The evidence is overwhelming. The commercial opportunity is obvious. Risks are diminishing. And yet, when I walk into a boardroom, as I have done now for many years, I still sense resistance to putting sustainability at the very core of any business strategy.
'I’ve already got a whole team on this, we’re on top of it', is a statement I often hear.
But companies could be doing much more with sustainability innovation. Boards and directors just need the right kind of persuasion. We have found a few strategies that work for us at Re_Set, let me tell you how they work.
Broadly speaking, blockages are commonplace and uncomplicated.
1. Lack of awareness
Thankfully public activists like David Attenborough, Greta Thunberg, Yvon Chouinard and Prince Charles are taking care of that. More commonly, in boardrooms, it is a case of scepticism, or the refusal to see. Corporate executives might want to avoid inconvenient truths. This barrier is the hardest to overcome, sometimes almost impossible, but we have found ways to crack the hardest shells.
We routinely make grown-up executives cry.
We create a sense of urgency and encourage the audience to radically change their thinking through a high-impact 'burning platform' education module that we deliver in boardrooms as a speech backed by strong visuals. We routinely make grown-up executives cry.
2. “The “where do I even start?” syndrome
In some boardrooms, there is a sense of being overwhelmed by it all.
“Business as usual is the biggest barrier to innovation", I used to preach to my clients when explaining the transformative power of innovation. This is even more true when it comes to sustainability. There is so much disruption to deal with here and now, and executives are so busy, long-term risk and opportunity on the scale of sustainability is often kicked into the long grass.
It doesn’t help that sustainability is a complex topic, with its own vocabulary, network, regulatory framework and interdependencies, and reminds me very much of the digital cycle that started 20 years ago. It took at least a decade for boards to grasp digital fully and push it to the top of the agenda. Except sustainability is digital on steroids, in terms of its complexity but also its gigantic impact, for better or for worse. So, let’s act faster this time, please.
3. 'Look at how much we’re already doing'
Many businesses already have sustainability programmes and initiatives. But the problem is that they are often dotted around and unconnected by a higher purpose — so-called 'project syndrome'.
Sustainability often doesn’t sit in the right place internally, or isn’t given the priority status it deserves, either sidelined, or suffocated by hierarchy, lack of scale.
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This is why we place sustainability in the strategy bucket, and only deal with CEOs and boards. It will, in time, find its way down to marketing, operations, and the risk register. But often the equation starts upside down.
4. “There’s no financial case for it”
Perhaps my biggest bugbear with the investor community, but present in boardrooms, too, is the idea that there is no financial case for sustainability. True, it is daunting to change supply chains or processes that took decades to form. But many choose not to look at the benefits these can bring.
As Alan Jope CEO of Unilever maintains: “The business case for sustainability is unequivocal”.
As Mark Carney, former Governor of the Bank of England, said: “Let’s transform an existential threat into the biggest commercial opportunity of our time.”
The planet’s wealthiest businessmen, Bill Gates, Elon Musk and Jeff Besos, are now all doubling up on their climate crisis interest. Shall I go on?
How to unblock the blockages
To solve these common blockages, I have learnt a few important lessons along the way. Let me reveal the secret first: sustainability touches people’s hearts. It presses on visceral instincts.
Let me reveal the secret first: sustainability touches people’s hearts.
Worries about our species and the natural world’s survival are central to the most informed and altruistic. For everyone else, there is the guilt of letting down the next generation, and a desire to be loved by their children and grandchildren, who are often demanding change and action.
Do we want to be remembered as the generation that did nothing — “the inactivists”, to quote author and Professor Michael E Mann?
Once most have been activated, as they will, by the enormity of the narrative and the positive energy such 'awakenings' release, other barriers will fall easily.
As a certified B Corporation ourselves, we can testify to the sheer power of purpose in business. It drives:
- Supply — candidates are flooding to us
- Demand — clients want to work with us
- Resilience — only 33% of B Corps reported the need to implement the UK furlough scheme to save jobs in April 2020*
- Growth and profit — B Corps have experienced an average year-on-year growth rate of 14%, according to analysis carried out by B Lab UK. That’s 28 times faster than the national economic growth of 0.5%.
Patagonia is often cited as the leading light in purpose-led strategic success. When they go against the tide and maintain or raise prices on Black Friday to give profits back to the planet, their customers buy more, not less. 'Purpose awakenings' are now reaching industries not typically associated with ethics or sustainability.
Blackrock CEO Larry Fink’s sustainability inflexion point famously came to him while fishing.
Blackrock CEO Larry Fink’s sustainability inflexion point famously came to him while fishing, lamenting on the disappearance of wild salmon. Since then, Blackrock has been one of the most vocal financial institutions about the sustainability imperative — whether the market and customers believe them yet is another matter.
Once you have touched the heart, the head follows much more easily. Suddenly the fog around information overwhelm lifts, and sustainability takes its place and becomes what it is: the biggest strategic threat, and opportunity, of all times. From here, CEOs and exec teams then proceed to treat it as such. We can then work like any strategist to formulate a plan.
We use the trojan horse strategy — sustainability can enter mindsets through the small door.
Beyond this, there is what I have come to call the trojan horse strategy — sustainability finds its way into the answer to pretty much any strategic question we are posed, such as 'what is the future of this business division', or 'how do I innovate?' Sustainability can enter mindsets through the small door. Not because we push it there, but because it is very rare that it is not mentioned either as a challenge or as a solution. Once the door is open, all that’s left to do is to push it firmly!
Once inside, sustaining momentum is crucial — though it can be as difficult, if not more, as coming up with the impetus for change in the first place. For that, my solution is the discipline of innovation. Using innovation practices such as agility, test and learn cycles and engaging cultural programmes, will make the difference between strategic theory and action.
Learn from the mistakes of digital and not leave sustainability in a silo.
In all of this, my advice is to learn from the mistakes of digital and not leave sustainability in a silo but integrate it with company strategy and cross-functionally straight away (saving perhaps 10 years, time which we do not have).
Do not underestimate the cultural change that is needed, but be confident that the world needs it, and your business wants it.