As businesses face increasing pressure to address environmental and social challenges, the concept of sustainability is transforming from a buzzword to an essential license to operate. Companies that embrace sustainability not only contribute to a healthier planet and society but also position themselves as industry leaders, attracting conscious consumers and investors.
In this blog, we delve into the transformative power of company-wide sustainability action. We explore how organizations, regardless of their size or sector, can empower their workforce to drive positive change, and create a lasting impact on the world around them. We do so by discussing the following topics:
- i) The role of management
- ii) The importance of good communication
- iii) Organizational design
- iv) Value chain action
- v) The importance of reporting
- vi) The importance of challenging- and engaging your employees
- vii) A case example of Unilever
The role of management in forming a sustainability strategy
In order to have the whole organization aligned towards the same target, executives must live and breathe sustainability. They must be the movements’ biggest proponent to get everyone on board.
When leaders at the top of an organization embrace sustainability as a core value and strategic priority, it sets the tone for the entire workforce. By demonstrating a genuine commitment to sustainability through their words, actions, and resource allocation, leaders inspire and motivate employees at all levels to actively engage in sustainability initiatives.
Leadership commitment to sustainability can foster innovation and empowers employees to contribute their ideas and efforts towards achieving sustainability goals. Strong leadership commitment helps overcome resistance to change, establishes accountability, and reinforces the long-term vision of an organization, ensuring not only sustainability becoming ingrained in the company’s DNA, but for innovation as a whole.
Another important factor for management to consider is strategic integration, which is key to embedding sustainability throughout the fabric of an organization. Strategic integration aligns sustainability goals and objectives with the overall business strategy, ensuring that sustainability considerations are integrated into decision-making processes, resource allocation, and performance evaluation (e.g. bonus allocation).
This requires a comprehensive understanding of the environmental, social, and economic aspects of the business and industry. By incorporating sustainability into strategic planning, organizations can identify opportunities for innovation, risk mitigation, and competitive advantage and act upon these insights.
Integrating sustainability into core business functions such as supply chain management, product design, and operations enables companies to drive sustainable practices across the value chain and create shared value for all stakeholders. Strategic integration allows sustainability to become a catalyst for business growth, resilience, and long-term success.
Communication for sustainable organizations
Communication is key. Especially in the field of sustainability where knowledge is ever evolving, and a lot is still to be done.
As a company you can showcase the impact that your company is making, inspire others in the industry to make a positive change and thereby be a catalyst of positive impact. On the other side, positive climate impact can also be overstated in comparison to a company’s negative climate impact, which can be labeled as greenwashing.
What companies communicate is always changing and differs per company. We do however often see that companies use the same means of communication which can influence effectiveness. Trying out different channels or mixing channels can have a positive effect on how your message is received.
An obvious channel would be to dedicate a section on your website to sustainability or green practices. Don’t hide this section but make it one of the first things visitors see. Here are a couple more channels for you to consider.
A yearly Impact Report can be written to showcase the company's sustainability efforts and accomplishments (for inspiration: see ours). This report can be posted on the company's website and distributed to partners for wider visibility.
To increase internal accountability and promote progress, the company can highlight its accomplishments and challenges in its regular newsletters. Social media platforms such as LinkedIn, Twitter, and Instagram can be used to share information and updates related to sustainability.
Hosting a business event to share progress and environmental accomplishments can also be a great way to raise awareness and educate people about environmental issues. Additionally, public speaking and presentations can position the company as a sustainable leader and provide a platform to raise awareness and educate colleagues about sustainability and environmental issues.We have recently hosted a webinar; check it out for inspiration on how to give a sustainable-themed presentation.
Organizational design for sustainable companies
Organizational design for sustainable companies is a strategic approach that focuses on reshaping the fundamental structure, processes, and culture of businesses to embed sustainability at its core. Companies are realizing that integrating sustainability into their operations goes beyond mere compliance; it is a vital driver of long-term success and resilience.
But how do you form a structure, especially in larger organizations, to get green initiatives going? A McKinsey article proposes three models for different size teams to approach sustainability from an organizational point of view:
- Large central team with few business-unit resources. Here a larger central team owns most sustainability activities and conveys with individual business unit managers for advice. A large central team may be beneficial in orchestrating budget and overall sustainability performance. A disadvantage of this model might be that it is less equipped to spot sustainability-related market opportunities and risks that are specific to a business unit.
