A Leadership Roadmap for Sustainability Success

Achieving sustainability as a decisive organizational goal for companies requires executives to use a well-designed approach that produces tangible and measurable results.

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While sustainability and environmental, social, and governance (ESG) goals have finally made it into the main agenda of companies, these goals are often approached from a public relations (PR) standpoint, and as a way to satisfy stakeholder expectations. However, sustainability can only be made real in the context of any company's activities if there is a clear organizational roadmap to deliver on what it is truly meant to be: impact that can be seen and measured.

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More than defining general goals and reporting on what the company desires to achieve and represent, companies will get better results if a sustainability organization either external or within the company's structure is commissioned and enabled to design and execute a plan- and to be held accountable for it. More than throwing "sustainability" around as a PR sweetener, it has been shown that companies choosing very specific and easily understandable sustainability goals -such as reducing carbon dioxide emissions- and taking measurable actions to achieve them, and report on them, are seen as more transparent and seriously committed to what sustainability is generally perceived to be.

That's why hands-on approaches that executives can use to turn their companies into de facto sustainable organizations need to be taken into consideration.

FOCUS ON SPECIFIC SUSTAINABILITY GOALS

Companies that choose certain specific sustainability goals, and that are clear about them have much higher chances of success in this field. Moreover, companies that have a clear action plan to execute them do even better in the field- and allow for stakeholders to clearly see that meaningful traction is happening.

Using an ESG materiality assessment, a company can identify certain specific goals that are relevant to the business activity and connected to its work. Subsequently, forming a list of topics to work on, and a timeline of specific smaller tasks and goals in the context of a larger plan becomes an organic step that allows for much easier and more effective deployment of the necessary resources to execute them.

Decentralizing tasks is also more effective: instead of a "central sustainability desk," individuals or smaller groups within the organization can achieve more by focusing on micro-goals and tasks that will jointly build the desired sustainable impact.

EMPOWERING A LEAN CENTRAL SUSTAINABILITY OVERSIGHT

It's important that there is a central sustainability oversight, whether it is run by an executive commissioned for the task, or a team, and that this entity has decision power to plan and execute the sustainability policy of the company. This central oversight should also be lean, because it's intended to delegate and hold smaller teams and individuals accountable for certain tasks, and to make sustainability practices pervasive across the different departments of a company. This has been shown to work far better than a central entity seeking to do, supervise, and transform everything on its own.

The central oversight team should liaise with the board to keep the company's decision-makers aligned with the strategy, but it should also hold the necessary authority to work freely and swiftly to deliver measurable sustainable results. This way, the mandate it receives from the board regarding the official sustainable goals begins to take shape in an effective way without requiring approval for every imaginable step.

In short, delegating and creating a culture of accountability across the ramification of company personnel involved in sustainability is a key factor for sustainability success.

THE RIGHT STRUCTURE FOR EACH COMPANY

The only right answer to this challenge is to make sure that the sustainability structure of a company is aligned with its dimension and characteristics. Again, the main ingredients here are: one, a clear mandate from the board, two, a lean central oversight that coordinates but does not micro-manage, and three, individuals and teams working separately on specific tasks to bring together a combined strong result that ultimately every stakeholder can recognize.

In a nutshell, there are three possibilities:

  • A large centralized oversight can work well if it defines the specific goals to achieve, and if it has the resources and decision power available that are required to delegate to external providers the execution of tasks and deliverables.
  • A leaner centralized oversight with in-company teams, resources, and decision-making power can work from A to Z to ensure that the company produces the desired results based on its own human resources and general capabilities.
  • A hybrid central oversight that controls the greater part of sustainability processes and actions, creating specific units to achieve specific goals, but giving them the liberty to outsource and supervise specific tasks.

THE PROCESS IS AS IMPORTANT AS REPORTING ON IT

A decisive way to treat sustainability seriously is to act upon it, and not just report on goals, desires, and marginal measures that don't represent a cohesive approach. Many companies still over-focus on reporting on their sustainability policy and minor steps taken in the field, mostly from the PR and investor relations standpoint.

However, a truly effective sustainability success strategy sees reporting only as the last element of a strong chain. In other words, sustainability governance within a company, the processes through which sustainability goals are selected and worked on, the central oversight work, and the way by which external or internal teams work on specific goals, are crucial for sustainability success.

In fact, even from the reporting point of view, if a company wants to be seen as giving sustainability the importance it has, then reporting on the entire governance aspects and its process can be a very wise decision. Investors and stakeholders in general will be far more impressed with a company that "takes sustainability matters into its own hands" and that is transparent about every step it takes- from establishing a sustainability policy to executing every action point that turns it into a reality.

It should be highlighted again that a central oversight team needs to be enabled to make decisions, execute them, supervise their execution, liaise with the board, track results, and generate reports on what is being done and achieved. Regardless of the type of oversight structure that is selected, the end result must be the same- the process must be designed to work with no constraints and no unnecessary and counter-productive bureaucracy.

Having said that, this requires the board of the company to establish sustainability as a defining element of the business- so that, regardless of how complex the structure or business field of the company are, there are never doubts about the importance of the company's sustainability success, with everything it entails.

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