How sustainable is your business strategy?Emma
“Business sustainability: Managing the ‘triple bottom line’. This is a process by which companies manage their financial, social and environmental risks, obligations and opportunities. These three impacts are sometimes referred to as profits, people and planet.” – Financial Times Lexicon
The notion of creating a sustainable business strategy features in varying degrees on the radar of every business. For some companies, it is part of a prominent culture or aim. For others, a sustainable business strategy is one of an arbitrary list of to-dos that is rarely consulted and less often implemented.
For those progressive companies who embrace the concept, sustainability shapes everything they do, including the way they communicate with the world. A report compiled by research company Verdantix looks at how various companies treat their corporate communications in relation to their efforts to creating a sustainable business.
According to the report, called ‘Rethinking sustainability: brand risks and opportunities’, sustainability communications are stuck “between a rock and a hard place”. Companies face new demands for enhanced sustainability communications; the business environment is putting increasing pressure on each company to communicate efforts to create a sustainable business strategy. We are also under pressure to communicate in a sustainable manner. But at the same time, with the global economic environment still constrained, companies are under pressure to do more with their budgets. Their rands need to stretch further than ever before. Each department needs to get more done with the same amount of money, but they need to do it more sustainably than they did previously – something which is generally acknowledged to take up more resources than the traditional way of achieving things. The budgets with which to achieve a sustainable business strategy are also running low or flat, notes the research. “Sustainability communications,” it notes, “are trapped in the green ghetto”.
The report divides the sustainable business communications of companies into five categories.
- Purists: This is the first and most sustainability-conscious group. For purists, sustainability is synonymous with the corporate brand. The purist company is an already-sustainable business. Companies such as Unilever, which was voted as the most sustainable company of 2013, fall into this category. Not only do these company embrace principles of sustainability, they aim to act as ‘beacons’ for the corporate world. “If we achieve our sustainability targets and no one else follows, we will have failed,” said Paul Polman, chief executive of Unilever.
- Explorers: For explorers, sustainability is integrated into the corporate brand. The brand of the company is many things, and its sustainable business strategy identifier is one of them. The company may not necessarily aim to “be” sustainable, but it is on its way to “becoming” such.
- Advocates: According to the report, this is where the bulk of companies sit. For advocates, sustainability is “managed in a silo”. It is possibly the most dangerous of spaces to fall into, as the business paints itself in a particular way, but does not effectively leverage the principles it espouses. The company sees itself as a spokesperson for sustainability and touts some of the principles of a sustainable business. But it keeps sustainability communications in a separately-managed, disconnected ‘silo’, and pushes related communications out to a limited audience: the so-called “green ghetto”. The challenge for such companies is to pull away from intermittent, isolated communications and to instead create an ethos that embodies a truly sustainable business strategy.
- Reactionists: For reactionist companies, sustainability is a crisis management activity. The company tends to “throw money at the problem” when a need for sustainability arises. If investor relations or share price calls for the effort, then the company will put in the commensurate amount, and no more.
- Nothingists: For these companies, sustainability is off the agenda entirely. The company has not contemplated what building a sustainable business strategy would entail, neither does it plan to. Companies such as these have not yet realised the impact that attention to the triple bottom line could have on the overall well-being of their operations.
The challenge for business owners and strategists is to honestly determine where you lie on this continuum. If the business is a purist, how can it remain that way? If the business is an advocate, how do they move sustainability out of its silo? If the company is a nothingist, why has it deemed sustainability unnecessary, and is this approach beneficial in the long term?
If your company is looking for pointers on how to become more sustainable, The Finance Team can provide assistance. We can help you determine where you lie on the sustainability continuum, and give you strategic guidance as to how to reach and maintain the level of sustainability you desire.