- Lean central team with decision rights and many business-unit-resources. Setting sustainability priorities and leading the company wide sustainability agenda is done by a central team. In this model, business units however have a mandate to setup their own initiatives if they help achieve company-wide targets. This model works best for companies that already have implemented sustainability in the organization culture, thereby increasing the potential of teams from various units working well together.
- Central team that deploys teams to business units. In this model, sustainability tasks are transferred to specific business units by a central team. The idea is that once a task is embedded in a business unit, the execution can be done by the unit itself, without the initial support from the central sustainability team. The advantage of this model is that ‘it facilitates the deployment of sustainability expertise and the sharing of best practices.
Organizations are reevaluating organizational structures to embed sustainability into their very DNA. Organizational design for sustainable companies is a strategic approach that goes beyond mere compliance and token gestures. It represents a paradigm shift, aligning every facet of the organization with the principles of sustainability. Former Unilever CEO Paul Polman in his book Net Positive states that Unilevers’ reorganization of company structure proved vital in reaching its sustainability targets. Reducing decentralization and complexity enabled faster market feedback and prevent miscommunications.
Value chain action
We sometimes see companies only looking at the sustainability of products from the moment it enters the company gates to when the product of service is being sold. A wider value chain view allows companies to consider and address the full range of impacts their operations have on the environment, communities, and society.
Taking responsibility for the environmental impacts of your whole value chain can contribute greatly to successful company sustainability action. By taking ownership of the entire value chain, companies become accountable for the social and environmental consequences of their products or services.
This accountability drives them to seek sustainable solutions and actively work to minimize negative impacts. Understanding the entire value chain also helps companies identify potential risks related to sourcing, production, distribution, and waste management.
Consumers and investors increasingly value companies that take comprehensive responsibility for their impacts. By demonstrating a commitment to value chain action, companies can enhance their brand image and reputation.
Sustainability target setting and reporting
Goals are the compass that guide our actions and especially in the field of sustainability. With much at stake and little time to spare, clear goals are needed to spark the transition. By actively participating in the goal-setting process, executives can demonstrate their commitment to sustainability and provide a clear direction for the organization.
Setting ambitious and measurable sustainability goals ensures that efforts are focused, aligned, and prioritized to drive meaningful impact. Additionally, goal setting enables executives to track progress, identify gaps, and make informed decisions to course-correct and improve sustainability performance.
There are ample frameworks available that make target setting a relatively easy process. A couple to consider are the United Nations Sustainable Development Goals (SDGs), Science-Based Targets (SBTs) or the Global Reporting Initiative (GRI). But setting targets without proper reporting has of course no meaning.
Transparent reporting of sustainability progress and outcomes enhances credibility and builds trust with customers, investors, employees, and suppliers. Executives' involvement in reporting demonstrates accountability, encourages continuous improvement, and showcases the organization's commitment.
Sustainability reporting only works if it provides transparent and accurate information about the organization's sustainability performance, goals, and challenges. Data and metrics should be reliable and supported by proper documentation and verification processes. Also, focus on reporting the most relevant sustainability issues that are material to the organization and its stakeholders.
Materiality assessments help identify the topics that have significant impacts on the organization's sustainability performance and stakeholders' decision-making. Effective sustainability reporting involves integrating sustainability efforts with the business strategy to show how they contribute to the company's long-term vision.
It requires engaging stakeholders to understand their perspectives and responding to their feedback. The reporting should cover a wide range of sustainability topics, be consistent to enable comparisons, and provide context to explain results and challenges.
Third-party verification enhances credibility, and offering insights into future sustainability plans demonstrates commitment to progress. To be accessible, reports should maintain a user-friendly format with data visualization and regular publication keeps stakeholders informed about ongoing sustainability efforts.
Make your reporting recurring and public, this creates accountability and can only help you in sticking to your goals.If you are still unsure where to start, the Regreener impact dashboard allows companies to set their own goals and targets, while also tracking their sustainable impact in a public sphere.
