the door as they enter the building for work each day.