The poster on my wall says “The future is not something we enter, it is something we create.” The emergence of sustainability as a strategic force in business is allowing organizations to do just that.
The birth of the environmental movement is generally traced back to the 1960’s, and over time, leading companies discovered that by better managing issues like resource use, waste and emissions, they could not only meet compliance obligations, they could also also reduce costs. Business cases began to support investment in environmental management initiatives.
The last decade has seen environmental management evolve into sustainability, and emerge as a business driver, particularly underpinned by the realization that we are, for the first time, impacting our planet in a manner that will seriously and permanently change the way we live on it. The biggest challenge of all, Climate Change has arrived.
The debate over climate change has moved on now. Although a few entrenched interests and conspiracy-theorists are squabbling over whether it’s real or not, the world’s leading corporations have recognized something is afoot, and have developed business strategies to position themselves for the alternative future that climate change implies. Examples are multiplying of how companies are evolving their business models to adapt to the new circumstances that climate change is likely to deliver:
- Total SA, one of the world’s largest fossil fuel companies, has just taken a controlling interest in SunPower Corp, one of the world’s largest solar companies, for $1.3B. Do you think they’ve spotted a trend?
- Nike are making football jerseys out of recycled plastic bottles;
- Capgemini is facilitating a pilot project now, where a number of companies are collaborating in a previously undreamt of manner, to reduce the carbon emissions associated with their logistical operations. Competitors have become partners.
What does all this mean for business? Why am I talking about it on an IT blog ?
The new landscape can present a bewildering range of risks, threats and opportunities for business strategists. What will my customers value tomorrow? How will I manufacture my products when water is more expensive than oil is today? Can I afford a logistical chain that stretches across the globe, and how can I monitor and manage it? How do I know my suppliers are supporting the values inherent in my brand?
The questions require the input from many professionals skilled in a range of disciplines. They are complex and require consideration of many possible alternative scenarios. And they have become very important questions, with the potential to seriously impact on the future of the organisation.
In no other business function are such critical questions, risks and opportunities managed without a System of Record, and yet in too many cases, the sustainability function is managed in just that way. Hundreds of spreadsheets, a variety of data standards, processes that depend on good intentions and best efforts, and a reporting result that is, at best, an approximation of reality.
Effective management of sustainability can only be achieved by adopting the same standards of data rigour, transparency and communication that we apply to other business-critical issues, and ensuring we are equipped to design our future, plan a strategy, and implement our plans with confidence and insight.
The good news is that there is an increasingly toolbox available for sustainability managers looking to implement their programs. Standards for management and reporting are becoming increasingly broadly accepted, a core accounting and reporting body of commonly accepted procedures is emerging. Practice is still patchy, but the framework is solidifying.
To understand the risks and opportunities represented by sustainability, and to guide the organization into an effective response, the sustainability capability must include the following elements:
- A clear strategy that illustrates how sustainability is expected to inform and guide the business model;
- A clear process for the collection, processing, analysis and reporting of data, to ensure the management has actionable insight into the issues and drivers that determine the organizations performance; and
- A sound technology base to ensure the process is efficient, auditable and reliable, and is able to manage the large and complex datasets that need to be processed;
- Sufficient budgetary and personnel resources to ensure data if effectively turned into reliable information and knowledge, and made available to support management programs.
Stakeholders demand cold hard auditable facts about sustainability performance, a clear strategy to manage its impacts and make a positive contribution to its community, and evidence that pragmatic plans are being implemented.
Organisations that put this capability in place will see payback in terms of improved compliance risk and better business efficiencies. Far more importantly however, they can have confidence that their sustainability strategy will be based on a clear view of their company, and they will have the credibility to help make their organization fit for the future. They will indeed, be able to create their own future.
Sustainability managers are faced with a mountain of data to collect, process, analyse and use to support action programs, it’s time they invested in some mountain climbing equipment!