Mybe I'm missng somthng.
2020's CBI conference sent a clear message out that as we emerge from COVID-19 we will 'build back better'. Build back cleaner, build back inclusively, build back with parity and equality, in all building back sustainably and responsibly. The gloves are off now. We need to trade responsibly and sustain the planet; the message and the science has never been more stark. Each and every new $1 invested should be in sustainable and responsible business; whether that's in infrastructure, digital, supply chains, services or changing the face of throw-away consumerism.
And it's not just the CBI. Governments, the worlds largest investors (Climate Action 100+, 545 investors responsible for $52tn of assets), international giants (Nestle, Repsol, Qantas, Unilever, Apple, Shell, Sky, HSBC and Microsoft, for example, have Net Zero ambitions by 2050 or sooner) are all nailing their colours to the Net Zero mast; part of the UN's 17 sustainable development goals.
So with $ gazillions and $ squillions piling into sustainable infrastructure and products the job is done, right? I can put my feet up and be confident that markets, investors, corporates and consumers are all clearly aligned to take care of the UN's 17 sustainable development goals (SDGs).
No? Oh. So, wht's missng? We are currently risking and wasting $bns by investing in many 'greenwashed' proposals and 'green PR' activity that has promised much with little evidence of real impact. Greenwash painted projects that are only skin deep. Peel a layer and the cupboard can be bare.
Why isn't sustainability ingrained in the fabric of businesses like, for example, health and safety; it's at the board table, top of the board agenda, in our articles, part of our job descriptions, our bonus, our systems, et al. The lack of glue, fabric, and mortar is the reason that in the past the sustainability agenda has been slow, hollow and often somebody elses job; "Surely the head of CSR looks after that kind of thing".
So how do we go from 'Bld Bck Bttr' to 'Build Back Better'?
In this piece I do use sustainability and zero carbon often, but I mean to refer to any one of the 17 sustainable development goals interchangeably. They are all important.
The Glue - 17 SOCs to deliver the UN's 17 SDGs
It amazes me that protecting our planet and its future does not have the same priority as managing our budgetary performance or heath and safety, for example. The very fabric of our businesses have huge gaps when it comes to building back better. Our traditional corporate DNA and dialogue is just not geared up for it. This is a huge subject which I can't possibly do justice to in an article, but as the UN has 17 sustainable development goals, can I offer you 17 sustainable organisational challenges to review in our quest to create sustainably developed enterprises?
1. Changing investor behaviour, and extending the investment case
We need to go far beyond the 'tick box' exercise that is carried out by some investors. I've been told that as long as the investment ticks the green box, let's not look too hard or ask too many questions; and this from large international funds. The $1 invested needs to definitively prove carbon reduction. Investment cases need to go longer term, include ecosystemic effects, the wider economic community and be more commercially creative. The current simplistic and linear, 5-year, build it and exit model is simply destructive and does not combine productivity with constructivity. More creative and longer term financing is needed in ecosystems (rather than solely one business), such as Blue Finance that invests in one part of an marine ecosystem, which in turn creates money to invest in critical biodiversity issues elsewhere.
2. Creating a Net Zero Equivalent P&L and meaningful corporate reporting metrics
P&Ls have always been incomplete and merely window dressing. The P&L should continue down beyond accounting profit to a Net Zero Equivalent (NZE) P&L bottom line or similar. It should incorporate the carbon and societal costs that businesses create and other impacts causing societal damage. It should include the equivalent cost of running the business at Net Zero and we include the wider UN SDGs. We of course need to go further with our KPIs, with research being conducted into the interconnectivity of these with traditional performance $ metrics. This would give investors something tangible to go at.
3. The board, collectively and individually accountable
Nothing changes unless every director is accountable and has duty, ideally in law. Having one director responsible for the CSR PR machine is not enough. Having all directors accountable ensures that sustainable strategy, goals and objectives are diseminated to all parts of the organisation. It's everyone's job, not one persons.
4. Non-Executive challenge; the sustainable NED
Do your NEDs challenge the executive on their progress in sustainability? Is there any consequence if they don't? Maybe it's worth bringing in an independent pair of eyes to push this agenda and stretch the executive.
5. Sustainable strategy, board agenda and core values
H&S is often the number one item on the board agenda. It's important, it saves lives. So why not sustainability? Ultimately it is an H&S issue as climate change, poverty, biodiversity, inequality, lack of water and poor diet are often more damaging than slips and trips. So make sustainability top of the board agenda and act on it. How much agenda time is spent on sustainability as opposed to trivial or transactional items? It should be firmly in the articles, ingrained in strategy, and echo from your core values. It should flow through the fabric of every board meeting, strategy session and committee; and so permeate from there through the organisation.
6. From purpose to meaningful storyboarding; creating the sustainable narrative
Communicate, communicate, communicate is a mantra I can't get enough of. To mobilise from purpose to action, the executive vision, narrative and meaning needs to be clear. Hollow greenwashed values don't work if your CEO continues to travel 30,000 miles in their car every year, or your top team continues to consist of the white male and stale. Staff want to hear clues of what it means to them. The message should be clear and the golden thread articulated. "We understand the opportunity that sustainability offers to our business, our people and our communities and we want us all to embrace it and make it happen. We all need to understand how our everyday activities can contribute to the betterment of our families, our friends, our communities and our planet".
