Taking the Lead on Sustainability: Closing the Gap Between Intention and Action
And yet, progress remains frustratingly slow.
The business benefits of ESG (environment, social, governance) are well documented but, as any leadership team worth its salt knows, implementing the changes necessary to successfully transition organisations over the long term requires an abundance of short-term focus, agility and vision.
Which, in turn, explains the appeal of ‘greenwashing’ to CEOs who’d rather perform than enact the sustainability practices they espouse.
It’s a dangerous game, though. Jo Sutherland, Managing Director at corporate communications specialist Magenta Associates believes that greenwashing can damage the public perception of sustainability as well as slowing its broader progress.
‘Greenwashing can prevent sustainable practices from being embedded in corporate culture by creating a false impression that a company is already doing enough to protect the environment, which can discourage them from investing in more sustainable practices.
‘This can also make it more difficult for those companies genuinely committed to sustainability to differentiate themselves in the market as it’s harder for consumers to distinguish who is authentic and who isn’t – which can erode trust in sustainability claims altogether.’
In fact, if leaders use their influence to create a false eco-narrative, they risk not only trivialising the realities of climate change but also losing the hard-won trust of their stakeholders. And, as we’ve learned from a recent spate of corporate missteps, organisations flout transparency regulations at their peril.
Lakshmi Woodings, Head of CSR at global financial services provider Apex Group, believes that to avoid greenwashing accusations, businesses must prioritise action over intention.
‘Challenges facing the global community such as food security, access to clean water, rising energy bills are all inextricably linked to sustainability. They have put a focus on how we can come together both as business and individual citizens to find solutions and mitigate these risks.
‘However, we’re seeing a lot of companies making pledges or signing charters but not making any concrete action plans to make a difference. It’s important to mandate change, rather than expressing an intention to improve, and to be transparent about where the business is currently and what you can do to make a difference.’
Leading through purpose
This is where leaders can make a tangible difference. By modelling their purpose and inspiring their workforce to step up to the climate challenge, forward-thinking leadership teams can quickly establish a culture of sustainability throughout their organisations.
Sheryl Moore is Head of Sustainability at Stone Group. Sheryl advises leaders to include sustainability as an agenda point for each meeting, to establish focus groups for sustainability initiatives and, where possible, to link sustainability initiatives to bonus/target structures.
‘Sustainability is critical for a resilient, responsible and purpose-driven business. It can’t be an add-on. It needs to be ingrained in the culture of the organisation, from mission statement to values, business descriptions to job descriptions.
‘Every business will be reviewing costs and minimising waste. By approaching every challenge and opportunity with a sustainable mindset, you can make a positive impact on your employees, your customers, the supply chain or the environment itself.’
It’s a sentiment echoed by Gary Lintott, COO at real estate platform Fu3e:
‘Leaders must prioritise sustainability within their organisations, leading by example and embedding sustainable practices into the company culture. Investing in employee education and training, encouraging innovation and creativity, and ensuring sustainability are key considerations in all decision-making processes.
‘Leaders should also effectively communicate the importance of sustainability to all stakeholders, including customers, investors and employees. Doing so can create a shared vision for a more sustainable future and inspire action towards that goal.’
Interestingly, established businesses may have much to learn from startups when it comes to implementing sustainable practices. Taavi Kotka is CEO and co-founder of Koos.io, a company that helps founders turn their communities into co-owners by offering a new form of ownership.
‘ESG has been the route for global giants to flex their eco and workforce credentials and an excuse for business consultancies to generate endless new reports and frameworks. But the most significant corporate secret is that, when it comes to ESG credentials, start-ups consistently steal a march on their rivals.
‘At least one-third of start-ups are thought to be purpose-led, having an intrinsic alignment with most ESG criteria, regardless of whether they choose to view or report on their business in this way. Even for start-ups that aren’t purpose-led, it’s far simpler to build positive practices into the company as it evolves than for large corporates to undo and rebuild.
Monitoring, measuring and driving progress
Naturally, organisations can only calculate the impact of the behaviours they track, and one of the biggest threats to consistent implementation is the lack of effective metrics.
To be useful, data should be transparent and readily available to stakeholders, allowing for accountability and continuous improvement. With accurate and reliable data, it is possible to know whether sustainability targets are being met or where improvements can be made.
However, there is a concern that mapping data against the complex matrices of rapidly evolving government policy may cause confusion – and inertia – in the short term.
James Butcher, CEO of Supply Pilot, works with clients like John Lewis and Asda to create more sustainable supply chains.
‘There is a very real danger that companies become too focused on reporting, rather than the positive change the policy is intended to influence. To maintain relevance in the current social and economic climate, companies need to shift their energies away from compliance and towards action.
‘There is also a risk that carbon has stolen the agenda from other ESG subjects, so it’s important that new frameworks such as the Corporate Sustainability Reporting Directive (CRSD) include all aspects of ‘S’ as well as the ‘E’, as well as specific legislation around biodiversity and deforestation – which also has a much greater impact in terms of the natural resources and biosphere on which all businesses depend.’
Normalising corporate sustainability
Thankfully, there are encouraging signs that businesses are beginning to take sustainability more seriously – even in traditionally resource-intensive industries.
Dr Clare Walsh is Director of Education at The Institute of Analytics (IoA).
‘Success stories are everywhere. The fashion retail sector has seen some companies like Baukjen voluntarily sign up to ESG reporting and oversight, using their transparent approach as a major marketing feature. It is part of their relationship with their customers to share guidance on the downstream impact of their work, sharing data on the carbon footprint of each product.’
In fact more companies than ever are looking to cement their commitment by seeking coveted B Corp status, committing to Fairtrade supply chain strategies or shopping in social enterprise marketplaces such as Social Supermarket.
To accelerate progress on environment, climate and social impact, however, it’s crucial that companies focus on replacing rhetoric with action.
Gary Lintott: ‘Improving sustainability credentials requires more than just good intentions. It demands a comprehensive strategy, data-driven decision-making, collaboration with other stakeholders, and strong leadership to drive change.
‘By investing in sustainability, companies can significantly impact the environment and create a more sustainable future. Leaders who prioritise sustainability and inspire change can not only improve the bottom line but also make a positive impact on society and the environment.’