Leadership
Committing to the Sustainability Journey:
How Do You Know When Your Company Is ‘Ready?’

Sometimes in conversations with corporate sustainability leaders, it’s easy to forget how many other significant companies are not yet truly on the journey. But I certainly encounter some of those companies in my consulting practice, and have often been mystified by dialog that goes something like this:

Me: “So, in examining your product development and innovation portfolio, we’ve been talking so far about what’s good for your customers, what’s bad for your competitors, and what’s the best use of your people and money. What about how these decisions – what products to make and not make, and what features they should have – impact your company’s sustainability goals and related business value?”

Them: “Well, our sustainability goals aren’t really that well quantified yet.”

Me: “Yes, but even if you haven’t made hard commitments to reducing your environmental footprint, wouldn’t you be interested in integrating some really basic evaluation metrics that would tell you, early on in the decision cycle, that New Product X (or feature X) will be significantly more sustainable than New Product (or feature) Y? And that doing X instead of Y (especially if you don’t have resources to do both) will lead to a more resilient supply chain, stronger brand reputation, greater pricing power, and attracting and retaining the best talent? That way, when you do have more quantified goals, you’ll be further along in achieving them.

Them: “Sure, but we’re really not ready for that kind of analysis.”

We’re really not ready. In response, I love to ask, “So, how will you know when you’re ready?”

Nothing is quite so effective at producing a gaping silence as that question. Yet, when I ask real sustainability leaders how they knew they were ready when they first began their journeys, the answer almost universally is, “We weren’t ready.”

So, to those companies who have not yet begun in a truly meaningful way, I can tell you that it’s unlikely you will feel “ready” until it’s too late. Then, down the road, you’ll wonder why your competitors’ margins are better than yours, as they have become less dependent on scarcer, more expensive natural capital in a climate-challenged world. It’s easy to forget where some of today’s sustainability leaders were less than 20 years ago when they, too, weren’t “ready.”

In the early 2000s, even IKEA’s then-President, Anders Dahlvig, acknowledged that the company wasn’t ready, and didn’t really understand how to put sustainability into strategic context. But the company was thinking about environmental questions — and so it started, just putting one foot in front of the other until making a bold commitment to reduce its carbon footprint in 2008. Look at them today, having committed to becoming people and planet positive by 2030; had they waited until they were “ready” to begin this journey, that announcement might still be a decade or more away – or might not ever come at all.

When the Marine Stewardship Council formed its first Stakeholder Council in 2001, fisheries and retailers certainly weren’t “ready.” UK retailer Sainsbury’s knew there were looming issues in sourcing seafood sustainably but didn’t have a plan. But that didn’t stop it from being the first retailer to sign up to the MSC principles. And though Sainsbury’s traction was slow in the beginning, by 2003 it took the bold step of committing to 100 percent sustainable wild catch. Fast-forward, and Sainsbury’s entire seafood department — more than 225 different products — will be 100 percent sustainable by next year.

In 2001, when Eric Sprunk began running the global footwear business at Nike, he understood that supply chain reinvention and a different sourcing model were imperative for the future. But as he recently reflected, “There was no playbook, no Harvard Business School case study.” Today, as COO, he credits Nike’s sustainability journey as a principal catalyst for innovation. Since 2000 Nike has traveled from “not ready” to having committed to doubling revenue while halving its environmental impact — and, along the way, becoming a global beacon of sustainable innovation.
I often hear from non-manufacturing companies that, since they don’t have supply chains nearly as significant as those of manufacturers, they’re already doing a lot of what they could do: telecommuting, putting solar panels on their office buildings, recycling, community volunteering, etc. All good. But what about the products and services offered? What about the cable company with 17,000 vehicles that doesn’t consider how choosing to develop a new set-top box vs a new software interface may be much more likely to ultimately result in more repair trips for those trucks? What about the software company that doesn’t consider how one new feature that causes latency in the software’s response times, vs another new feature that doesn’t, increases loads on its data centers (more energy, more emissions — especially with millions or even thousands of users)?

It turns out that deciding if you’re ready is a lot like deciding if you’re happy. The only thing keeping people from deciding they’re happy is, well, just deciding. Just as happiness is a choice, so is choosing to decide you’re ready. “Ready” doesn’t mean totally or even confidently prepared. The sustainability journey has never been all or nothing. It’s much more like learning to walk than jumping out of an airplane. So, here’s a starter checklist to help you know when your company is ready — and any one of these can be enough of a spark to light a fire:

1. At least someone in senior management has started tuning into the notion that the company’s future likely depends on affordable, renewable natural capital and a supply chain that can withstand the mounting pressures of a hotter and scarcer world.

2. At your shareholder meetings, investors have begun asking what you’re doing to reduce your emissions, or conserve water, or reduce the toxins in your products or packaging, or even how you’re managing the risks of stranded assets.

3. Your competitors are cleaning up their supply chains and committing to significant, quantified reductions in environmental footprint and/or natural capital dependencies.

4. Your employees and candidates are more frequently asking about the company’s purpose and values as they relate to being a force for good.

5. You feel a twinge of envy whenever you read about true sustainability leaders taking bold action and getting results.

Notice I didn’t mention regulatory/compliance pressure. Regulators don’t care if you’re ready. This is all about proactive, voluntary risk management.

Ready or not — volunteer your company to be more resilient, more admired, more profitable. If someone more influential than you in your organization is stopping you, you may be working for the wrong company. Or that may present an opportunity to show your personal leadership by more aggressively evangelizing the business case for sustainability until your company can say, like sustainability leaders today once said, ready or not — here we come!