Sustainability has finally gone mainstream (or, at least, the desire to be seen as doing important work around sustainability and benefit from sustainability credentials has gone mainstream). Well, OK, at the very, very least the desire to be seen as having great sustainability programs is mainstreaming among large multinationals and a growing wave of environmentally or socially minded startups.
Needless to say, the several hundred largest global corporations command an incredible pool of resources and a huge amount of influence over the shape of the global economy. So, given all of this power, if the idea of leading on sustainability is mainstreaming among the largest corporations, we must be on the right path, yes? Surely they will quickly transform most of the global economy for the better now that they “see the light” and are convinced of the value of acting on it, right?
As things stand right now, I am not so sure. It seems to me that many companies either don’t truly get what it means to lead a systemic transformation*,* or they get it but they don’t know how to go about making a genuine difference at scale. As a result, there are several kinds of commonly missed opportunities that I run across almost daily while talking to hundreds of corporate sustainability practitioners in the United States and Europe. Here are five of these commonly missed opportunities that I find most puzzling:
1. Using the latest applicable science to inform strategy and guide action
Corporate leaders don’t seem to have great habits when it comes to checking the latest scientific breakthroughs, or even just the latest practical scientific consensus on any given sustainability topic. We routinely observe how important new user-friendly, scientific conclusions remain unnoticed or unused for years, sometimes even decades. Early adopters often have much to gain, and yet even they are often surprisingly late to react.
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In the context of sustainability, I keep seeing this happen on a number of levels. It’s happening around carbon-reduction targets and other science-based goal-setting questions. It’s also happening around common mainstream misinterpretations of cutting-edge economics and the way that distorts business behaviors. Speaking of behaviors, it’s also happening around a number of other social sciences, too – the ones that help understand human behavior and are useful in formulating win-win ways to interact with and reward employees, consumers and other stakeholder groups.
2. Connecting the dots between an appropriately wide array of impacts
A friend of mine likes to say that problems are often best solved when they get "mushed together" – when one tackles them with an understanding of whole systems at play rather than just isolated symptoms. A classic example of corporate failure to tackle an important problem on a systemic level is the case of growing inequality around the world. In their efforts to be ‘brilliant’ businesspeople and maximize profits in the short term, most multinationals are visibly contributing to deep social divides that are sure to act against the very forces that created them.
Another glaring bucket of examples can be found in the ways demonstrably unsustainable business models, such as ones based entirely on burning fossil fuels, are still being supported financially by governments and investors, even investors who profess purpose-driven, sustainability-aligned values. A similar pattern can be observed among companies that try to value natural capital. Although trying to lead on this challenging new kind of valuation deserves praise, most current attempts often limit such analyses to just one or a few kinds of ecosystem services – say, clean water and preserving a select small set of species – without examining the value of a wide array of other environmental and social impacts that are inseparable parts of the same picture.
3. Avoiding predictable surprises up and down the value chain
Many brands routinely go into damage control mode when something goes wrong in their supply chains, or when warnings are issued by Greenpeace or one of its peers. Why are such instances almost always an unpleasant surprise to the targeted brand? The answer is long and complicated, but one of the main reasons is that the vast majority of brands out there do not take enough care to study and truly understand their supply chains in their entirety. Too many supply chain sustainability programs are limited to engaging only tier 1 suppliers, or even less – having policies regarding tier 1 suppliers but not really communicating or investigating action on the ground in any way.
And, in the other direction, many are struggling with the downstream end of the value chain – retailers. It would pay off to get into the minds of retailers in order to understand the next generation of policies or other guidance retailers may have in the works in the near future, and yet very few consumer-facing brands are doing it. It has only very recently started to happen, very slowly, and mostly because of how proactive a few leading retailers have become. There is still much more work to do for virtually every company with a multi-layer supply chain.
4. Ensuring better communication and collaboration with the investor community
While awareness and valuation of sustainable practices continues to grow overall, investors are demanding more data, better data, and deepening engagement with their investment prospects. We are still witnessing important points of disconnect between corporate and investor perceptions, frequent communication breakdowns, and relative lack of properly equipped CFOs and Investor Relations teams that can navigate complex, emergent issues such as the chemical footprints of a variety of consumer products, and stakeholder demands such as shareholder activism. Underlying that cloud of confusion is another big issue – the almighty question of materiality. The debate around the most reasonable methodology for assessing material environmental and social issues continues to rage on. SASB is supposed to lead on that front and has indeed finished its assessment of material sustainability issues across 79 industries, and yet not all experts agree that SASB has got it right, all while corporate adoption of the SASB way is still uncertain.
5. Learning to stand on the shoulders of giants and not reinvent existing practical tools
Many corporate sustainability teams continue to regularly miss opportunities to save time and money by not knowing how to access and use many of the best-in-class tools necessary to perform common or routine day-to-day tasks – such as LCA analyses, benchmarking, preparing for specific reporting formats, and a range of valuation and ROI analyses, among others. One big reason is that the sustainability field as a whole is so new that there is bound to be a ‘Wild West’ period of many solution providers trying to establish best practices and tools. That said, there are now quite a few highly valuable frameworks and tools out there, but corporate practitioners continue to struggle to find them, understand them and build the skills necessary to utilize them fully. There is a lot of demand for more expertise on finding, comparing and choosing tools to support individual and organizational learning through curated curricular sequences.
Solutions exist and Sustainable Brands is here to help. We will be diving deep into ways to tackle all of these kinds of missed opportunities at our sixth annual New Metrics conference, taking place November 14-16, 2016 in Cambridge, MA. It is an event series based on the belief that a new economy is emerging that requires expanded methods for identifying, measuring and communicating all forms of business risk and value – including previously ignored economic, environmental and social impacts. New Metrics gathers courageous corporate leaders and solution providers actively shaping this evolving space, as well as those who want to learn how to adopt new metrics and practices that lead to better business performance in all the contexts described above.