Updated: Jul 15
I recently attended the LeadersSummit of the UN Global Compact, and one already well known but still impressive shared data was that 84% of their researched companies are taking some action related to sustainable development. Yet, only 39% of this same group are setting such actions into goals. Why is that? What does it take for a real commitment to showing up?
According to a Mckinsey's article from 2015 "Only one company in 12 includes sustainability criteria in calculating performance-based compensation for executives and only 1 in 7 rewards suppliers for good sustainability performance.". I am afraid that this has not improved much since then. What people perceive as the value of ESG performance into financial performance has changed. The overall conclusion that a positive correlation exists has, though, been validated in 2019 and 2020 pieces of research and interviews. More and more, this is reported as accurate. For example, 99% of the executives believe sustainability to be relevant to the success of their business according to the CEO Study on Sustainability by the United Nations Global Compact and Accenture in 2019.
I've examined at least 20 different studies and articles on the topic while preparing a project on a reward system for the Executive Committee of one medium-size company. The objective being to incorporate ESG KPIs into their bonus calculation. It is astonishing to me the resistance companies have to a formal commitment to sustainable development, especially when connecting their core activities, goals and remuneration. The book Don't Even Think About It: Why Our Brains Are Wired to Ignore Climate Change by George Marshal clarifies with great insights on the psychological and emotional denial around climate change. It showcases, therefore, the difficulties in embracing our responsibility in doing what it takes to revert it. Still, it feels bizarre to me; we are in such pragmatic denial.
Of course, as a business consultant and advisor, I am confronted by this reality almost every day. In my entrepreneurial journey, after leaving my long years in the corporate world behind (even though I am very proud of my time at Unilever) I have come to follow a list of attributes I consider important to any of us trying to make this world a better place. Below I present my humble list on how to be more effective at this job.
1. Be the change yourself. You have heard that before, of course. That does not make it any less real. If you want others to listen to you and to influence, so that positive impact is implemented or, to cut off the negatives being generated, you need to make your personal choices too. That is a firm commitment. I have no car for more than six years; I use public transportation as much as possible. I have bought three new pieces of clothes in the last three years, and 2 of them are second hand, one was to support a community in need. My husband and I are five days a week vegetarian, and we have been learning to cook new delicious dishes, something Covid-19 even helped around. Products we buy tend to be sustainable and recyclable. I carry my reusable bottle of water and shopping bag. I still have not found a good-enough solution for my air travelling, however. These are only a few simple examples from a much longer list, and each person needs to define their own way of going on about what they can do to hold a more sustainable living. The point here is that, even if your personal impact is ridiculously low (and believe me it is higher than you think) while compared to the impact of companies, if you want to see a change in the world you need to be it. If your line of work, like mine, is along with sustainable development, it is imperative you can show the example to customers, friends and family. Your reputation depends upon that unless you are in the "green-washing" business. And customers can smell inauthenticity from miles away.
2. Don't focus on your customer negative impacts. Focus on the positives. Yes, to be serious about being environmental and socially responsible, a company needs to know their impact and their footprint, as well as their externalities. To help a customer to put a baseline together is excellent, but it is not attractive. Nobody wants to face problems and issues at all times. No one likes to be told about their flaws. But we all want to know about our potential. Learn about our possibilities. Feel we are trusted as capable. That is an approach that works better and feels better. It is a mindset. And as such, requires training. The most effective communication I can have with customers is about opportunities. About the significant actions, they can take; about the improvements and opportunities at their reach. That is where I try to focus.
3. Never ignore the business case. Preferably, be the first one in the conversation to bring up the topics of results and return on investment. You do not need to wait to be questioned about it because you will be. Show your customer you are not an idealistic, instead consequential about your propositions. In my case, I try to make sure from the beginning that the business case is not my priority as their advisor, neither it will always be pretty nor easy, but that the company does need to make it a priority. And I will do all I can to put together the pieces and present an adequately thought through the business case on being sustainable and responsible. It helps I have worked 24 years in the corporate world. There was no project without a business case at Unilever, for instance. If you are not already skilful on creating the figures of your project, suggestion or idea, find a way to fill in the gap. I want to build a more inclusive economy and change the rules in place today, but I cannot ignore such rules, neither can you if you're going to make a difference. There are leaders, CEOs ad companies who wish to do the right thing because of their belief or because they genuinely want to leave a good legacy. Many of the medium-size companies are old enough to grasp at such concepts, but most cannot afford a loose end on the business case.
4. Tell stories! Yes, you have heard that one too. I am telling no secrets in this article, am I? But again, it is just worth saying that people are more in touch with a plan if they can personally identify with it. Nothing is more effective than storytelling. Only, in this case, I am not talking about fantasy tales. I am referring to benchmarking and successful examples that can inspire. There are sufficient cases out there of companies doing good, being successful while doing good and creating a pool of admiration and talents around them that makes them strong to face almost any market challenge. Leaders, CEOs, executives and companies long for praise and reputation. Help them to see and believe they can be admired by their good values as leaders, and they will do a greater job.
5. Be honest about what you do not know. Sometimes you are not the right one to help. Environmental and social change for good is a vast territory, and no one has all the answers. Sometimes, things get complex, and an expert or various are welcome. Other times you need to invite collaboration. And a few times you need to let go, referring to someone better qualified. There is no shame in that and, your customer may notice down the road you are not that good in something if you are not playing honestly. That would be only damaging to you. A long-term perspective and a generous mindset work better for us consultants in the sustainable business field. We are not Wall-street wolves, and it does not benefit us to think competitively among ourselves. That is a belief, and I see many who do not follow this practice. Still, I can only talk about what I feel right.
6. Celebrate every small action of your customer in the right direction. We tend to forget that, but the positive stimulus is the most powerful one. If you can help your customer to feel good about him or herself or the whole team or organisation to feel good about what they accomplished, do not waste time in making it so. Multiply the good feeling. Exaggerate even. The war on waste does not apply here.
My conclusion at this point is that we have what we need for making environmentally and socially responsible business happen. Technology is mostly available; knowledge is mostly accessible. Support services to make it through and further is at reach to most companies. Like myself, there are hundreds, even thousands of serious and qualified professionals, consultants and experts ready to help. And most of us desperately want to. The real transformation is slow, nevertheless. It requires patience or more appropriately said resilience. It requires us to overcome the fear of risking, of failing at times for a more significant success ahead. The attachment to past and traditional ways of profit above all seems at times capable of freezing even good, well-intended leaders who have the willingness to leave a greater legacy. Such leaders keep wasting precious time, keep finding excuses our hiding behind emergencies. We can help them to move into embracing restorative, regenerative and inclusive business models, more resilient organisations and modern approaches. I provided you with six steps to do so. They are a created possibility.
I leave you today with a last challenging idea, perhaps material for some next article. Sci-fi and dystopian movies and books get it what I just described here. They show us our future if our inaction continues. We see them as entertainment and pure fiction. We try not to think too hard about the fact a lot of what they present may come true because this is thinking negative. We can see them as a positive challenge for us to prove them wrong. One that brings us to find ways to inspire leaders and organisations with amazing stories of success, with the celebration of small victories, with positive thinking and opportunities focus. We can create a business case for today and for the future based upon doing good. And most importantly, we can start with ourselves, because that is what it takes to reach commitment.