7. Stop the short sell to consumers; start a dialogue with responsible users
We need to shift consumer behaviour from short term throw away consumerism to becoming responsible users of product. I have huge amounts of respect for companies such as Vitsoe whose narrative with their clients is that "we want you to live better, with less, that lasts longer". This dialogue permeates through each fibre of the business, and resonates with their clients. An enlightening model, through which, CEO Mark Adams and renowned designer Dieter Rams carry a vital message.
8. Help me understand this! Education and the point of enlightenment
Most people want to do a good job and want to contribute more positively to their communities, but really don't know how. Even with the will to do the right thing, it can be just too hard, or mentally a step too far. This subject is still immature. They need tools, guidance and pointers to help them become self aware of their footprint and impact. By making it personal, people start to join the dots and embrace that eureka moment of enlightenment. Once they get it, the momentum snowballs and becomes infectious. How, for example, as a sales ledger clerk can I influence our inclusivity, our carbon footprint and our biodiversity? It needs to be meaningful.
9. KPIs; productive sustainability?
There's a lot of research, carried out by the likes of SASB and CIMA, into the right KPIs to measure, their interconnectivity and their direct link with traditional measures. Build in measures that link sustainability with traditional metrics and demonstrate their societal and economic impacts. Flex your systems to collect the data simply. By driving these, the board creates productive sustainability. It's hard, requires some thought, but is not impossible, nor cumbersome if designed well.
10. From strategy to performance objectives and remuneration
Now that sustainability is on everyone's radar, how do we encourage action? What gets measured gets done surely, and so long term and annual objectives directly linked to important SDG's are key in encouraging action. Consequently rewards linked to achievements should be remunerated and celebrated.
11. Dishing out consequences for unsustainable practices
As important as encouraging sustainable action, is to pull people up for ploughing on with destructive or dismissive behaviour. How often have we seen no consequence for greenwashing? And so it becomes accepted, pointless blather. Unfortunately, by us doing nothing and accepting this behaviour we are complicit. "If we miss my carbon budget by 40% that's OK, but miss my $ budget by $5 and I'm in big trouble". The wrong performance conversations are going on.
12. Does your job description include sustainable objectives?
I've never seen a job description or job advert come through for a CFO include 'sustainability objectives'. A shocking example. How do you expect the CFO to allocate resources to optimise sustainability if it's not on their radar? Similarly for other c-suite members and staff. Like health and safety, responsible business is everyone's business.
13. Recruiting and requesting sustainable achievements in applicants CV's
Look through your CV. Does it include sustainable achievements? In the past I have been asked to remove these from my CV because it's not $ focused, even though they are quantifiable. Just include hard monetary achievements. How about including hard Net Zero achievements? It's harder to achieve and has more impact on the planet?
14. Like the investment case, internal business cases need to disclose FULL sustainability impacts
Most business cases are often light and incomplete. Frequently missing off items beyond gross margin. For a full appreciation of the impact of an investment surely we need to declare the Net Zero investment case. These should include societal impacts and be encouraged to include wider systemic effects of the business case; the impact on the wider organisation, supply chain, market, business ecosystem and society. It would drastically change to investment choices and push the decision from lowest cost to longer term sustainable value generation.
15. Who's setting your policy? Move to sustainable stakeholder inclusive policy setting
To create policies that are inclusive and are more embracing, businesses should include stakeholders and a wider eco-system of actors in writing sustainable policy. If the target is to protect the wider community, then input from the wider community is necessary to set meaningful guidance and will help in demonstrating impact. Your policies need to be clear regarding the consequence for unsustainable behaviour and practice. What do you stand for? What is acceptable and what is not?
16. Language, culture and just the way we do things round here
Are the main watercooler conversations about budget cuts, supplier issues and operational issues? When did you last discuss sustainability over a vanilla latte? Have you ever chewed over how your business impacts biodiversity and Net Zero? Would you even know? Responsible business just needs to be the way we do things round here.
17. Run the diagnostic; is your business McKinsey 7s sustainable?
Run a McKinsey 7s analysis over your organisation? Is your strategy driving down carbon footprint? Do you have the skills to decarbonise your business? Does your culture, style and language encourage inclusitivity? Does your supply chain address biodiversity, modern slavery or poverty? Do your procuirement systems drive lowest cost, or optimise sustainability? You need to look in every corner of your business.
Look in the mirror. Are you building back better or merely bldg bck bttr?
How can I possibly cover all of the areas that need an overhaul in businesses for them to become truly sustainable in one blog? I can't. This is a huge change in the way we do business and it needs all of us to take responsibility. It's not someone elses job. It's not the job of the head of CSR. It's ours. I only hope that I can provide a spotlight and add momentum to a narrative that will create opportunity and movement towards a sustainable future. Now.
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