Sustainability has often been treated as a nice-to-have, handled separately from normal business activities by sustainability teams working in silos with little access to leadership, the board, or other core functions of the business. Without this important access, teams had to ‘do’ sustainability around the edges of an organisation and would work around the business model to improve sustainability performance at a task level by activities such as reporting on office emissions, making the building more energy-efficient, or ordering new recycling bins. Sustainability teams had to be incredibly creative to influence change but without the right frameworks, access and tools, their impact was limited, and the overall sustainability performance of the organisation inched its way forward.
As the climate crisis has become more urgent with the frequency and severity of extreme weather events, sustainability has forced its way to the top of the agenda. The pressure on businesses to act now is coming from all angles with increasing force, whether that be through government legislation, climate risk, investor ESG-based pressure or societal license to operate. The temperature is rising both inside and outside the boardroom. It is clear action is needed now and that our old ways of thinking are no longer serve as a useful guide, so where do we go from here?
Over the last few years, we have become increasingly better at translating the science into practical action. Organisations such as the Science-based Targets Initiative have helped the cause of climate action. Science-based targets are measurable and therefore manageable, meaning that many organisations understand how much and how quickly they need to decarbonise to maintain a 1.5-degree world. However, the problem still persists on how have more impact and this is because:
Meeting the sustainability requirements of this decade can no longer be fixed by ‘tidying the edges’ but requires concerted businesses action. To be successful businesses must integrate sustainability into how they do business to facilitate the gear changes needed to win the race on climate change and sustainability. This is a transformation programme. Welcome to Sustainability 2.0.
Integrating sustainability across the business is a journey that all businesses will need to embark on to succeed. It will take time but, done successfully, it will create significant new value for a business, its stakeholders, and future generations. To that end, Avieco has created our Sustainable Business Framework which provides businesses with a blueprint on how to integrate sustainability across an organisation. It is underpinned by five strategic pillars:
Sustainability should be fully integrated into how the business perceives itself, the outcomes it achieves, how it leads and engages with its stakeholders – rather than as a standalone agenda item. This means that sustainability is at the heart of the company’s mission, vision, and values and that it creates sustainable and shared value for itself, its customers, its value chain partners and the communities it operates in.
To get this right there must be a minimum level of sustainability literacy on the board; the leadership team must get sustainability and what it means for their business, and it needs to be at the heart of an active, rigorous, an ongoing stakeholder management process. Of course, this does not mean that every business should be an “eco” brand but rather that every business understands the value of sustainability to them and society and uses its mission to maximise its benefits rather than causing harm.
Meet our client Christie’s who are on their personal journey to integrating sustainability into the very heart of their organisation. Christie’s established sustainability as a corporate strategic priority in 2021 with a new sustainability mission to provide ‘responsible culture’. It was launched with a personal announcement by the CEO, Guillaume Cerutti who connected the new mission to the Christie’s brand belief that the experience of art should always be positive and enriching, meaning it should never come at the expense of the environment.
To signal the importance of their new commitment and to give it potency, Christie’s pledged to “reduce carbon emissions by 50% across all emission scopes” by aligning their targets with a 1.5 pathway through the SBTi. Internally they established new governance that integrated sustainability into existing management structures to address their most material areas of their business – from packing and shipping artworks to how their buildings are powered. They published their first annual environmental report in 2021 to communicate their progress transparently and to hold themselves to account. For Christie’s, a sustainable outcome for the art sector is their higher aim, and so collaboration has been a strategic priority. Christie’s have joined the Gallery Climate Coalition and are currently working with partners and suppliers to improve packaging and shipping practices in the art world.
Businesses must move away from sustainability being managed in silos by actively integrating it across existing management structures. The more integrated sustainability is, the greater chance a business has at maximising its value. Sustainability goals and targets should be evidence-based, aligned with science, and on par with other business performance metrics. It will be fully embedded into the strategic positioning of the business and business decisions always take sustainability risks and opportunities into account, creating resilience for a rapidly changing and uncertain world. A smart business will also create a culture and organisation that promotes sustainability, inspiring employees across the business to contribute and promote sustainable working practices.
Croda have made huge advances in integrating sustainability into their strategic processes by understanding how it can create value for its stakeholders and customers and through its products and services, which they have translated into practical sustainable business objectives:
Integrating sustainability across the organisation requires a business to ensure that its market proposition, the products, and services it creates, are sustainable and create value to society. This means that sustainability is embedded into the operational planning of the business from capital expenditure decisions to brand positioning. The business uses sustainability to drive innovation to improve material use, processes, and employee performance, creating an improved market proposition. To be successful a business will work with its ecosystem of partners and customers to drive sustainability across the full life cycle of its products and services.
When it comes to environmental performance, we are starting to move beyond impact mitigation and towards positive impact creation. Consider the latest Net Zero, climate-positive commitments that are being made by the likes of Microsoft and Ikea. This impact must now also extend beyond a business operation but across the full life cycle of a business’s products and services, ensuring that they too create a benefit to customers and society rather than just limiting the harmful impacts. This requires active participation across the whole organisation from product design through to sourcing, but also extends into how suppliers and partners services impact the environment and its communities also.
A business’s social impact is about creating environments that protect a person’s rights and dignity and safeguarding them from harm. A sustainable business is a champion of human rights. These must be promoted in the workplace of the business, creating a safe, inclusive, and diverse environment but must also extend to protecting those in its supply chain and wider communities. A business must therefore take ownership of the social risk within its supply chain and work proactively with its suppliers to ensure good working practices are maintained. Extending beyond the supply chain, businesses should be implementing a set of coherent, long term programmes that have a positive tangible impact on the communities they operate in, starting with the aim of providing decent livelihoods.
Rathbones is committed to operating in a way that benefits society and actively addresses any adverse impacts their activities may have on society, people and the environment. Avieco worked with Rathbones to help them identify the risks of modern slavery within their supply chain and set a strategy to mitigate them. Through continuous engagement with its material suppliers, Rathbones focused on enhancing their due diligence approach and processes to mitigate modern slavery risk. In addition to their own due diligence processes, Rathbones has led an investor coalition, engaging with FTSE350 companies that had failed to meet the requirements of the Modern Slavery Act. The business was shorted for “Stewardship Project of the Year” and the PRI 2020 Awards.
Integrating sustainability into a business is a transformation journey that has the potential to create so much value to the business and society whilst meeting the growing demands of today. Businesses can work with Avieco to establish where its current sustainability performance places it on this journey and what it needs to do next using our Sustainable Business Framework. Start your journey today, call +44 (0) 207 048 0450.
more than a word.