Sustainable Business Success: Avoid the Common Mistakes
Creating a sustainable and socially responsible business starts at the top, with the CEO and leadership team. The team is responsible for devising policies, tactics and strategies to meet company goals which until recently have been more focused on growth and profit than doing good. But to be a great company today, profit alone is no longer enough. Executives must create a company that is purpose-driven and sustainable, a company that is both more environmentally and socially responsible. A company that balances profit and purpose.
However, achieving sustainability can be very complex, especially for executives who have not focused in these areas in the past. Although sustainability may not seem like a priority for many company agendas, ignoring it can be detrimental to a company’s future. When addressing sustainability, minding only the major tangible environmental risks isn’t enough. The “softer” risks of poor employee engagement and morale, lower customer satisfaction and a negative brand image and reputation have to be considered.
Here are seven common mistakes executives make in planning and executing a sustainability strategy.
Mistake #1: Missing The Relevancy Of Sustainability to Your Business
“Not everyone knows how relevant sustainability can be in a business because it’s such a broad concept,” says Matt Hare, Vice President of Environmental, Health and Safety at Hit Promotional Products. “Many people assume that being sustainable equates to going ‘green.’ However, sustainability also involves things like social and economic impacts on the business. Therefore, you have to look at it in many ways, not just one. About 75% of job seekers want to know how sustainable a company is, before accepting an offer from that company.”
In other words, sustainability is relevant to many aspects of your business. It can impact hiring and employee morale. It can impact your brand and sales. It can even make your company more efficient. Executives need to consider all aspects of being more environmentally friendly and socially responsible.
Mistake #2: Ignoring Sustainability Risks
Risks are unavoidable in a business. New macro trends emerge, consumer behavior evolves and different parts of your business change. All of these changes introduce new risk. Today, not being a sustainable business also brings new risks and executives can not assume other people in their organizations are managing them. Executives need to think about sustainability strategically and drive the appropriate action from their employees. A lack of action can not only impact the environment, but also critical intangibles such as:
- Good will towards others
- Wellbeing of employees
- Wellbeing of local communities
With employees caring more about who they work for and customers expecting more from who they buy from, new sustainability risks can be extremely detrimental to the long-term success of your business. All the risks below have to be considered and managed effectively:
- Environmental regulation violations
- Human rights violations
- Unethical business practices
- Making products that are not environmentally friendly or socially acceptable
Mistake #3: Not Being Transparent
Investors and customers want transparency 100% of the time that they’re doing business with a company. Therefore, it’s important to be transparent about your sustainability initiatives and accomplishments. Don’t ever assume that no one would want to read a sustainability report because it might be deemed “superficial” or “uninteresting.” These reports should be accessible to your stakeholders and present consistent and reliable data that is also easy to understand. When generating the report, include any risks and make that known to investors.
Trusted 3rd party organizations like Green Business Bureau provide a sustainable business certification that includes a public scorecard and list of completed initiatives on a public green business profile webpage hosted by them.
Mistake #4: Not Taking Sustainability Issues Seriously Enough
When something goes wrong, it’s in your best interest to have it resolved right away. It’s executive common sense and it applies to sustainability as well. However, if you try to fix the problem yourself without the proper knowledge or guidance, then you could be doing more harm than good. Therefore, don’t be afraid to ask for help from sustainability consultants and experts whenever there’s a problem that you can’t solve on your own.
Mistake #5: Not Finding the Right Person to Lead Sustainable Business Initiatives
Sustainability has become strategic and covers a very broad and complex set of issues. Companies need to seek out experts for help. But hiring the first sustainability consultant that you see isn’t always a good thing to do. No two sustainability experts or consultants are alike. So, if you hire a waste specialist to oversee ways to improve your company’s electricity use, then that could present unhelpful or inaccurate guidance and would be a waste of time and money. Therefore, you’ll need to find a consultant that best fits your company’s specific needs and focus areas.
In some cases, you may have current employees or managers that are passionate about sustainability and eager to help. Someone with some background in sustainability or experience in managing employee engagement programs may actually be a better and less expensive solution than hiring a consultant. You might even consider having your internal employee-led team use an online solution like the Green Business Bureau EcoPlanner which provides a library of over 400 green initiatives for building your own unique sustainability plan.
Mistake #6: Lack of a Formal Sustainability Program and Framework
If your company is working toward becoming a more sustainable business, then you need a strategy, plan and roadmap. The journey starts with organizing an official program managed by the head of your sustainability department or an employee willing to be the part-time head of a sustainability team. Successful sustainability programs rely on a formal framework for setting priorities and goals, tracking progress and measuring results. Such formality also allows you to establish a clear company purpose and mission statement, build a sustainability conscious work culture and engage employees. Luckily, there are sustainability management software solutions available to help you manage your program.
Mistake #7: Lack of Employee Engagement Or Buy-in
“Educating your staff on the value of sustainability and creating buy-in are effective in reducing sustainability risks, existing or potential,” says Gabriel Trembly, CEO of Delve. “It’s important to talk about sustainability with your staff; or else they won’t be on board with something that they’re not aware of yet. And even though one or a few staff personnel may argue that sustainability isn’t important in their job, it is – but they won’t know that, unless you tell them so. You have to tell your staff so that they’ll be on board with it.”
Conclusion: Sustainable Business Success Requires Executive Action
When it comes to social and environmental business risk, executives need to consider sustainability in all aspects of the company. It simply cannot be swept under the rug. Further, executives themselves must make a conscious effort to lead sustainability action and be a role model for fellow staff and stakeholders. Amidst society’s greatest challenges and companies being held to a higher standard than ever before, a sustainability mission, strategy and program are must-haves for long-term business success. At the end of the day, sustainability not only moves your company forward to a more efficient and secure future, it enables you to be a great company that protects the people you serve and the planet you rely on.