2020 was the year of sustainability. As many, including my colleagues at Forbes, accurately predicted a year ago, we have seen an unprecedented shift towards sustainable business practices in 2020, these changes have come in several major transformational ways. The Covid-19 pandemic despite the numerous socioeconomic hurdles it has caused has further accelerated this trend. Over 70% of companies interviewed for a research project commissioned by the Carbon Trust, said environmental management and sustainability priorities are likely to become more important for them as a result of Covid-19. As we enter the new year, the only certainty is that green thinking is here to stay. As more and more companies align their business strategies with the United Nations Sustainable Development Goals by increasing disclosure of the climate and environmental impact of their businesses, it is worth considering the key principles they should stick to deliver tangible, concrete green results in the years to come.
A new report by the Institute for Sustainability Leadership of the University of Cambridge captures insights from leading companies highlighting the practices needed to integrate a sustainable purpose into organizations and outlines 10 core principles. Capturing learnings from leaders within four large multinational companies – DSM, Ingka Group (IKEA), Interface and Unilever – the focus of the principles is less on the why and what of the sustainability purpose debate and more about how to embed it across the business. The report suggests a business is unlikely to use all practices but will be able to select, combine and adapt a bespoke selection that best fits the organizational size, culture and context. From the key principles outlined in the report there are three that stand out:
Integrate Purpose Into Strategies
This principle brings the sustainability purpose alive by linking it to the delivery of commercial solutions that benefit other stakeholders, such as customers and investors.
For example, Sustainability Innovation sits at the core of the sustainability department at Ingka Group (IKEA) and is tasked with exploring the prospect of ‘a better life at home’, also IKEA’s slogan. Innovation projects are given a long-term perspective and enable leapfrogging within key areas of IKEA’s sustainability strategy. “Sustainability innovation takes a long-term perspective at Ingka Group by focusing on new business and new approaches that create a big impact,” says Pia Heidenmark Cook, Ingka Group Chief Sustainability Officer. As a result, the company has generated numerous game-changing ideas which have revolutionised the furniture retail industry.
One of the team’s latest ideas being trialled is the transformation of IKEA stores into circular hubs, Cook says the aim of this is to “engage customers and local communities in circularity through hosting workshops and increasing the second-hand market of IKEA products”.
Build The Capacity And Capability Of Employees
This principle focuses on establishing a new purpose and sustainability strategy which will create a need for new capabilities within the organization and can be used to decentralize decision-making, enabling a more agile culture. As such it is likely to require a new, more holistic mindset from both leaders and employees. “For us at DSM, purpose is not ‘just another program’ – it is integrated into everything we do and is supported by a range of concrete commitments, actions and targets across all functions and businesses,” says Jeff Turner, DSM VP Sustainability. “It builds on our long-established values and it has been fully embraced by our employees,” he adds. DSM’s purpose is now at the heart of their newly launched culture program, “it will help us deliver the future we aim for by strengthening the link between purpose and our day-to-day activities,” Turner explains.
Select And Build External Partnerships
The third key principle is outward-looking, focusing on sharing a clear purpose and ambition externally and attracting potential partners that can work together to solve shared challenges. This intent, to work with and shape the wider landscape and value chain, is often new for conventional businesses and requires new capabilities, such as understanding the company’s influence across the value chain and how to identify partners. “To deliver our Climate Take Back mission, we had to deepen our knowledge in climate and technology, so we identified organisations with that expertise and shared values and built partnerships with them,” explains Erin Meezan, Interface Vice President and Chief Sustainability Officer. As a result, the company launched the world’s first carbon-negative carpet tile. Strategic partnerships are also key for Unilever that help drive catalytic transformation. “Working with UNICEF, the Global Vaccine Alliance and Save the Children, Unilever’s Lifebuoy brand has helped over a billion people in more than 30 countries improve their hygiene habits through handwashing with soap says Rebecca Marmot, Unilever Chief Sustainability Officer.
As we enter a new year let’s hope that the painful lessons of 2020 propel the corporate world to strive for more sustainable practices with climate and environment at the top of their agenda.