Community Updates

Securing Buy-in From the Top – 7 Benefits of Integrated Thinking

Published 8 years ago | About a 3 minute read

In spite of recent advances, the reality of life for many CSR and sustainability officers is still pretty disheartening. Many senior executives and key internal stakeholders still think of corporate social responsibility (CSR) as an afterthought – another box to check on the corporate checklist. One recent study found that over 71 percent of companies in the U.S define their CSR spending as in-kind donations and free product giveaways. Another 16 percent define it as cash donations, and the remaining 13 percent as employee volunteering and giving.

The challenge we see for CSR and sustainability teams is the need to sell embedded sustainability programs internally — convincing their peers and leadership teams that the true benefit of corporate sustainability cannot be unlocked by well-intentioned, but siloed initiatives that focus only on philanthropy and volunteering.

When an organization’s sustainability strategy clearly connects to its mission, vision, ethics and long-term financial goals, it will protect a company’s reputation, drive innovation and employee engagement, satisfy consumers, attract and retain top talent, demonstrate compliance, and lead to market differentiation – all of which are key ingredients for long-term growth and profitability. All of this hinges on a shift in perspective: *Sustainability is less about mitigating risk than it is about finding opportunity.*And therein lies the rub.

Change isn’t an easy process in any organization. But for a large business (with thousands of concerned stakeholders and a P&L with millions of dollars hanging in the balance), sustainability initiatives often don’t seem like a sound investment. So, the challenge for many CSOs is getting their boards and corporate leadership to think beyond short-term quarterly and yearly earnings and realize the substantial value that sustainable thinking can have on mid- to long-term growth.

To move this conversation forward, here is a list of seven benefits organizations have seen after integrating sustainability into overall business strategy:

Increase in sales

Paul Polman, CEO of Unilever states, “We recognize, for the first time, and in pure monetary terms, that the cost of inaction is now far greater than the cost of action.” For giants like Unilever, the proof is in the bottom line. Of the more than 400 brands Unilever sells, those with the strongest sustainability credentials have seen sales grow at or near double-digit rates since 2012.

Innovate and differentiate

Embedded strategies help business rethink the way existing products are being created, opening up opportunity to boost corporate image, reduce material costs, gain an edge over competition, or carve out market share with an entirely new demographic of customer – all while reducing their impact on the environment. The success of Nike’sFlyknit running shoes and Levi’s Water<Less jeans provide two two striking examples of innovation driven by sustainability.

Enhance and build reputation

Warren Buffett once said, “It takes 20 years to build a reputation and five minutes to ruin it.” Although sustainability is as much about opportunity as it is about risk, organizations that can identify and communicate their greater brand purpose have historically outperformed their competition.

According to the 2015 Meaningful Brands Report from Havas Media, a meaningful brand has a 46 percent higher “share of wallet” (defined as how much a person is willing to spend on a particular product) than a less meaningful brand. This observation holds true on a macro scale too; the top 25 meaningful brands outperform the stock market by 133 percent.

Future-proofing

Good business practice demands that organizations understand and embrace the impacts and risks that external forces can have on their business – both today and in the future. (Will legislation affect raw material supplies? Will new environmental policies impact operational costs? Etc.)

For better or worse, the world is changing and evolving at an unprecedented pace. An embedded sustainability strategy will identify the material issues that impact your business so that you can get ahead of change. By fully embracing external challenges and looking for ways to reduce impact, sustainability strategy can move a business’s outlook for the future from reactive to proactive.

Recruit and retain

The 2016 Deloitte Millennial Survey reports that nearly 44 percent of millennials have turned down a job offer because the company’s values did not match their own. Nearly half (49 percent) said they have rejected assignments at work because of conflicts with their ethics. And 56 percent have sworn to never work for specific companies because of the organizations’ values.

It’s becoming abundantly clear that the next generation of talent are looking beyond financial compensation when choosing a job and seeking out organizations that understand their role in protecting our planet.

Cut costs

Whether it’s the reduction of materials in your manufacturing process or finding innovative ways to reduce energy and water consumption, businesses that have fully integrated sustainability have seen dramatic decreases in overall costs – both internally and externally. A business can find additional cost savings and impacts when similar reductions occur across their the supply chain.

Unify teams and align decision making

A clearly-defined strategy that highlights a comprehensive outline of the economic, social and environmental challenges impacting its future success can be used as a decision-making framework that unites business units – ensuring that individual strategies and tactics are aligned. This increases consistency of decision-making across the entire organization.

The takeaway

CSOs and CSR teams looking to push their strategies forward can take solace in knowing that they are not alone. Global leaders like Nike, Unilever, BMW and Adidas have lived through the experience and realization that, in order for business to truly integrate, all parties must realize that sustainability and profitability are not mutually exclusive. Thankfully, they also believe it’s in everyone’s best interest to share insights on the challenges they’ve have had to overcome along the way. Learn what you can from the companies that are further along on their journey, but realize that every business is unique and that no strategy is one-size-fits-all.