Interviews with sustainability leaders suggest that their efforts will apply across all business models. [Malte Müeller / Off Set]
It was a pivotal year for corporate sustainability promises. Under pressure from consumers, investors and – quite frankly – the planet, more and more companies are committing to reduce their carbon emissions to zero by a specific date. Even some energy companies that have been among the world’s largest producers of fossil fuels, such as BP and Shell, have announced similar targets. But there is a lack of confidence here: many consumers don’t buy it.
Less than a third (32%) of customers see these corporate commitments as meaningful, according to a recent Salesforce survey of nearly 2,400 adults in the US and UK. Almost half (47%) said they viewed the promises as superficial. Against this skepticism, now comes the hard part: turning promises into action.
Becoming sustainable is not a simple act or even a single initiative. For many businesses, this will require a total transformation in the way they think and a major upheaval in the way they operate. Interviews with sustainability leaders in companies around the world suggest that their efforts will span across business models and depend on buy-in from employees at all levels.
“The first mindset change organizations need to make is recognize that this is not a siled program, not a philanthropy. This is the only credible growth strategy, ”said Anna Lungley, director of sustainability at Dentsu, the Japanese advertising giant. “It will require a change in behavior. Products will have to arrive on the market. It is a business transformation program. ”
The good news: Many businesses have become more nimble during the pandemic, most evident in the speed of digitization. The same trait can help a lot to become more durable.
“Companies are changing the way they do things at a rate never seen before,” said Ofer Ben-Dov, head of sustainability practices at Traction on Demand, the world’s largest consulting and application development company dedicated to Salesforce in North America. But Ben-Dov said many clients he works with don’t know where to start.
Key tips for sustainability
Place sustainable development under the CFO
A growing number of companies are appointing executive-level sustainability gurus to lead their efforts. But people in these roles can face inherent challenges. Their teams are often small and their success depends on the cooperation of other people across the company, most of whom do not report to them. Not only do they need to collect data from a range of internal sources, but they also need other departments to make the operational changes needed to reduce emissions.
That’s why, for starters, sustainability leaders say it’s critical that CEOs make their efforts a central part of company strategy.
Canva, an Australian visual communications platform that is one of the world’s fastest growing software as a service (SaaS) companies, is on track to become carbon neutral by the end of 2021 It is committed to becoming climate positive by 2023, which means they will save more emissions than they generate.
Jared Ingersoll, head of sustainability at Canva, said his ability to drive the changes behind this change – like Canva’s ongoing transition to 100% renewable energy sources – comes from the founders of the company: Cliff Obrecht , Melanie Perkins and Cameron Adams.
“One of the guiding elements that you often see in the documents here is our two-step plan: to build one of the world’s most valuable businesses and, most importantly, to do the most good,” Ingersoll said. “The founders sincerely and wholeheartedly believe that they want to do good things for humanity.”
Equally important is structuring sustainability efforts to link them to the financial success of the business. More and more sustainability leaders report directly to the CFO, while until recent years many were in marketing or communications. But even then, it cannot just be a management initiative.
Get employee buy-in
Susan Machtiger, managing director and brand specialist at Ogilvy Consulting, which advises major global brands on sustainability efforts, said a common mistake is to undervalue employee buy-in. She suggests measuring managers’ performance not only against financial goals, but also against sustainability goals, where applicable. She also suggests celebrating lower-level employees who share even small ideas that could cut emissions.
“Along every supply chain there are millions of employees who can see an opportunity to do something better,” Machtiger said. “If they’re rewarded and celebrated for it, they’re more likely to do it.”
Using climate initiatives to drive growth
For many companies, the primary financial rationale for sustainability efforts has been growing pressure from investors, consumers and, in some cases, regulators. But the most forward-thinking companies don’t just appease stakeholders. They are also using these sustainability initiatives to drive growth, especially among young consumers.
In the Salesforce Sustainability Survey, 60% of Millennials and Gen Z – ages 16 to 40 or so – said they were willing to spend more on products and services from companies struggling against climate change.
Some companies are strengthening the financial case for reducing emissions by demonstrating how it can reduce costs. Dentsu has pledged to cut emissions from flights by 65% by 2030, primarily by encouraging employees to travel less, which will also cut expenses.
Influencing consumer demand and lifestyle choices
This helps to choose a sustainability strategy with a clear link to the larger business objective. Lungley said too many companies are trying ad hoc measures that have some impact on the environment but no single link to the company’s mission. Take the example of a plastic toy manufacturer announcing the switch to paper bags.
“Organizations don’t usually fail on this journey because they lack passion,” Lungley said. “They fail because they don’t know where to focus. It is absolutely essential to truly understand the real value that you are creating in the company.”
It is absolutely essential to truly understand the real value that you are creating in the company.
Anna Lungley, Head of Sustainability at Dentsu
As an advertising conglomerate, Dentsu’s vision is directly linked to one of the main sustainability challenges facing the company: the need for change in lifestyles. Once they make greener products like electric cars and plant-based burgers, companies must then increase consumer demand. Part of Dentsu’s sustainability strategy is to help more customers do just that. For a sustainability leader, this is the simplest type of strategy to sell: one that will generate income.
Measure progress with the right technology
Even for companies that adopt the right mindset and operational changes and fully integrate sustainability into their business model, measuring their emissions remains a huge challenge.
Many report what are known as Scope 1 and 2 emissions – direct emissions from a company’s operations and indirect emissions from purchased energy like electricity and heat. But investors are increasingly asking for data on Scope 3 emissions. These are emissions that occur indirectly anywhere in a company’s value chain, such as a supplier’s emissions.
Ingersoll said he spent 90% of his time at Canva working on spreadsheets and models, and Scope 3 accounting is by far the most complicated. When the company opened a new office in Austin, Texas last year, Scope-3’s calculations required thinking about questions such as: where do employees typically order lunch? How to account for a sandwich shop that does not measure its own emissions?
“We’re trying to figure out how to work with these downstream service providers so that we can assess the impact of our engagement with them,” Ingersoll said.
Ben-Dov said technology will be a critical part of the solution. For example, his consulting firm recently helped Andersen Corporation, one of North America’s largest window and door manufacturers, implement Salesforce Sustainability Cloud, which makes it easier for businesses to track their carbon footprint. Andersen has been counting carbon manually for years – now the company will be able to do it in half the time than before.
“If you have to account for your sustainability, you have to monitor your performance, otherwise you won’t know if you are going in the right direction,” said Ben-Dov. “Doing this manually takes time, effort and knowledge. Technology can make the whole process more efficient. ”
This article appeared in Vantage Point, a Salesforce magazine
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