The people in charge of the world’s capital are realising that, in the future, there will be no room for companies that do not leave positive footprints.
Study upon study, last referred in Harvard Business Review, support the claim that purpose-driven organisations fighting for more than simply profit perform better than the dwindling group of conventional companies.
The same goes for the executive floor. In a study from the Confederation of Danish Industry, nine out of ten companies respond that they have introduced sustainability initiatives and see new business opportunities in sustainability. Another study of US Fortune 500 companies find that 85% of them report on sustainability in 2017 compared with 20% in 2012.
THE UN GLOBAL GOALS HAVE HELPED US TO SPOT NEW OPPORTUNITIES
The UN Global Goals have contributed to the creation of a common language for our shared challenges and our opportunities to do something about them. And they have also helped shift focus from a defensive standpoint where it is all about alleviating your negative effect on this or that to an offensive standpoint of lifting the sustainability agenda into your core business.
In Denmark, we are mainly focused on climate and environmental issues in the debate on the UN goals. This is for example the focal point for 11 of 13 participants in the first round of the “SDG accellerator” (SDG: Sustainable Development Goals) that UNDP and The Danish Industry Foundation are carrying out.
Your company has probably also defined how sustainability fits into your overall strategy. You have begun to treat sustainability as something related to your core business and not just as independent CSR initiatives running independently from the rest of the business.
Imagine for example that you are part of the C-suite for an airline company that has the ambition to help solve the climate crisis. You could choose to set up a programme to plant trees as compensation for the pollution connected with your air traffic. But you have realised that this type of initiatives will have no effect on your core business.
You have instead opted to enter into partnerships with aircraft manufacturers, authorities and others on developing resource-efficient aircraft and alternative types of fuel in an attempt to drive the development of the industry. Now, it is beginning to look like sustainable chance – both in the sense that the initiative will be able to survive the next cost-cutting round because it has a commercial value in and of itself and in the sense that it contributes to reducing the negative climate footprint of the business and ultimately also of the industry.
So far, so good.
Let us say that your company has a strategy that makes sense from a sustainability perspective, and that you have launched specific initiatives that show your customers, employees and the public that you mean to achieve something with your agenda. It is more than just hot air. But this is also where most initiatives lose momentum. Because how do you make your purpose so clear that it makes sense to all your employees and drive actual change in the core processes of your company?
INTEGRATE YOUR PURPOSE IN YOUR COMPANY’S DECISION-MAKING PROCESSES
A lot of research tries to merge financial and sustainable objectives. But none has resulted in solutions that can be translated into pragmatic and effective help to the employees in their workday. And the Global Goals are in themselves hopelessly general when you try to convert them into the impact you have a chance to create in your own company.
You therefore need to do some pragmatic work if you as a company want to live your purpose and to drive an effect that goes beyond financial results. Irrespective of where you are in the executive hierarchy, there are three known methods that have an effect.
1) First of all, insist on converting the hot air into a purpose that makes sense. Which specific parameters can and will we affect as a company, as a department and as employees?
2) Secondly, use the old trick of measuring things. If you insist on measuring how far you have come with respect to your purpose, there is also a chance that you will hold each other accountable for your progress. Why haven’t we moved more in the right direction? So define and follow up on specific targets that can show you if you are on the right path.
3) Thirdly, integrate your purpose into the decisions you make on a strategic, tactical and operational level. How do we incorporate our new targets into the company’s investment decisions? You can do this by insisting on evaluating impact targets in decision-making processes, or you can have a more “automated” process by integrating impact targets into decision-making tools as business cases, board recommendations, etc. First and foremost, it will require that you become so specific in your impact targets that it makes sense to prioritise on their basis.
We need someone to take the lead and show the rest of us how it is done. In practice. Why not you?
Originally published in Børsen Ledelse.