Time’s up: why boards need to get strategic about sustainability

When I first started working with large companies to improve their sustainability performance some 25 years ago, they often talked about the ‘urgent need for action.’ Fast forward two and a half decades, and while some were true to their words and acted accordingly, others prevaricated.

Those that treated sustainability as a strategic issue have been rewarded for their willingness to follow the science with robust, agile, and resilient organisations. Those that did not are now swimming against a rising tide of stakeholder expectation, reputational risk, divestment, and forthcoming legislation. All businesses are having to learn how to navigate in the choppy, uncharted waters of increasing systemic complexity, as Brexit, the pandemic and the here and now consequences of a rapidly warming planet deliver supply chain, labour, and market shocks.

Step change

Over the years, I have been encouraged by the step-change in how sustainability is tackled within a large business. While it may, in some dusty corporate corners, still be a nice-to-do adjunct focused on charity days and recycling programmes for the office, most firms have consigned that model to the history books. Increasingly, we’re being asked by forward-thinking clients to help them connect and entwine their commercial and sustainability strategies and take a long-term view of both.

While this is positive, business needs to do much more – and at pace. As the latest IPCC report spelt out in grave detail, this really is a code red for humanity. Boards can no longer claim ignorance of the issues, nor can they afford to kick the can any further down the road. Those that try will gamble with their firm’s reputation – and their own – but even more importantly, they will be complicit in the unfolding of a predicable disaster.

The good news

The good news is that taking a robust, strategic approach to sustainability is more straightforward than people think. The practical first step is forgiveness. A history of inaction on sustainability is no excuse for further prevarication. An honest, ‘mea culpa’ can act as a great re-balancer when working together as a board and deciding on how best to chart the next steps on the road to improvement.

Boards need to have the courage to have difficult conversations about the nature of their businesses and their business models, and they need to challenge themselves to step up to the plate and take measurable action. There are no more free passes left for those who think a slick PR campaign, but no supporting evidence is enough. Those that try for such quick fixes risk more than just their firms’ reputations.

What to do now

In 25 years, I’ve not dealt with a single client who thought sustainability was a quick or easy win. Some arrive at our door already in good shape but wanting to challenge themselves to achieve more, while others turn up with a blank sheet of paper and the inevitable trepidation that accompanies the start of a long journey. As I’m often heard quoting, ‘So long as you show up with the right intention, the important thing is just starting.’

If you’re wondering where to begin, here are some ideas:

1. Jettison the idea that the work can start next year/next month/after you retire/following the next acquisition. Urgent means now.
2. Forgive the company/leadership/market/political system/yourself for any historical lack of action. Redemption comes by starting now. Today.
3. Measure your sustainability impacts as you would your financial impacts. The adage of, ‘you can’t manage what you can’t measure’ is correct.
4. Set Science Based Targets (SBTs) or chart a course towards them.
5. Hire experts. The days of adding sustainability to someone’s job description and hoping they’ll pick it up are long gone.
6. Make sustainability KPIs a standard item for board discussion.
7. Align your commercial & sustainability strategies but also your teams. Help the organisation understand that it isn’t an either-or question. This is about commercial success AND sustainability.
8. Add sustainability KPIs to personal objectives, score cards and bonus schemes and give them parity with commercial metrics. This will be the quickest way to engage your staff.
9. Communicate with integrity. Stakeholders expect action and delivery, not just distant targets, vague plans, and platitudes.
10. Welcome challenge and prepare for some difficult conversations – now, more than ever, business needs critical friends.

Company boards have long been seen as the stewards of the business. As we approach COP26 following another year of record-breaking climate impacts, from fires and floods to famines, and the confidence in political solutions wanes, it’s becoming ever clearer that boards have an even bigger role – that of stewards of humanity.

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