November 9, 2017
Five Ways to Lead the Sustainability Journey
It’s abundantly clear that both the corporate sustainability function and the role of the sustainability leader are transforming. In just one generation, companies have gone from obligingly checking off a list of regulations to embracing sustainability as a key component of their business strategies.
From developing products that directly address climate change, aging and other difficult challenges to building business models that empower under-served groups, opportunities abound for chief sustainability officers (CSOs) to make a meaningful and measurable impact on their companies, their communities and the global environment — especially when the boss has their back.
As our recent survey with leading CSOs reveals, tone from the top can make a huge difference. More than half (51%) of the survey respondents who described their sustainability functions as having a “high impact” reported that their CEOs are “personally vested” in sustainability.
In addition to gaining buy-in from top leadership, CSOs must be able to build rapport across all levels of their organizations. In fact, 61% of our respondents agreed that the ability to collaborate effectively across functions is an essential attribute for sustainability teams.
Cross-functional support helps CSOs advance sustainability
As the sustainability function continues to evolve, companies are taking different operational approaches to how they govern it. When asked which governance/organizational mechanisms their sustainability strategies have in place, nearly three out of four of the respondents (73%) checked “independent sustainability function.” This suggests that sustainability is growing in importance for companies within their respective business strategies.
As we’ve observed in our work, sustainability objectives tend to evolve from a “compliance” stage of meeting regulations, through an “efficiency” stage of reducing waste and optimizing resource use, to a stage of creating new business opportunities and leveraging relationships to achieve maximum impact.
To move to the third stage, collaboration across the enterprise is crucial, according to the 67% of our respondents who said that a “cross-functional leadership board” was among the governance mechanisms in their sustainability strategies. Having such a board in place makes it far easier for a CSO to advocate for progress and outline a vision for transformation than it is for CSOs at companies in which sustainability is an isolated function that’s not properly connected with other parts of the organization.
CSOs’ top three asks for their CEOs
For companies with long institutional histories and entrenched attitudes, sustainability can’t mature without a major cultural shift, the survey respondents concurred. This means that CEOs will need to cultivate the right skills in people throughout their organizations to help their sustainability leaders make a broader impact, and build the relationships and expertise they need to drive the business forward.
When asked in what three ways leadership could best help them get their jobs done, nearly two-thirds (64%) of the respondents said the CEO should “add sustainability metrics into the remuneration packages of key personnel”; more than half (55%) said “integrate sustainability in corporate strategy”; and slightly less than half (49%) said “assign sustainability responsibility to people in key leadership positions across the organization.”
Getting there: Five ways to lead the sustainability journey
So what can leaders do to jumpstart sustainability efforts and help ensure they succeed in the long term? We offer five tips:
- Determine your company’s location on the road to sustainability. Is it at the compliance stage of checking off regulations, the efficiency stage of increasing resource and cost effectiveness, or the stage of unlocking new business opportunities in sustainability? Then identify what you need to achieve your goals — always keeping in mind that the journey to sustainability never ends; you can always strive for even more.
- Identify precisely how sustainability can help your company achieve its goals. Many businesses look to find ways to cut operating costs. Sustainability can help you find ways to do not only that, but unlock other opportunities such as top-line growth.
- Get the C-suite on board. CSOs who report directly to — and have the support of — the CEO are more likely to describe their sustainability functions as high impact. As a result, in searches for their top leaders and board members, sustainability skills and awareness have become increasingly valued.
- Connect and build relationships throughout and beyond your company’s ecosystem. Your operations team, supply chain partners and business units are vital to implementing sustainability, so it’s important to tap into their creativity and resourcefulness to build relationships across your company. They can also connect with peers beyond the organization.
- Commit to measurement and transparency. Continually measure sustainability performance and progress and make sure everything is transparent. Such a commitment can spark external competition and a race to the top – which can help you base a winning business case for sustainability to present to leadership.
As a company matures in its sustainability journey, the concept moves beyond the core sustainability team to become embedded throughout an organisation, as both staff and line managers come on board and business leaders make it part of overall strategy. With so much progress made in recent years, the potential for change in the next generation is extraordinary.
Gianluca Bianchi is a member of both the Consumer and Technology, Communications & Media practices and leads the firm’s Supply Chain Practice in Europe, the Middle East and Africa. He is also a member of the global Marketing Officer Practice and leads its efforts in the Italian market. Reach him via email and follow him on LinkedIn.