Sustainability in the workplace has become a buzz word that often seems not to matter as much. Many organizations give lip service to it, without investing in corporate sustainability training and best practices that make the real difference. Sustainability, in today’s world, sells and attracts talent, so how do you promote it and create a workplace that is resilient, responsible, and efficient?
Obstacles to Attaining Corporate Sustainability
First, there are some things which get in the way of an organization’s desire to increase sustainability. There are three major challenges to sustainability initiatives at all levels:
- Value: Many stakeholders, including shareholders and CFOs, are interested primarily in the bottom line. As sustainability initiatives generally have an upfront cost, it can be hard to convince those stakeholders that it will improve profitability in the long run.
- Assessment: It can be hard to develop the right metrics to assess initiatives properly and provide the information needed to demonstrate the advantages of a project.
- Engagement: 47% of respondents in a recent study said that employee buy-in was their greatest challenge. People tend to do things the way they have always done them, communication is not always solid, and people aren’t necessarily trained to properly follow new objectives.
When developing a sustainability plan, you need to keep these three obstacles in mind, and often the third one is the largest. This article will talk about a few things related to establishing metrics, demonstrating value, improving engagement, and using sustainability to increase your company’s profitability and stability.
Establishing Metrics for Corporate Sustainability
In order to prove value, you need to establish metrics. KPIs for sustainability need to be transparent, suited to your data, and help you make the right decisions.
Fortunately, there are already tools out there that can help. For example, UNEP Finance Initiative Property Working Group has developed a series of sustainability metrics that can be used in the building and property world. Tools such as this for your industry can be used as a starting point to help you begin to develop your own set of custom metrics.
This is vital before you engage in any efforts to increase sustainability and resilience. You need to engage in an audit process to help you determine where your biggest barriers are, where you need the most work, and what existing initiatives can be leveraged.
These metrics need to be tied into your goals. Are you trying to use more recycled materials in production? Reduce your office’s energy footprint? Attract environmentally-savvy consumers? You need to lay out your sustainability plan, and ideally it should cover all areas of your organization, helping you identify opportunities to reduce risk, save money, and improve your brand’s reputation.
Engaging Employees in Corporate Sustainability
A second huge piece, as already mentioned, is engaging and involving your employees. In too many cases, sustainability initiatives are set up without any consultation with employees, or without concern for what is best for them.
Ideally, employees or employee representatives should be engaged in the goal-setting progress, with the understanding that sustainability includes occupational health and improved working conditions. For example, if you have set a goal of reducing the energy footprint of your office, and thus introduce a policy of turning off computers when employees leave, you will make no progress without buy-in.
At a more serious level, sustainability decisions can prove to be harmful to a subset of workers. For example, WeWork implemented a policy of no longer serving meat at events and no longer reimbursing for meals that contain meat. This was framed as an environmental issue, but anyone who has done business travel can see the minefields. What if you are at a hotel in a suburban wasteland with no other restaurants…and there are no vegetarian or pescatarian options on the menu (Yes, this has happened)? What if you are entertaining and must tell the person you are wooing that they have to order vegetarian? What about people who struggle to stay healthy on a vegetarian diet? This is an example of a sustainability initiative that can cause harm. Removing plastic straws is another very common one, as many disabled people need them. Forcing employees to use public transport rather than driving can also cause accessibility issues.
By engaging your employees in the process, you have a higher chance of seeing hidden accessibility minefields or other problems with a new policy. Also, there is always the risk that an ill thought out sustainability initiative will increase employee turnover and related costs. High turnover also negatively impacts the very same corporate culture you need to make these initiatives last and develop a resilient, stable workplace that your people can be justly proud of.
Another very good reason to involve at least key employees is that they may have ideas for how to improve sustainability that you missed, especially workers at manufacturing sites or satellite offices management visits relatively rarely. Once you have these initiatives in place, it’s important to make sure they are clearly communicated to your employees, both to encourage compliance with best practices and to ensure that workers know why you are now doing things the way you are doing them.
Thinking Outside the Box on Corporate Sustainability
Especially for offices, there tends to be a short list of things that are always cited to improve sustainability, such as adjusting the thermostat when nobody is in the office, subsidizing commutes by public transport, using recycled paper, etc.
There are a lot of low-hanging fruit, but a truly sustainable company needs to go that little bit further and embrace sustainability across the board. Traditional sustainability initiatives can only go so far. Companies need to fully address enterprise integration, which brings sustainability into every part of the process, including manufacturing, marketing, and employee training. Depending on the industry, the approach and goals might be different. Risk management, for example, is often supported by insurance companies who want to reduce claims, but is also beneficial for the company they pressure. Sustainability is also vital for supply-chain logistics; a sustainable supply chain is less likely to fail under the additional strain of a natural disaster or unexpected market conditions. This level of integration is a challenge, but companies also need to start moving past it.
