Companies of all sizes, across all sectors, are realizing the great benefits that come from corporate sustainability programs: efficiency improvements, heightened brand loyalty, increased shareholder and employee satisfaction, substantial public relations gains etcetera.
If your organization isn’t one of the trailblazers of corporate sustainability like Patagonia or Amazon, you likely understand the benefits of such programs but may be wanting for the strategies and tactics to turn your vision into reality.
It has been more than a year since Kering, the parent company of Gucci, Puma, Volcom, and other luxury brands, publically released its Environmental Profit and Loss Account.
In the report, designed to economically quantify the social and environmental costs resulting from their business activities Kering revealed that 93 percent of their environmental impact falls within the supply chain, and more than 50 percent of their environmental costs owe to raw material production.
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Those figures are equally astounding and disappointing. But the real takeaway is that businesses are treating with increasing seriousness the environmental costs they impose on society because they understand that they can’t simply pass the buck. At the end of the day, sustainability paves the path to profitability.
In fact, the business case has been made that a robust and smart sustainability initiative can improve profits by 51 percent to 81 percent within three to five years, while making no changes towards greater social responsibility are likely to result in a profits decrease between 16 percent to 36 percent.
In today’s marketplace, companies need to take responsibility for resource sustainability. In practice, that means developing a Corporate Sustainability Program. Here’s my seven-step plan for building an effective CSR program:
Step 1: Establish Cross-Functional Buy-In
If there could be a step number zero, this would be it. Before any work is done on a sustainability program, it’s important to gauge engagement from shareholders and management, to the lowest-level employees and every worker, vendor, and consultant in between.
Of course, there’s something of a catch-22 to this, as you can’t embark on the journey of a CSR program without engagement, and you can’t very well foster engagement without having a program.
Therefore, at this stage, it’s important to focus on interest rather than commitment. If you can justifiably determine that the people of your organization want sustainability, proceed to step two. If you can’t, invest in educating them until you can.
Step 2: Build a Team
Sustainability leadership should include people from all levels, all departments, and all geographic locations. If your company does not have a suitable team leader within its ranks, consider hiring a consultant with experience in the field. Your team will be tasked with goal-setting, engagement, process establishment, measurement and analysis of results.
As with anything else, it’s important that your team manage to walk the line, balancing a data-driven mentality with a penchant for creative thinking. You’ll need doers and dreamers, strategists and activists. A well-rounded, well-informed, and well-liked team is a critical component of success when developing a corporate sustainability program.
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Step 3: Understand the Baseline
If wisdom may be gleaned from old adages, then it’s worth bearing in mind that “you won’t know where you’re going until you know where you’ve been.” In sustainability programs (and many other business goals), it’s critical to understand the baseline in order to make improvements.
The team must measure current operations how much water/power/other resources are currently being consumed? How much is being wasted? How much comes from renewable sources?
What is your current carbon footprint? It may also be necessary to determine what technologies are needed in order to measure operations. The more granular you can get with your answers, the easier it will be to identify opportunities for improvement.
Step 4: Set a Vision, Mission and Goals
Once you have a firm grasp on the baseline and current reality, you can start designing your path forward. Outline a corporate sustainability vision, define your sustainability mission and set quarterly milestone goals pursuant to that vision and mission. Consider these questions:
- What are your values around sustainability?
- What do you want to be known for?
- What does a sustainability SWOT analysis look like?
Step 5: Decide on Sustainability Initiatives
Once your vision, mission, and goals are agreed upon, your team must consider initiatives to achieve your goals. In contemplating possible projects, think about their potential impact and cost, the degree of difficulty, required resources, etcetera.
For example, take the goal of reducing energy consumption, you may find yourself comparing various technology solutions, weighing equipment retrofitting options and considering the costs associated with a to prescriptive maintenance schedules.
Step 6: Time and Measure
Make all your initiatives SMART (Specific, Measurable, Attainable, Realistic, Timely) and tie them together into a complete plan for the year. For each initiative planned, assign a person to be responsible and accountable, define metrics for success (as compared to the baseline), and set a period for progress reporting.
Step 7: Involve and Engage
As our first step (or step number zero, if you please) began with the buy-in, so does the last step end with involving and engaging all of the stakeholders. Internal staff members, external associations, shareholders, government bodies, and everyone who has a stake in the company’s success can (and should) be involved in the corporate sustainability program.
You may consider developing a strategy for change management to deal with the behavioral adjustments required within the organization. You may consider gamifying the process to make it fun and enticing. Whatever your method, always remember that the more stakeholders are involved and engaged in the program, the greater the chances for its success.
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Evolve and Adapt
View your Corporate Sustainability Program as a living part of your company. Allow it to grow organically, adjust flexibly, and continually evolve and adapt to the changing needs of your company.