How to create and integrate a sustainability strategy

By Chris Librie

Creating a sustainability strategy sounds daunting, doesn’t it? Trust me, it doesn’t have to be. And like any major project or business transformation, it's best-approached systematically. So here’s my high-level guide.

What is sustainability?

First, you should align your company on a definition. According to the UN, a sustainable business “meets the needs of the present without compromising the ability of future generations to meet their own needs.” And since that’s a bit of a mouthful, I often focus on the triple bottom line – or “people, planet, profit” – the three elements that need to be in balance to achieve sustainable results.

I like to emphasize that profit is one of these. Otherwise your business will not survive long enough to have a positive impact!

What does sustainability mean for our company?

The challenge is connecting these lofty concepts directly with your business. One way to do this is by conducting a “materiality analysis”. This exercise involves considering what your stakeholders expect of you, as well as what’s critical to drive your business. Materiality analyses can be done simply by talking with a number of leaders inside and outside your organization. In large companies, materiality is frequently represented as a matrix, and the issues are often grouped by strategic themes. In any event, the business should focus its sustainability strategy on those issues most important to stakeholders and the company.

For illustration purposes, here’s a great example from PG&E’s 2015 sustainability report:

Measure, measure, measure

It’s often said that you can’t manage what you don’t measure. So I’ve found the art of footprinting to be highly important to sustainability strategy. Start with carbon and footprint all your impacts across the value chain. If you can, footprint your water impacts, as well. I led these efforts at two companies, and we gained many critical insights. In both cases, the company’s direct impacts – its offices and other owned operations – were only about 10% of the total footprint. The rest of the impacts were either upstream – in the supply chain – or downstream in customers’ use of products and services.

What projects could we implement to improve?

Insights into what’s material, and where the footprint impacts are largest, will lead directly to project ideas for sustainability improvements. Perhaps the transportation of products from your factories to customers is a major factor. At one company, we improved our inventory practices to minimize the use of air shipments for just that reason. And if yours is a services company, reducing travel through teleconferencing can improve your footprint. Or perhaps stakeholders expect you to uphold and improve human rights in your value chain. I’m familiar with many groundbreaking projects to do just that. Of course, efficiencies in your facilities, such as smart building technology and renewable energy should also be considered. Throughout this analysis, be sure to balance the largest sustainability impacts with each project's return-on-investment.

Empower a team to drive results

In most companies, the sustainability strategy involves many parts of the organization. These may include the teams that manage real estate and buildings, supply chain, transportation, procurement and product design. Business unit leads, marketing and HR also may have an interest in the sustainability agenda and in publicizing the progress made. So empower a team to build alignment and cohesion between the work of these different groups.

Set goals and report progress

The sustainability team’s performance will be accelerated by clear goals. Reducing carbon footprint by a compelling percentage by a certain date, or improving supplier diversity over a given period, for instance. In the tug-of-war of sustainability progress, having everyone pulling toward the same key objectives will speed the positive impacts and strengthen communication.

Tell your story

Sustainability drives employee engagement and competitive differentiation. Therefore, progress made toward goals, and work to improve what’s material to stakeholders, should be communicated internally and externally. Many companies produce an annual sustainability report, for just this reason. The report should be leveraged in your customer materials and other stakeholder-facing communications to maximize its impact. Remember to be transparent; not every project will succeed and not every goal will be met easily and on-time. It’s better to be open about triumphs as well as setbacks, since that builds credibility.

Measure the business benefits

As sustainability becomes embedded in the company strategy, and results become routine, be sure to capture the benefits to your business – whether these are cost savings, improved employee engagement, RFPs and sales volume won, or other awards and recognition. Some of these measures will be hard data (e.g. cost savings), while others can be captured in surveys (e.g. employee engagement) and some are even qualitative in nature. Whatever the data sources, detailing the positive impacts sustainability makes to your company is critical to maintaining organizational commitment and investment.

I firmly believe that a well-crafted sustainability strategy - and especially one that's integrated with your business strategy - can unlock growth and improve business performance in companies of all sizes. Hopefully, this two-part series has raised your interest in creating a sustainability strategy for your company and starting down the path toward its successful implementation.

This post was originally published on the Sustainabilist blog.