Sustainability can be a Strategy: Role of Young Managers & HR in Environmental Management

If companies can be comfortable taking stern public stands on issues like workplace violence, gender discrimination and work-life balance, then why not on the environment?

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During the past few years, there has been an increasing trend among companies across the globe to voluntarily embrace and implement a wide range of sustainability practices. The fast accelerating rate of this adoption has also triggered an argument about the nature of sustainability and its long-standing consequences for organisations. Is the implementation of sustainability practices a form of strategic differentiation by the companies? Can it lead to greater financial performance? Or, is it a strategic inevitability that can guarantee corporate survival but not necessarily outperformance?

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As more and more young people enter the workforce, the concept of green companies and ethical environmental management is gaining widespread popularity. Some say, sustainability is making its way in a company’s strategy as a “common practice” and, as such, it can never help the business in forming a competitive advantage. On the other hand, some experts believe that sustainability can be profitable because adoption of environmental or waste management systems has resulted in cost reduction and improvement in overall profits. 

While such practices sometimes include ESG (environmental, social, and governance) ratings — questionably few, if any, companies would expect to establish a competitive advantage simply by adopting them. 

Whatever the case, sustainability can indeed be a strategy that can easily generate a competitive advantage and consequently result in profitable financial performance. However, businesses need to draw a clear differentiation between operational efficiency and strategy. With increasing emphasis on mission, vision and values (MVVs), companies can incorporate the concepts of sustainability into the DNA of MVVs, and can make environmental management part of their business quality process. Since strategy is all about transforming MVVs into competitive advantage and performance output, such a strategy can indeed be different and difficult to match.

According to the data from MSCI ESG Ratings, the largest provider of ESG data in the world from 2012-2018, about 4,000 companies across different industries showed that sustainability practices have merged over time. These results prove that companies have adopted an increasingly similar set of sustainability practices during the sample period, increasing the likelihood that they are becoming corporate practices and, as such, are less probable to oblige as a strategic differentiator and more likely to be a strategic compulsion. 

As work dynamics and corporate values shifts from “just being financially profitable” to “highly profitable and considerate towards environment and society”, young business owners, managers and HR professionals need to find ways to incorporate sustainability and environmental protection beyond the narrow focus on the cross-sectional understanding of sustainability practices. Sustainability in today’s competitive and technologically driven work environment can be both a necessity and a differentiator. Some of these activities are simply becoming “best practices” and so are a stipulations, but ESG data shows that a large number of companies are developing real profitable strategic advantage by embracing sustainability measures which their competitors can’t easily match.

However, the role of HR is important because a shift in the values can result in tremendous problems for an organisation. Companies that are used to developing profits at the cost of environmental, economic and psychological damage to individuals and society, needs time, commitment and efforts towards this paradigm shift. As per the United Nations Department of Economic and Social Affairs’ report, “Youth and the 2030 Agenda for Sustainable Development”, there are 1.2 billion young people accounting for 16 per cent of the global population. The active engagement of youth in sustainable development efforts is central to achieving sustainable, inclusive and stable societies. The HR needs to prepare the future leaders and workforce with the values based on morals that environmental management is not just part of a corporate social responsibility plan, but the entire concept of sustainability is beneficial for the society as well as profitable for the business. 

And, while young executives do progressively seem to be moving towards accomplishment on climate change, public decrees to cut their own emissions or developing renewable energy are becoming the norm in big companies. However, only time will tell if it’s enough to keep  the next generation of customers and the millennial content. If companies can be comfortable taking stern public stands on issues like workplace violence, gender discrimination and work-life balance, then why not on the environment?

It may just take the youngest breed of corporate executives and managers to get companies to take a real and public stand for collaborative global action on climate change and environmental protection without compromising on the profitability; after all, if they don’t, they seriously risk getting out of step with an entire generation of employees and customers who are and will be the new ‘millennial’.

Khalil Zafar

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Khalil has over 10 years of rich and progressive international experience in strategic HR, training, leadership development, talent acquisition, organizational renewal, business process automation, performance management and organizational/strategy development.

Currently he is working as senior manager HR/ Partner-Organizational Renewal at Straxecute Consulting (UAE & Pakistan). He is also a professional trainer/instructor who has not only delivered trainings to corporate clients, but has also taught students at higher education level to help them develop their management knowledge and skills.

 Khalil has completed a M.Sc. in Organizational Psychology/HRM, along with a master's degree in mass communication. He is also an IRCA certified internal auditor for quality management systems.

He has taught people from different nationalities including India, Pakistan, Philippines, Lebanon, Jordan, Cameron, China, Scotland and Canada.