Sustainability needs to be a long-term part of your business strategy, otherwise it simply becomes unsustainable, says Robert Boute of Vlerick Business School
Sustainability. It’s a buzzword we all hear a lot, a term that’s maybe become overused. But commonly it is incorrectly used to describe non-encompassing, short-term “eco-friendly” projects that can greenwash a company’s objectives. True sustainability for businesses is much more complex than that. It is the long-term production of socio-economic and environmental value, that considers the wider impact of the entire supply-chain as a whole, including every stakeholder – from consumer to employee.
This should not be done at the detriment of the business. The evidence is clear: organisations that are sustainable, perform better. The hard part is knowing how to get there.
Focus on values
First up, you have to create a concrete foundation – a company philosophy that will guide your decision making and changes in this process. Think of this as the “Why?” in your mission statement: What changes do you want to make, and for what purpose
Keeping strong organisational values at the centre of your business is important in all aspects, but perhaps none more than sustainability. As mentioned, the most sustainable organisations (and the most successful ones) consider their business in its entirety – making sure your values are applied to your shareholders as much as they will be to your production, for example.
Having this makes decision making far easier; when you have set parameters, profit, development and purpose have much clearer boundaries from within which they can operate. Customers increasingly require sustainable values behind the products and services they engage with, and having them rooted within the foundation of your business is the key to long-term success.
What do you want your impact to the world to be? This is not to say you should be expected to immediately and fundamentally change everything, at the risk of your own operations. Sustainability covers so much that this is neither efficient, nor sustainable for that matter.
Prioritising areas of your business in which change can be made is your next step. Begin by outlining your key stakeholders – whether that be investors, customers or indeed your employees. Which ones have the largest impact on your operations, and how could they be changed or adapted to create long-term sustainable value?
Importantly, you must identify what aspects of sustainability you want to prioritise. Does your supply chain rely on increasingly insecure global shipping routes? Could it be made with more local or regional materials? Perhaps your customer base is narrow and reliant on one particular group – is there another target you could be going after? These key aspects of sustainability you identify should be of major interest to your key stakeholders, and should not mean that other issues are ignored; while they may not be a priority, they are still part of your plan for sustainable value creation.
Once you have prioritised in line with your sustainable organisational values, creating the strategy to reach your goals is now vital. We’ve covered the why and the what, but now it’s time to consider the how?
Define your journey
Create a roadmap that demonstrates and ensures your journey to a more sustainable business. This should include realistic targets, grounded in your values and priorities. Doing so not only keeps you going in the right direction, but prevents your business from getting lost in projects that were not identified as a priority, as well as allowing you to inspect your business more thoroughly. Consider the impacts of the targets you’ve set: what will they demand? What will they impact?
Absolutely vital here is that this strategy should not be seen as a “green strategy” or “sustainableplan” or “eco-friendly proposal” – this is a business strategy, and just like the values you have recognised, it is at the core of your company goals.
These targets are also important in allowing you to monitor your progress, or perhaps lack thereof. Like any business strategy, your plan of action and targets should be reassessed and reevaluated regularly, to not only ensure that you are on the right path, but also keep your business practices in line with your sustainability in goals.
Too often companies will spend the time and resources developing such a plan, only to revisit it a couple times a year, if that. Like any sales/recruitment targets or any KPI, your sustainability targets represent fundamental levels of success and must be treated as such. If you’re struggling to monitor targets, or indeed have problems identifying clear milestones, then perhaps you haven’t identified clear priorities yet? Or perhaps you have not entrenched these as your business strategy?
No doubt the process is endless – but it is certainly not thankless. Long-term sustainable value creation, spearheaded by purpose-driven leadership, creates a more successful business, with more awareness to the footprint it leaves behind on the environment, communities and the wider world.
There is a clear paradigm shift in what we suggest for businesses to truly embrace sustainability: a move from traditional growth centred on profit maximisation, to increasing the welfare of all stakeholders involved. The former is the easy job. The latter is the most rewarding.
ABOUT THE AUTHOR
Robert Boute is a Professorof Operations & Supply Chain Management at Vlerick Business School. His research focuses on digital operations, supply chain management and reshoring manufacturing, with a focus on sustainability.