Sustainability has become a business imperative for essentially every company today – large or small. Most everyone has their own description of what sustainability means for their company, and a framework, or frameworks, from which they are working. The approach companies choose in their pursuit of business strategy is evolving; as commonly referenced and supported frameworks also evolve and are implemented (for example: GRI, SASB, ISO, TNS, DJSI and others). Even with standard guidance and frameworks in place, implementation can look very different; particularly, when organizations integrate sustainability into their management system and daily operating processes. Integrating sustainability into strategy development and operations requires discipline and strong management leadership.
So what does it mean to be a ‘sustainable company’? There is not one answer, by nature of the breadth, depth and scope of sustainability. The greatest success seems to be evident, however, when companies are able to articulate priorities, and to measure and manage what they set out to do in the areas of economic, environmental and social performance. Companies with a clear business strategy have integrated holistic performance improvement objectives and measurement into the fabric of their management systems and communication with key stakeholders. Each company must map their path of sustainability in a way that is meaningful for them, while meeting the needs of all their stakeholders.
Looking from the Inside-Out: What are the internal priorities driving sustainability to be integrated into Operational Excellence programs?
An inside-out approach starts by looking at the type of business, company culture and how the business operates, with a goal of Operational Excellence. A manufacturing company, for example, will have very different priorities than a service-based firm. Priorities must be made in order to set strategy and operational objectives, with company leadership asking themselves: What are the critical impacts of this business on the world? This is necessary in the development of meaningful goals and to identify specific metrics and methods to track progress against goals. Key operational goals should span across the economic, environmental and social aspects of the business. Examples include, but are not limited to:
Economic: customer relationship management, governance, risk and crisis management, financial reporting and even taxation
Environment: Resource use, emissions, water and energy management and environmental reporting
Social: Talent attraction and retention, safety performance, labor relations and social reporting
The key is not to treat sustainability as a separate activity, but to integrate it tightly into company strategy and management systems. Further, those elements of business operations that most effectively drive long-term, continuous improvement and operational excellence must be prioritized.
Looking from the Outside-In: What are the external impacts of most relevance?
Looking from the outside-in, a company must extend their strategy beyond their own virtual and physical company walls, to further identify key impacts and areas of influence – from customers to suppliers to investors and government. We operate in a 24/7 globally interconnected world, where often the interactions outside of company operations can have an ever greater impact on long-term sustainability. The footprint of a company client base and extended supplier network can ultimately impact the sustainability of an organization.
Investor demands and expectations are changing, requiring a different social consciousness for companies, and regulations are evolving globally to better address these challenges. For example, what we consider standard financial reporting today was not always the norm. Similarly, we are experiencing a growing trend in the changing requirements for ‘non-financial’ metrics reporting around the world. The expectations of society are changing as companies work to anticipate, plan for, lead and ultimately, compete, in this emerging and critical area of business.
As organizations around the globe advance efforts in addressing real-world challenges, sustainability strategies must continue to evolve and adapt. Join the conversation at the ISSP Conference 2014, where these issues and more will be explored by sustainability professionals on the front lines of shaping the future of the profession.
Marilyn Johnson is VP of the Board of Directors of the International Society of Sustainability Professionals. The ISSP Conference 2014 will be held November 12-14 in Denver. For more information, visit http://www.sustainabilityprofessionals.org/