Why is sustainability hard?
In a change for our changeXchange thinktank, we applied our knowledge of changing behaviours to understand the truth behind the commitments and why organisations find it so hard to achieve.
A Hot topic
Sustainability is a hot topic with most organisations having statements of their intent, making commitments to targets and promoting their new-found beliefs. In a competitive and challenging business environment.
Are their statements ‘greenwashing’, or a genuine belief?
Definition
A barrier to the success of sustainability is the variety of definitions in use.
Many originate from the 1987 UN World Commission on Environment and Development report, known as the Bruntland report which states:
“Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.”
More recently, the definitions have been expanded to include the impact on society and economy as well as the environment, recognising the interdependencies across each dimension.
For the purpose of our exercise, we used the simplified version from National Geographic:
“Sustainability is the practice of using natural resources responsibly today, so they are available for future generations tomorrow.”
Why is it hard to be sustainable?
A root cause analysis of the challenges facing sustainability in our organisations offered three macro themes:
1. The threat to immediate profitability
The pressure of short term earnings delivery is at odds with the long term investment required for sustainability
Consumer preferences and their current willingness to pay for sustainable practices
Competitive pressure to maintain low prices in saturated markets
Availability of competitively priced sustainable methods, materials and resources
Shareholders continue to reward companies for unsustainable behaviour
2. Inertia in leadership
Commitments, even public, are not held to account, with few consequences
Lack of need, desire or understanding of the importance or role of sustainability
Competing priorities resulting in resource and capacity constraints
Assuming someone else will fix sustainability, it is often outsourced to a small sustainability team
Leaders lack empathy with those impacted by their legacy practices
3. Lack of immediate penalties
Lax legislation and lack of consequences
Inconsistent standards and definitions
Promises made are not kept, deadlines and targets are often missed
Shareholder and consumer activism has not created enough pressure yet
The lag between what organisations say they will do and what they deliver
What are the consequences of not adopting sustainable practices?
The focus on being slow, or not adopting sustainability, highlights that many of the consequences are emerging, rather than realised.
They fall into four themes; Regulatory and Reputational, Culture and Competitive.
REGULATORY
There is an advantage in self-regulation. If you do not shape your own future, someone else will shape it for you.
Greater legislation can be expected to target non-sustainable practices through taxation or regulation
Increased scrutiny and oversight by regulatory bodies
Exclusion from markets due to lack of compliance to sustainability requirements
Resources you rely on (energy, infrastructure) are no longer available to you
Loss of quality marks which require sustainable practices
REPUTATION
Damage to an organisations reputation or trust can be one of the most value destroying risks.
Loss of consumers, or poor consumer sentiment due to unsustainable practices
Targeted by negative press, or activists using social media
Loss of future growth opportunities due to a poor reputation
Shareholder revolt, demanding different practices
Reputation risk by association with suppliers who provide unsustainable materials
CULTURE
Your approach to sustainability is a clear indication of your employer brand and what you care about. Employees are increasingly more demanding of their employers and their beliefs.
Employee dissatisfaction due to the reputation damage of unsustainable practices
Talent retention and acquisition, as ethics do not align
Need to replace leaders who do not believe in sustainability as ethically important
Employee trust erodes, reducing empowerment and flexibility
COMPETITIVE
A tipping point is likely, when customers or consumers demand sustainability and are prepared to walk if it is not provided.
Competitors, with sustainable credentials thrive as consumer sentiment shifts
Resources may dry up, as your supply chain moves to sustainable practices
Loss of consumer trust by ‘greenwashing’; marketing sustainability without evidence
Loss of government and other tenders which require sustainable practices
Increased cost of goods and margin pressure due to higher, sustainable input costs
What makes the most difference?
Applying our expertise in behaviour change, business and communication suggests a range of tactics that make the most difference.
Unsurprisingly, the genuine conviction of leaders rated the highest, closely followed by being proactive and embedding into existing business practices.
The changeXchange team offer twenty-five tactics to creating a more sustainable organisation:
LEADERSHIP
To successfully become sustainable as an organisation it is critical that you foster an environment and culture which genuinely values it. To achieve this, you need genuine leadership conviction in being sustainable. These tactics help.
Know your why and the consequences of failure
Accept responsibility for the current situation. Call it out, name it so that it can be addressed
Stand for what you believe in. Make sacrifices for your beliefs
Be decisive. bold and brave. Embrace the uncertainty
Start at the top, create actionable evidence of conviction, lead from the front
Commit organisational resources to solving sustainability for your products and consumers
Incentivise sustainable practices, create non-negotiability
Chunk the change into smaller actionable steps which builds leaders confidence
BE PROACTIVE
Do not wait for legislation, or the turn of consumer or employee sentiment. Act now. Be proactive and shape
your future.
Increase awareness of the consequences, and the need to be proactive
Listen to your consumers, your customers, your organisation, and your suppliers
Leverage sustainability to target new consumers, products and markets
Be innovative, think outside the box and do not rely on others, recruit your consumers
Build the capability to market sustainable solutions effectively
Commit funding to research and development of sustainable practices, and sources of competitive advantage
Empower your organisation to be sustainable in what they do
Reduce your dependency on natural resources
Collaborate within your industry to demonstrate good practices and reduce the risk of legislation
Leverage scale to push your supply chain to offer sustainable solutions
NORMALISE IT
Embed sustainability into existing business practices.
Make it part of what you do and measure, in the same way that organisations have normalised Health and Safety practices.
Remember, what gets measured gets done.
Include sustainability in your KPI’s, make them as prominent as income or margin
Create an environment which protects a focus on the longer term, without sacrificing for short term targets
Hire for diversity, capability and sustainable beliefs
Create accountability for sustainability
Be prepared to try and fail fast, the road to sustainability is uncertain
Repeat, Repeat, Repeat. Sustainability is long term, not a short-term fashion
Talk about sustainability, normalise it
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This paper is brought to you by changeXchange, a thinktank sponsored by the team at Irrational Change.
We solve behavioural change challenges for the benefit of all change agents. For more details visit our website for examples of our papers and details of how to join us.
If you would like advice on how to create a sustainability friendly organisation, using the latest in behavioural science, contact us.