Challenge and engage your colleagues
The last takeaway sounds perhaps more obvious; create a fuss. Make sure you engage and challenge colleagues on sustainability. And beat the drums whilst doing it. Try and create a culture where everyone is on the same page, conscious of the road ahead. Here are a couple of ideas on how to achieve this:
- Start by clearly articulating the goal to your colleagues, ensuring they have a shared understanding of its importance and relevance to the organization. Clearly explain the benefits and potential impact of achieving the goal, inspiring them to align their efforts towards its realization.
- Give your road ahead or your goal a catchy name that invites to be used a lot. Having a widely known name that can be used for referral helps in the adoption.
- Try and make all colleagues owners of your sustainability goal. You could even set a company-wide sustainability bonus if targets are met.
- Involve colleagues in the goal-setting process and provide them with the opportunity to contribute their ideas and perspectives. Establish a culture where idea sharing is promoted, think for example of a (online) sustainability suggestion box. You can even think of awarding a price to the best idea per time period. This fosters a sense of ownership and purpose, as colleagues feel invested in the goal and are more likely to be motivated to work towards it.
- Ensure that colleagues have the necessary resources, tools, and support to work towards the goal effectively. Offer training, workshops, or mentoring programs if required. Address any barriers or challenges they may face and be available to provide guidance and assistance throughout the process.
- Acknowledge and celebrate milestones and achievements along the way. Recognize the efforts and contributions of colleagues, providing positive reinforcement and motivation to sustain their engagement towards the goal.
Learn from success, a Unilever case example
In order to make all the above more tangible, we are providing you with a case example of consumer goods multinational Unilever. Unilever's journey towards establishing a company-wide sustainability movement serves as an inspiring case example of how a global corporation can drive transformative change and make sustainability an integral part of its DNA.
The catalyst for this movement was the launch of Unilever's Sustainable Living Plan in 2010, a comprehensive and ambitious strategy that aimed to decouple the company's growth from its environmental footprint while enhancing its positive social impact.
To achieve this, Unilever adopted a multi-faceted approach, beginning with top-level leadership commitment. The CEO, Paul Polman, played a pivotal role in championing sustainability as a core business objective, making it clear that Unilever's success would be intrinsically tied to its ability to drive positive change in the world. This commitment from the top trickled down to the organization, instilling a shared sense of purpose among employees at all levels.
One of the key strategies Unilever employed was integrating sustainability into the heart of its operations via a company wide action plan. The Sustainable Living Plan set clear and measurable goals across three core areas: improving health and well-being, reducing environmental impact, and enhancing livelihoods. These goals were cascaded throughout the organization, with individual business units and teams taking ownership of specific targets aligned with the company's overall vision.
Unilever's sustainability movement also relied on collaborative partnerships with a wide range of stakeholders, including NGOs, governments, suppliers, and consumers. By forging alliances and engaging stakeholders at multiple levels, Unilever leveraged collective expertise, resources, and influence to tackle complex sustainability challenges on a global scale.
Unilever demonstrated transparency and accountability through regular reporting on its progress towards the Sustainable Living Plan goals. The company's commitment to open communication allowed stakeholders to track Unilever's performance, hold them accountable for their promises, and foster a culture of continuous improvement.
A crucial aspect of Unilever's success was embedding sustainability in product innovation and design. The company recognized that addressing sustainability challenges required rethinking traditional approaches. By developing sustainable product offerings and leveraging its extensive brand portfolio to promote sustainable lifestyles, Unilever not only met evolving consumer demands but also showcased the role businesses can play in shaping more sustainable consumption patterns.
Through these integrated efforts, Unilever has not only achieved remarkable progress on its sustainability goals but has also achieved positive business outcomes. The Sustainable Living Brands, which embody Unilever's commitment to sustainability, have outperformed the rest of the company's portfolio in terms of growth.
Unilever's journey towards a company-wide sustainability movement exemplifies how visionary leadership, strategic integration, stakeholder collaboration, and a commitment to innovation can drive transformative change in even the largest and most complex organizations. By embedding sustainability into every aspect of its operations, Unilever has not only transformed its business but has become a beacon of inspiration for companies around the world, proving that sustainability and profitability can go hand in hand.
Not sure where to start with reporting and how the carbon market works? Head over to our recent blog and check out the latest carbon market updates.
