Sustainability Is Here To Stay

How to Recognize Your Green Business Deficits and Solve Them Sustainability is here to stay as a central business issue, yet many corporations do not have the right resources or organization to comply with the new demands efficiently or, more importantly, to turn them to business advantage. I have found that companies not ready for this challenge typically show one or more of these five traits: Responsibility for sustainability issues is fragmented. Many organizations scatter responsibility for sustainability so thoroughly — in operations, legal, compliance, government affairs, corporate communications — that it only comes together at the CEO level (or, worse, in an ad hoc group set up by the CEO). No one at the top understands the potential for competitive advantage in sustainability. The company's leaders view sustainability as a set of technical compliance issues (for energy systems or smokestack scrubbers, for example) and delegate them to lower levels to execute. There is no sustainability tab in the business plan binder. There are no explicit processes making sustainability a business issue, leaving no one responsible for pursuing such a strategy. Sustainability, if it makes the business plan at all, is an add-on issue. There is a lack of green metrics to measure progress on building a sustainable business. The company doesn't have the means to measure sustainability and doesn't build green metrics into its business plan. Relationships with key NGOs are episodic (at best) and self-referential. Nonprofit groups such as WWF International and the Sierra Club are important, long-term voices in the ongoing green business discussion. Many corporations lack any kind of ongoing, substantive relationship with these nonprofit groups who can lend credibility to — or create problems for — a corporation's green business efforts. Episodic interactions aren't enough, nor are interactions based solely on what your company would like to see happen. Chances are if you nodded in recognition at one or more of these points, your business is not engaged in a serious sustainability effort. In such organizations, sustainability issues may arise unexpectedly, causing decision-makers to scramble in response. Sustainability should not be a crisis to manage. Here are four ways to address such deficits: 1. Elevate sustainability to a C-Suite post responsible for coordinating both capability and accountability. Laudably, many firms have created a chief sustainability officer. But they need to upgrade the role, and think carefully about who fills it. Sustainability is a business issue, not a compliance issue, so it is better to appoint an operations expert than to elevate an environmental health and safety compliance manager to the role. (Think of the difference between second generation CIOs, who are business people with aboveaverage knowledge of IT, and first generation CIOs, who were MIS managers.) This leader must assemble a team with expertise in legal, public relations, government affairs,

1

marketing, technical and operations issues. That team needs to work together on a regular, permanent basis. 2. Treat sustainability as you would a product or service. Incorporate the "triple bottom line" of pursuing economic, ecological and social returns for your enterprise. You want people to say, "We're producing an outcome and we're responsible for that outcome." Treating sustainability like a product makes reducing the enterprise's environmental footprint part of the regular operating plan. The is the output of this sustainability product? Measurable progress, both for the company and society. 3. Establish permanent, value-added partnerships with critical members of the sustainability community. This means treating each of these important organizations like a critical customer account. You have to identify those NGOs that have a say in your field. Then understand their needs and their goals. Foster relationships that enable you to communicate clearly about what you can and cannot do to help advance their agenda, and identify win-win solutions to problems where your different interests intersect. It takes a dedicated team, like having a special sales force devoted to an important client, to manage these important relationships. 4. Make green crisis management part of your ongoing commitment to sustainability. It is inevitable that there will be important, one-off issues and events. Sometimes it will be a crisis (for example, a product material turns out to be worse than thought for the environment), sometimes an opportunity (such as a particularly difficult site licensing effort). Your new C-level sustainability leader will need a devoted group to tackle unexpected crises, whether it's an industrial accident, new scientific data casting a harsh light on a business process, or a PR assault on your brand. The benefits of these steps are real. Wal-Mart has famously made sustainability a centerpiece of its business strategy, starting in 2004 when it partnered with Conservation International to assess the retail giant's environmental impact. Now Wal-Mart is a recognized leader for its efforts to reduce its energy use and decrease the use of packaging and materials throughout its supply chain of products. These efforts require investments akin to any meaningful operation. But as Miranda Anderson, Wal-Mart's sustainability director, noted at a recent Aspen Institute event: "What we have discovered is this whole sustainability thing, and looking at energy and climate, actually fits in perfectly with our company's core mission to save people money so they can live better. Every single thing we do is done through that lens. What sustainability has [done is] unlocked the true potential of linking up both saving money and living better." Bob Lurie is Director and Managing Partner of Monitor Group and leads the company's corporate sustainability practice. Monitor Group is a global strategy consulting firm and has a strategic partnership with Esty Environmental Partners to help clients build sustainability into their growth and competitiveness strategies

2