A new study on sustainability by Accenture and the UN Global Compact* affirms what I have been preaching for the last two decades, that sustainability is critical to a business's future success. The largest study of its kind showed that 93 percent of UN Global Compact CEOs agreed with the importance of a sustainability strategy for their own companies.
What was the biggest motivator for these CEOs to take action on sustainability issues? Not surprisingly, "strengthening brand, trust, and reputation" was identified by 72 percent of the respondents.
And it's no wonder, with BP and Toyota being the 2010 poster children of what can happen when core values of responsibility and sustainability aren't infused into the culture and job description of every employee on payroll. In fact, many of the 766 CEOs who responded believe that "business that is both sustainable and profitable requires efforts by people at all levels of the corporation." A fundamental shift since the last Global Impacts study in 2007, this recognition by CEOs is significant, and hopefully is the harbinger of real change to the business-as-usual attitude that we've become accustomed to seeing.
On a broader scale, the study revealed that business is taking sustainability more seriously and there is strong belief that, within the decade, a tipping point will be reached that brings sustainability from the periphery to the core. The CEOs surveyed have finally recognized that having a siloed sustainability initiative, while fodder for the annual report, will not in actuality get them very far. Instead, sustainability will need to be embedded into everything from corporate mission to operating strategy and tactical execution.
As Bill Breen and I discuss in our recent book, The Responsibility Revolution, being a genuine socially and environmentally responsible company will be the only way to compete and win in the 21st century.
Nike, one of the companies we profiled in our book, has undertaken just this kind of radical change. Nike's long slog on the road to improving conditions in its contract factories, combined with some early but limited successes in recycling and green chemistry, led it to conclude that incremental change is a woefully inadequate response to the environmental and social problems that all companies face. Thus, their sustainability team was charged with putting the sustainability ethos at the heart of what Nike does, which is innovation and design. The decision was made to create products that live and breathe sustainability.
Nike determined that the CR team needed to work at the beginning of the innovation pipeline, where strategy is set and creativity occurs, rather than at the end, where outcomes are audited and after-action CR reports are filed. They accomplished this by changing their thinking. Instead of treating sustainability as a compliance or risk-management function, the CR team acts as an idea lab that pushes innovation, but at the same time allows business units to ''own'' sustainability and include it in their day-to-day work.
Nike also took advantage of technology to help designers make sustainable choices at the beginning of the process. The company's think tank has created a predictive tool that quantifies, in real time, the ecological impact of each and every one of the designers' choices: it's a desktop program called the Considered Index.
The index allows Nike to make every designer an agent of sustainability. When they see that a better score can be achieved by reducing adhesives, which emit VOCs, they develop snap-together tooling that completely eliminates adhesives. The designers chip away at their overall environmental impact, one decision at a time.
So how does a company change gears like Nike has and move their workforce from outdated, shortsighted habits to new sustainable methods of doing business? Certainly guidance and inspiration from the C-Suite is key. But 86% of CEOs concurred that they must increase their investment in management training for sustainable strategies and operations.
One approach to delivering this type of training cost effectively is The Sustainability Institute, an online learning portal developed by Kaplan Eduneering and Seventh Generation that helps companies understand corporate responsibility and weave it into their corporate practices. Companies wishing to stay ahead of the sustainability curve and impending government mandates would be wise to research training, consulting, and software options that enable them to make the transition as swiftly and profitably as possible.
*The United Nations Global Compact is strategic policy initiative for businesses that are committed to aligning their operations and strategies with ten universally accepted principles in the areas of human rights, labor, environment and anti-corruption.
Jeffrey Hollender is the co-author of the recently published book, The Responsibility Revolution. The Co-Founder and Executive Chairman of Seventh Generation, and a Co-Founder of the American Sustainable Business Council and the Sustainability Institute, Hollender also shares his insights at The Inspired Protagonist, a leading blog on corporate responsibility.