Please welcome Emily Zabanah, the creator of this month’s blog about setting sustainability goals for the new year.
The start of a new year offers an opportunity to consider the positive changes that can be made to change the way business is run. With growing external and internal demand, the development of long-term value for stakeholders through environmental stewardship and improved social development is an area that businesses are putting more focus towards.
However, with lack of strategy, a disconnect between sustainability and business, and misconceptions among management of best practices, comes failure in sustainability-based goals. A study by Bain & Company determines that this can lead to just 2% of companies achieving or exceeding the expectations that they set for their sustainability programs.
To overcome this, leaders must address misconceptions in their workforce that suggest that sustainability efforts have limited benefits for business. Additional time and management commitment can bring meaningful change that is worth investing into.
Ethics
The United Nations Sustainable Development Goals (SDGs) are representative of a global agenda for action by government, organisations, and individuals, with full implementation planned for 2030. The SDGs provide a shared blueprint for peace and prosperity for people and the planet, now and into the future. There are 17 goals and 169 targets outlined that look to address social, economic, and environmental priorities. The SDGs can be used as a guideline to align operations. This has a global impact as businesses play an integral part in meeting the 2030 target set by the UN.
Motivations for using the SDGs as operational guidelines vary among businesses. Many perceive SDGs as a framework which can be followed to integrate environmental and sustainable operations that will allow a business to gain a competitive advantage. Other businesses see the SDGs as an avoidance of risk, particularly related to reputation.
Internally, some business rationale see SDGs as a way to improve employee retention. Typically, high quality employees gravitate towards impact-driven purpose in their daily work, which can strengthen output and team foundation. One study found that morale was 55% higher in companies with strong sustainability programs and employee loyalty was improved by 38%. Additionally, strong corporate responsibility can reduce average turnover by 25-50%, reduce annual quit rate by approximately 3%, and save replacement costs up to 90%-200% of an employee’s annual salary.
Business
The standards for business are rapidly changing, with companies that are not actively shaping the new paradigm risking obsolescence. Setting bold goals and publicly supporting sustainable innovations build internal competitive advantage and set the bar for good performance. Additionally, many businesses that endorse this new paradigm will receive more support from partners such as NGOs, foundations, and the government in attaining their corporate goals.
Climate change and resource scarcity increase the risk of supply chain vulnerability. A report by McKinsey states that sustainability concerns put 70% of business earnings at stake. Additionally, out of 8,000 supplier companies, 72% state that climate change presents risks that impact operations, revenue, and expenditures. Therefore, managing risks requires businesses to make investments today to build long-term resilience strategies.
Stakeholders
The external demand arising from key stakeholders such as employees, customers, investors, and the local community is becoming a fundamental motivator in taking a visible leadership role in business. This form of building business reputation can lead to a stronger network, relevancy and heightened public brand image perception, leading to improved performance outcomes overall.
Nearly two-thirds of consumers feel responsible in purchasing products that are good for the environment and society, and perceive a higher level of product performance in products from sustainable companies. One study found that revenues from sustainable products and services grew at six times the rate of overall company revenues from 2010 to 2013 among 12 members of the S&P Global 100.
Foundation For Success
Making a public commitment contributes to a shared sense of mission, improving the engagement of employees and helping companies stay accountable for their actions. In addition, public commitments can be a prompt for open dialogues and stakeholder feedback on potential improvements.
Senior leadership support and action is another important factor when looking for success in sustainability efforts. The development of a sustainability committee can offer dedicated resources to catalyse change. This can also hold teams, departments and the company accountable to meet targets and improve the incorporation of sustainability at any level of operation.
In the same study completed by Bain & Company, 62% of respondents agreed that public reputation was the primary business rationale for sustainability programs, citing these initiatives as non-essential. Many believe that these programs can lead to an increase in cost and can undermine a company’s performance. These misconceptions can lead to sustainability efforts falling low on priority lists, and lead to lack of investment in resources. It is integral for business leaders to engage employees to understand the business case for sustainability by endorsing credible processes and relevant products.
Setting Goals Unique to Business
Credible sustainability goals are an integral part of contributing to the health of the environment and the community operated in. Stakeholders want to see businesses setting realistic and achievable plans . It is important to analyse and review progress towards goals to ensure a company is minimizing the impacts. Additionally, regularly providing updates on progress, whether good or bad creates transparency in reporting.
A credible goal includes one that can be assessed and has a clear time frame attached. In some instances, this can include setting short-term goals that gather data to help a business better understand their impact and if their time frame is being met. A useful resource to reference is the SMART goal system. This is the criteria developed to help improve the chances of succeeding in accomplishing a goal. This entails a goal that is specific, measurable, achievable, and relevant.
Businesses must outline their unique drivers and how their goals are linked to their individual issues and trends observed. This can be done by acknowledging a business’ reliance on certain resources through the goals set to protect and preserve them. Additionally, acknowledging the constraints associated with responsible consumption shows a dedication to long-term strategy and success.
Goals that acknowledge the joint efforts required to solve systemic issues can encourage others to become involved. To endorse collective action towards resilience, it is especially important to engage the community in which a business operates, the unique members of their value chain, partners, and policy makers.
Examples of Sustainability Goals
A few points of action for a business can include:
- Revising business sustainability goals
- Align actions with municipal and federal environmental targets
- Making a net-zero waste pledge
- Eliminating plastics and other pollutants
- Developing a sustainability committee / green team
- Encouraging employees to take up green commutes
- Finding new partners to collaborate with and share expertise
To support setting credible goals, Embedding Project maintains a public goals database containing leading sustainability goals and commitments set by large companies globally. This database currently includes over 700 goals, updated weekly, and can be searched by issue, company, sector, level of influence, and SDG target.
We know getting started in sustainability can feel overwhelming. That’s why we are here to guide and provide resources needed for success through our Sustainability Leadership Program. Connect with us today to discuss how we can be a support in developing credible strategies to leads businesses to achieving goals and long-term prosperity.
