A common situation working in corporate responsibility / sustainability can roughly be outlined as follows:
- The leadership team level at company X is not making the moves that might be expected and needed from a sustainability perspective.
- Much of the policies and statements that exist on paper could be considered ‘greenwash’ and company X is very much behind the curve when it comes to establishing stringent and operational approaches to sustainability and CSR.
- Pitches to the leadership team around what could and should be done, including practical steps such as establishing solar roof installations on a warehouses, electric vehicle fleets, reduction in embodied carbon for all new sites as business expands, etc., do not lead to anything whatsoever.
- The competition moves ahead with bold public commitments, and attaches significant investments and innovative efforts to these. All of which are measurable and marketable. They add value to their clients decarbonisation and other CR needs.
- Yet – Company X’s attitude and responses are: if customers ask for these things then they will provide them, or start to work on them. A far cry from being engaged or indeed driving such efforts.
Rather than the exception, the above outlined situation is the rule. Still. And very unfortunately. But what to do about it? How to get that door to open?
High-Level Status Quo
In situations like the one above, companies miss out.
But sadly not on what they consider ‘nice to have’ – the ‘are we getting future fit’ part of the question – but on the ‘must haves’: compliance, efficiencies, cost savings, and reporting requirements.
Taken together this is evidently a No Go.
Why?
Because the operating space will invariably keep shrinking.
Due to external influences.
Hardly any of which has to do with the client (see figure), but rather with the way economy, regulation and also society’s demands on business shift and change over time.
And the later any action gets, the more costly and time sensitive – every engineer will now that very well – its implementation is becoming.
Unlocking closed doors: Compliance, Risk, and the Fear of Missing Out (FOMO)
With the above said, and keeping in mind the type of discourse taking place in companies such as X, there are a few view points that offer a key to unlock an otherwise entrenched situation. The three most evident ones can in short be summarised as follows:
- Legal Compliance:
These days, many countries require minimal efforts in regards to a range of topics: gender equality and equal pay, health and safety, slave labour in supply chains, carbon emission reductions, or at least the reporting of emissions, recycling targets. In the EU this very distinctly the case.
An analysis of the actual status quo (as opposed to the suspected/assumed/ so far documented status quo) is a start.
Why?
It gives a very good idea of how well a company is able to comply with legal regulation in general, and how large the bandwidth of interpretation they allow themselves is. - Risk and Due Diligence:
Most insurance contracts a company signs require some type of risk analysis and due diligence efforts. A typical example of which would be liability insurances. Very few companies – not even the best in class – regularly review the requirements set upon them by the insurance company. An area where this is often a challenge is for Health & Safety in manufacturing, production and warehousing environments. This is why compliance is often allocated to the legal department in larger companies.
Reviewing such requirements and following them up with an in-depth risk assessment helps to obtain another data point on how well a company is doing in terms of legal and contractual obligations. - Digging deep into efficiencies: Waste not want not
Carbon and/or GHG emissions – as one example – are a good measure of potential inefficiencies in operations. Other such measures could be water footprint measures, or waste-to-landfill measures to just name a few.
Inefficiencies in operations means: a silent ongoing leaking of cash. And which company is not concerned about loosing money along the way of doing business?
Hence, looking at where carbon (water, waste etc.) is generated in operations, is a good start to turn the tab shut on these sources. Or at least as low as possible.
Doing so not only saves money. But it also requires monitoring capability from the company. Which is another win for the overall discussion to ‘do business better’. It is an absolutely needed capability to have for any company – even if they abhor the S-word. - Benchmark (against) the Competition
Hardly any company is willing to compete to be No 1 in any specific field other than owning market share. But equally, being at the tail end in any one area is a bad omen. It means that literally everyone else has some competitive advantage they can leverage.
Benchmarking a company against how well or badly it is doing relative to competitors is at the very least needed to offer the clients ‘value for money at par with the competition’ – and nothing to write home about.
Overtaking the field – let’s say scoring top 10 – again is an opportunity to offer this value add to clients. As a bonus. As a proof of being a valuable business relationship. As proof of foreseeing their challenges and demands, and helping to solve them. Showing to be ‘part of the peloton’ at least.
And where is the S-Word in all this?
Indeed, where is it?
The answer: nowhere.
Or at least not in the shape many expect it to turn up. Sustainability is not about ‘greening’ the planet. Or creating ‘heart-warming charity stories’. Far from it.
Sustainability is fairly hard-nosed business acumen. Just one with a somewhat more farsighted mindset.
In the above we looked at fairly short-term efforts, investments and ROIs. Typically 2-ish years. Very rarely 5 or so years.
But for a company that truly wants to future proof its company, and ensure as good as possible that it keeps existing, functioning, being successful, 5 years is not a sufficiently useful timeline. A 5 year timeline is the equivalent of ‘yesterday’. Most of those decisions have already been taken, and only their results are being felt and seen.
Companies genuinely looking at their value add in the future, looking at how to ensure that they may out compete the field, look at longer timelines. 10 years, sometimes even 20 years. Toyota even dared to look at a 100 year timeline. Such timelines suddenly confront us with a vastly different reality than we know today. And a vastly different set of requirements for a business in order to be successful.
But before any such thing is worth the brain squeeze and effort: Be compliant, be efficient, know the risks, and ensure proper due diligence.
None of which has or is either a quick fix, and require a fair bit of skill and effort. But it results in a much better grasp of operations, of collateral costs.
And in a track
record of low hanging fruit successes with clear and effective ROIs.
The ROI is not the point. But the learning that comes with it
is the wedge in the door that won’t likely close shut any more.
Ever.
