Organizational Governance Marketing & Communications

To Develop Long-Term Sustainability Plans, Look to Oil Companies

Sustainability conversations are changing. Just look at the National Association for Environmental Management’s (NAEM’s) thorough “Planning for a Sustainable Future” report released this week: EHS and sustainability leaders are quickly solving operational questions of compliance, measurement & metrics, and target-setting. Now, they’re being called to convene organizational leaders in the face of changing climate, consumers, supply chains, and competitors — three forces that challenge the traditional near-term planning processes endemic to businesses. They’re even grappling with reframing corporate business models for people and environmental stewardship.

Brand Provided | By Rob Snyder | Published 9 years ago | About a 5 minute read

Sustainability conversations are changing. Just look at the National Association for Environmental Management’s (NAEM’s) thorough “Planning for a Sustainable Future” report released this week: EHS and sustainability leaders are quickly solving operational questions of compliance, measurement & metrics, and target-setting. Now, they’re being called to convene organizational leaders in the face of changing climate, consumers, supply chains, and competitors — three forces that challenge the traditional near-term planning processes endemic to businesses. They’re even grappling with reframing corporate business models for people and environmental stewardship. These are longer-term, strategic issues requiring different planning methods than the industry is used to.

“Nobody really knows what to do next. But we do need to recognize that we’ll only have a certain amount of money to spend on uncertain futures and we’ll actually have to design for adaptation rather than for something that we believe to be certain.” — NAEM “Planning for a Sustainable Future” respondent

Climate, Consumers, Supply Chains, Competitors

The issues of today’s multinationals are multi-faceted and interrelated; truly addressing these challenges may mean rethinking settled practices perfected over long histories. Climate change will not only push businesses to lower their carbon footprints and resource use, but also require them to rethink their operations locations’ viabilities for the longer term. Consumer demographics are changing (hello, millennials!), driving rapidly shifting product preferences, virally dispersed activism both to companies’ benefits and horrors, and the rise of a new crop of megacities. Supply chains must be reassessed to characterize risk, as well as ensure all suppliers are reporting resource/emissions metrics. And new competitors are emerging, testing new business models and technologies with the intent to upend incumbents.

All on the table, it’s more than a little overwhelming to project these on an 18-month cycle, never mind trying to predict the world in 10, 15, or even 25 years.

How do you even begin?

An Unlikely Guide

When thinking of climate change and sustainability, most don’t first think of oil companies as the heroic protagonists. But these companies, in particular Royal Dutch Shell, are renowned for their long-term vision. Shell has been using scenario planning for nearly 50 years and has been renowned for its strategic foresight into periods of turmoil and disruptive change (such as OPEC oil price crises of the 1970s and, not surprisingly, climate change).

Crystal balls and clairvoyance are outside our job descriptions, and scenarios are the best way to not stake a career on a prediction of the (inherently unpredictable) future. Using scenarios, you can bring your organization together to consider different potential futures and make aligned strategic choices to handle the long-term climate change, consumer, supply chain, and/or competitive issues you’re undoubtedly facing.

Five Steps to Scenarios

There are many guides to creating scenarios. I recommend avoiding 2x2 graphs used to plot possible futures, as it limits the creative process. Instead, here are five steps to pulling together provocative, compelling scenarios for your organization. (This method also works for those sustainability leaders convening NGO, community, or government stakeholders on these strategic issues.)

Interview and learn. For each of the internal (and external) stakeholders who will be part of the meeting, hold interviews to understand each person’s vision of what the future holds on your specific topic. Make the time to interview other relevant experts within your organization, from the operators to the C-suite. Especially make sure to find the people with contrarian views. You’ll likely be blown away by the range of answers – but you’ll also hear common threads across interviews.
Build scenarios. The ‘common threads’ across interviews can form the basis of scenarios. Think of the different worlds explained, and work with a team to build out 3-6 different futures. These futures should be a few paragraphs long, set in the future (e.g., 2025: Emerging Cities Future), and include your business’ strategic actions as part of each future (Note: your company’s strategy will almost certainly be different in each individual future).
Prepare workshop. It’s wonderful that you’ve pulled together scenarios, but now how do you get your stakeholders to make decisions based off of them? One way is to bring the entire group together in a workshop to map backwards from each scenario to today, understanding which events must happen in the world to make each future come to be. These workshops are typically longer than one hour (I typically aim for two full days), and are necessary to align business leaders on what the likely futures are.
Make strategic ‘no regrets’ choices. You’ll notice that some events and decisions are common across several of the scenarios, paving the path for your organization to decide on a few tactical steps during the workshop. It’s also essential to make a roadmap for strategic decisions as time goes on.
Refer back to scenarios as time goes on. Scenarios aren’t like typical strategies, which are easily lost, forgotten, and half-implemented. When run successfully, a scenario workshop tells the organization which turning-point events they should be watching for; your leaders will read the news differently, connecting the headlines to scenarios. “I saw this headline in the news today,” you may hear months or even years down the line. “I think we should get back together to talk about that once-improbable Scenario C!”