Changing mind-set, information sources, decision-making processes and reporting are probably the biggest organizational challenges faced by both the public and private sectors in responding to the “sustainability revolution”. Although many organizations now have sustainability policies, relatively few have robust systems and procedures to embed these consistently and effectively into the “DNA” of their businesses.
A4S has identified the 10 main elements required to embed sustainability successfully in an organization. These are:
- Board and senior management commitment
- Understanding and analyzing the key sustainability drivers for the organization
- Integrating the key sustainability drivers into the organization’s strategy
- Ensuring that sustainability is the responsibility of everyone in the organization and not just of a specific department
- Breaking-down sustainability targets and objectives for the organization as a whole into targets and objectives which are meaningful for individual subsidiaries, divisions and departments
- Processes that enable sustainability issues to be taken into account clearly and consistently in day-to-day decision-making
- Extensive and effective sustainability training
- Including sustainability targets and objectives in performance appraisal
- Champions to promote sustainability and celebrate success and
- Monitoring and reporting sustainability performance in an integrated way.
For further details scroll down.
A4S also created a web-based tool or methodology to enable sustainability issues to be taken into account more robustly and consistently in day-to-day decision-making. Find out more about the Decision making tool.
10 main steps to Integrated Thinking
1. Board and senior management commitment
Senior management needs to be committed to the process of embedding sustainability. In particular the Chief Executive needs to show urgency in both action and message. Only when the enthusiasm and motivation comes from the top will sustainability become an essential and unquestioned part of an organization’s procedures.
Larger organizations often establish a Board committee to identify and address environmental and social issues, that might otherwise be marginalised during a full Board meeting. Another option is to broaden the scope of more traditional standing committees to include sustainability, for example the audit committee.
2. Understanding and analyzing the key sustainability drivers for the organization
Few organizations have unlimited resources to dedicate to addressing sustainability issues. It is therefore important for each organization to determine which sustainability areas are the most important for it, and to understand how sustainability in these areas affects reputation, brand and relationships with key stakeholders. In other words the organization’s effectiveness and, if it is a business, its long-term profitability and survival. It is, of course, important that this analysis should focus on the business or operating case for sustainability.
It should include an assessment of the impact of sustainability issues on the organization’s own staff, operations, premises and other assets, also on its suppliers, customers and related communities.
It is important that the sustainability analysis is quantified (i.e. backed-up with numbers) to the greatest extent feasible. It is also important for an organization to ask and understand what its customers, investors and other stakeholders expect. This understanding will enable development of an approach that reflects all material stakeholder priorities. In discussions with stakeholders the organization can also begin to identify an appropriate set of qualitative and quantitative performance indicators. Identifying the sustainability drivers clearly will enable them to be communicated internally and externally more effectively.
Considering relevant frameworks and standards can also be helpful. There are frameworks and standards that address a broad range of sustainability issues including the environment, human rights and business ethics. Some are cross-sectoral and others are sector specific. Signing up to an international or national framework or standard can add credibility to the organization’s sustainability programme, as it will ensure that many of the important issues are covered in a way that is generally regarded as effective. Signing up may also give access to valuable guidance, data sources, best practice research, contacts and reviews.
3. Integrating the key sustainability drivers into the organization’s strategy
Having identified the key sustainability issues for the organization and quantified their impact to the greatest extent possible, it is important that they are incorporated and reflected in the organization’s strategy as an integrated and connected part of the whole, rather than as stand-alone issues and objectives.
4. Ensuring that sustainability is the responsibility of everyone in the organization, (and not just of a specific department)
Many organizations have sustainability plans and objectives but they tend to be the responsibility of a separate department and part of a separate mind-set. To put it another way, the foundations of good sustainability information and actions have often been put in place, but have been sidelined in a corporate social responsibility department and report. This fulfils a perceived need but fails in its broader purpose because sustainability has been isolated within the organization.
It is essential that the connection between sustainability measures and the organizational performance is understood and that sustainability is embedded in mainstream management processes. Sustainability objectives are unlikely to be achieved fully unless this is the case.
