successful sustainability programsAccording to a new white paper from Pike Research, successful corporate sustainability programs share a common foundation and are supported by three key pillars: executive buy-in from the start, creation of an effective sustainability committee, and the establishment of clear and measurable sustainability goals.

by Aysu Katun, Green Economy Post

Companies of all sizes are feeling increased pressure from employees, customers, and the market to develop an effective corporate sustainability strategy and act in an environmentally responsible manner.  However, a company looking to implement a sustainability program for the first time faces a number of challenges:  determining priorities, setting goals, and measuring results, just to name a few.

According to a new white paper from Pike Researchsuccessful corporate sustainability programs  are supported by three pillars: executive buy-in from the start, creation of an effective sustainability committee, and the establishment of clear and measurable sustainability goals.

Executive Buy-in

The paper, “Developing a Sustainability Strategy”, states that businesses will find it difficult to make inroads into sustainability without buy-in from the various levels of its executive management. Executive support for sustainability initiatives will likely equate to resources to pursue activities related to environmental responsibility, and increased employee engagement as employees take their cues from management. Outside the company, executives frequently discuss sustainability in media interviews, and with trading partners and the investment community. Pointing out cost savings, brand impact, and customer demands are recommended to companies whose executives have reservations about environmental responsibility as ways to help convince them of the need to take action now.

Establishing a Sustainability Committee

Pike’s research shows that many companies with successful sustainability efforts have found it useful to establish a sustainability committee that is typically made up of high-level executives and managers from multiple divisions. This diversity of expertise and perspectives is necessary because sustainability affects so many different aspects of an organization. These committees take on the task of establishing the high-level sustainability focus areas or priorities and shaping the sustainability strategy.

Outlining Sustainability Goals & Execution

The paper suggests that once a company has established its sustainability priorities, it is important to identify specific activities that will be pursued and to tie these specific activities back to the high-level sustainability goals outlined by the company’s sustainability committee or team. It is equally important to integrate sustainability goals with core business values. In the article “Valuing corporate social responsibility: McKinsey Global Survey Results.” published in The McKinsey Quarterly, data suggests that the more tightly integrated a sustainability program is into a company’s core business values, the more likely it is to have an impact on company value. The company also needs to determine what projects are worth pursuing in the near term, and which projects can be tabled for the immediate future.

After a company has decided to move forward with a sustainability plan, one of the major considerations is determining what areas will comprise the core sustainability pillars. The paper outlines three approaches:

Triple bottom line: The triple bottom line is a process in which a company evaluates its success, decisions, and goals based on the impact on the environment, society, and the economics of the company.

3Rs (reduce, reuse, recycle): This strategy focuses on decreasing consumption of resources, energy, and materials in the manufacturing process, diverting material from landfills by reusing or remanufacturing items, and recycling material after its initial use.

Most Impactful: This approach involves tackling projects that have the most impact on the environment or the bottom line, or the activities that are the easiest to execute at the present time.

Once a sustainability plan is developed, and specific goals outlined, companies face the task of keeping the momentum going. Aside from recognizing that moving a company’s sustainability strategy forward is an ongoing process, a firm can take several steps to maximize sustainability efforts over the long term such as conducting constant evaluations, taking continuous measurements, keeping a pipeline of projects, looking for ways to have an impact outside of the company, learning from other companies, internal training and sharing information.

“The simple truth is that very few companies have truly effective sustainability programs, even those who have published impressive-looking corporate sustainability reports,” says managing director Clint Wheelock. A 2009 survey by Crowe Horwath LLP and the Center for Business Excellence at the Farmer School of Business at Miami University, supports Wheelock’s observation. Only 40% of executives rated their own corporate sustainability efforts as “excellent” or “very good.”

Wheelock adds, “Our research indicates that the most successful programs are formed from the inside out, encompassing product design and production, company operations, and sales and marketing.”

A.T. Kearney’s analysis on the link between sustainability and market performance also concurs with Pike Research’s results and concludes that what distinguishes “true” sustainability from “green washing” is:

  • Top-down support
  • Long-term planning that is at least five years to 10 years into the future
  • Strong corporate governance framework
  • Contributions from experts, anyone who can provide valuable insight, outside of the company
  • Sound risk management practices that identify potential corporate liabilities that are related to environmental factors
  • A history that proves its long-standing commitment

Pike Research’s paper examines best practices for planning and implementing a corporate sustainability program. It explores company motivations for establishing sustainability initiative, outlines steps for getting the program off the ground, describes key sustainability areas to consider, and profiles three companies – Research In Motion, Shaw Industries Group, and CA – who have successfully launched corporate sustainability initiatives. The paper is available for free download on Pike Research’s website.

© 2010, Aysu Katun. All rights reserved. Do not republish.

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Author: Aysu Katun (18 Articles)

Aysu Katun is an associate editor at the Green Economy Post. She received her MBA degree from The Ohio State University's Fisher College of Business, where she focused on sustainability, marketing and strategy. At Fisher, she was a leading member of Net Impact's OSU chapter, which won the Chapter of the Year Award in 2009 . Before beginning her MBA, Aysu worked at Hewlett Packard in Turkey. A passionate traveler, Aysu has been to 27 countries and worked in three. Due to her international experience, Aysu is able to bring a unique perspective to sustainability issues in business.

  • Charlie Banks

    One way organisations can submit their sustainability reports for grading is through the Global Reporting Initiative, this repoting framework sets out the principles and indicators that organizations can use to measure and report their economic, environmental, and social performance.

  • Rob Peddle

    The thing that is really missing from the risk management part of the mix is a real understanding of what is truly driving future risk. A lot of work is usually done using traditional risk identification and analysis, but very little on trying to understand what is happening on a day-by-day basis that is likely to create risk in the future – i.e. the behaviours being demonstrated by people across the organisation.

    A sensible assessment of behaviours can be fairly easily related back to the risk to the delivery of sustainability goals. With this information, it allows the placing of focused resource on the areas that are creating the highest real world risk, not those that become people’s pet projects. It also allows the effect of the key role of management to become much more visible in the way it really supports or detracts from the declared aims of the organisation.

    We have been working on such tools for a few years now and I would be happy to share what we have learnt with anyone who is interested.