The next level is market transformation, which is thinking how your company can move into a sustainable future without relying on existing ideas, and start tugging the entire market into carbon neutral status. While this tends to be something achieved by startups, existing companies can start to work towards market transformation.
The real obstacle to these ways of thinking comes right back to the first obstacle we talked about: Value
The primary means of demonstrating the value of corporate sustainability initiatives is, of course, the assessments and metrics already mentioned.
To demonstrate value you have to show how an initiative will reduce costs, increase income, or both. The easiest to demonstrate tend to be the low-hanging fruit.
For example, switching to LEDs may come with an up front cost, but saves money in the long run by three metrics:
- They use less energy, by 25 to 30 percent compared to incandescent light bulbs.
- They last a lot longer, and thus while each bulb costs more, the cost evens out.
- Somebody doesn’t have to keep changing bulbs, saving time that can be spent on something more useful.
For something like this, it’s easy to demonstrate the value. Reducing your utility bill is another obvious value.
However, for more complicated out-of-the-box initiatives it can be much more complicated to convince the “money people” that this will benefit them in the long run. One huge area that is relatively easy to explain is risk management.
Risk Management and Sustainability
Risk management is a great example to use because it’s something all companies need. In today’s world, even a small company can find themselves with a global supply chain impacted by significant levels of risk. Risks to supply chains include poor working conditions, civil conflict, climate change, and natural disasters. Unfortunately, this is more complicated than other forms of risk management, as these risks tend to effect multiple dimensions and manifest over a longer term.
This means that you need to invest up front for a payoff that might be twenty years down the road. In some cases, if you do it right it will look as if you overreacted to the risk, which can make future investment harder to get past shareholders. Yet, these risks can be substantial. In 2011, flooding in Thailand increased the global price of clothes by 28%. Investing in sustainable agriculture reduces these risks but, again, the payoff can be many years in the future.
One way to leverage and explain value is through an improved understanding of social capital. While obtaining Rainforest Alliance certification might not bring immediate financial rewards, it’s something that can be made transparent and visible to your customers. Customers are often looking for products that are created in a sustainable way. In some areas, such as chocolate, consumers are becoming aware of issues related to forced labor. “Slavery-free chocolate” is a phrase that should not have to be heard, but in addition to being the right thing to do, ensuring that your chocolate is produced without coercion is important to your potential customers, especially Millenials and younger who have grown up with a greater awareness of global interconnectedness.
In other words, risk management and value also connects to the last important piece of the puzzle, which is promoting corporate sustainability to your customers.
Sustainable Marketing and Savvy Consumers
Customers care about the planet, especially younger customers. Over time, their buying power is only increasing. In 2017, Unilever did a global consumer study that showed a large percentage of consumers are actively looking to buy sustainable products from companies using sustainable practices. Since then, the percentage has likely increased. Consumers are also under more pressure to buy green from friends, family members, and even their own children.
Sustainable marketing involves the twin levers of promoting your product or service to those customers by highlighting what you are doing in your business to be more “green” and also developing longer-term marketing initiatives that are intended to ensure your company’s longevity by marketing to people throughout their life.
Sustainability is no longer an optional extra, but rather something your customers have come to expect. Which means that a huge part of creating a resilient company and workplace is ensuring that your customers know you are doing your best to do so. This results in improved income that then demonstrates value to stakeholders and helps you both afford and justify planned next steps.
Your marketing team needs to work on promoting your products as sustainable, in an honest and transparent way. Product labeling, press releases, and social media postings can all be leveraged to ensure that customers know that you are taking important steps. Clarity is vital; and you can use initiatives aimed as employees as a test bed and starting point for marketing campaigns that explain why you are, for example, changing suppliers to one which has a better reputation for treating employees well.
Because customers expect sustainability, you need to think about it for every product and every stage of the supply chain; and consumer demand can, in fact, cycle back into your initial goals and metrics.
Corporate sustainability and resiliency are vital as we move into the future. A large challenge of this is ensuring employee buy-in and engaging your employees in both promoting and indeed creating sustainable practices moving forward.
Our Sustainability & Resiliency Accelerator is a course designed to teach key employees solid, practical skills to help your organization improve sustainability efforts. It will help you reduce risk and identify savings, use sustainability to solve your pressing challenges, and acquire a practical toolkit to promote sustainability both within your organization and outside. To find out more about this course and our other corporate training courses, contact Cprime today.