5. Breaking down sustainability targets and objectives for the organization as a whole into targets and objectives which are meaningful for individual subsidiaries, divisions and departments
There have to be effective mechanisms for translating strategy and top-level enthusiasm into the day-to-day operations of the organization. Too often, forward-thinking sustainability strategies lose focus somewhere between the strategy document and everyday decision-making.
There can often be a lack of clarity as to what ‘sustainability’ means and which measures are the most effective and most relevant in a particular situation. It is essential that targets and objectives set for the organization as a whole are broken-down into targets and objectives which are meaningful for individual subsidiaries, divisions and departments.
6. Processes that enable sustainability issues to be taken into account clearly and consistently in day-to-day decision-making
Sustainability factors will not be taken into account by middle-managers and others unless they are given the authority, processes and information to be able to do so. For example, in setting a target for the reduction of greenhouse gas emissions during the production and use of a particular product, the manager concerned will not be able to respond meaningfully unless information about greenhouse gas emissions at each life-cycle stage is given and unless he or she is able to balance the cost of reducing emissions with other factors such as pricing, quality and availability of raw material supply. Also if he or she does not have the authority to take action then actions will be inhibited.
There is much confusion about the pros and cons of various sustainability approaches even in relatively simple areas. For example, is more energy saved by using paper towels or electric hand-driers or by flying in fruit from Southern countries or by growing it in the UK in heated greenhouses? It is therefore important to ensure that the relevant information and decision-making processes are available to those having to take sustainability issues into account. It is this process of connecting sustainability related issues and conventional financial criteria that is critical.
This is an area where embedding sustainability is difficult to achieve in practice, but it is also a litmus test for whether the embedding process has worked. It is easy for people in procurement to want to act sustainably but still to choose supplies on the narrow basis that they are the cheapest, because they have no other reliable and robust decision-making approach.
As part of the Project we have developed a web-based decision-making tool to show how this can be achieved in practice. Click here to learn more about the Decision-making tool.
7. Extensive and effective sustainability training
Creating a culture of sustainability begins with staff, throughout the organization, understanding not only what sustainability means generally, but what it means and why it is important in their specific context. Training is key to this and is particularly important and relevant in this developing area.
Cynicism about the sustainability agenda can be an issue, with sustainability often seen as adding expense, and therefore conflicting with the principle of value for money. It will take time to raise awareness and engage with every person within the organization so that they know what the sustainability strategy means for them and how they should act.
Where the appropriate training skills are lacking they can be brought in from outside. Many organizations such as accountancy bodies and business schools have included sustainability as a major core of their work in recent years. Learning programmes should be established and partnerships with outside bodies or with other companies or organizations in the same field should be explored to embed sustainability through understanding.
8. Including sustainability targets and objectives in performance appraisal
A range of techniques can be used to influence behaviour, including training, awareness raising, objective setting, remuneration, promotion and other incentives.
It is essential that sustainability issues are reflected fully when setting objectives, assessing and remunerating staff and considering promotions.
9. Champions to promote sustainability and celebrate success
In order to embed sustainability successfully there need to be people who understand the issues and have the capacity for change at every level. In other words champions need to be identified who can be encouraged and relied upon to use their passion and commitment to embed the strategy. It should become a reinforcing model. From the board of directors down to the lowest levels within the organisation there should be active involvement with sustainability issues to influence thinking and behaviour throughout the organization.
Celebrating success and showcasing good practice can also encourage further innovation and provide case studies from which others can learn.
10. Monitoring and reporting sustainability performance in an integrated way
Accountants are inclined to say that if it isn’t measured it isn’t done and reporting sustainability performance in internal and external accounts is essential. Sustainability measures need to be reported in a way that is part of and connected to the other key measures, financial and general, which inform performance evaluation – an approach known as integrated reporting. Measuring sustainability factors and establishing them at the heart of decision-making ensures that sustainability is embedded in the day-to-day life of the organization.
In order to maintain support for sustainability improvements it is necessary to demonstrate how the organization has benefited from the changes made. This requires monitoring and reporting back on progress in achieving sustainability priorities.