The sustainable corporate strategy is a mix of environmental and social as well as financial value. To establish a sustainable business model, companies need to engage in and explore a social and environmental domain that is relatively new and unfamiliar. This entails great risks as well as great opportunities and has dramatic implications for human capital recruitment and retention.
There are important implications in terms of organisational design and structure. Current corporate mindsets consider sustainability issues as peripheral or at best, as separate issues, and therefore there is a clear distinction between strategy and sustainability. This is an artificial and dangerous segregation.
Strategy in the age of sustainability will perhaps challenge the way we understand the role of the corporation in society, and may help reinforce or even accelerate the current social and environmental trends and expectations that we, as a society, place on organisations. Yet, to the extent that such pressures are effective in further pushing the same or other organisations towards fundamentally rethinking what their strategy is all about, and in doing so, addressing the world’s biggest social and environmental issues, then in the longer term challenging the current mindsets will almost certainly be beneficial.
The 5 key steps to a sustainable corporate strategy
Understand sustainability and recognize what it means to the company.
As a first step, it is important to define what sustainability means for every area in the company and to identify its benefits. This may span from investment decisions, developing new products or services to changing procurement practices, sustainability has an increasing central role in the decision.
Engage with stakeholders
Engage with the most influential groups, keeping close ties and constant dialogue. Through such engagement, employees will contribute to the ideas and viable plans e.g. how to reduce and help reach the companies, waste reduction targets.
Set goals and commitments
Once key environmental, social and economic issues have been identified, efforts must focus on risks and seizing opportunities around issues centered on sustainable practices.
Establish systems and processes
Once goals are established, specific systems and detailed processes need to guide implementation of each initiative.
Track progress, communicate actions and meet expectations
It is important to set a system that only defines each goal but defining key performance indicators to meet those goals will allow detecting areas for improvement and tracking progress.
The key elements of developing and implementing a robust corporate-level sustainable procurement strategy are:
• Vision and clear objectives – what are you aiming for? Which sustainability principles and standards are you putting in place for procurement?
• Leadership and governance – the strategy needs to be endorsed from the top, and governance processes to implement it need to be put in place. A shift in organisational culture may be required to change the emphasis from buying low cost items, to considering whole life economic, environmental and social factors.
• Communication – both internal and external communication will be key enablers for your sustainable procurement strategy
• Training – different departments will have different training needs. What type of training will be delivered, how frequently?
• Risk & opportunity identification and management – where are your biggest areas of spend? Where are your biggest risks and opportunities? Expenditure analysis and supply chain mapping are key tools to help strategically identify and manage the most
significant issues and opportunities for your business.
• Embedding sustainability into the procurement process – is a process in place to challenge purchase requests and the ―business need‖? Is adequate weighting given to sustainability in the sourcing strategy? Are appropriate and challenging sustainability
requirements embedded into specifications, tender questions and contracts?
• Embedding sustainability into supplier management processes – do you know how well your suppliers are performing in sustainability terms? What opportunities are there to improve?
• Supply chain engagement and collaboration – sustainable procurement involves a higher degree of engagement and collaboration between all parties in a supply chain.
This should take place pre-contract, and throughout delivery of the product or service. End of life/reuse/recycling companies should also be engaged.
• Measurement, reporting and continual improvement – have you got systems in place to monitor progress and continually improve?
As with any change management programme, companies will need to gain ―buy-in‖ from employees across the business, drive through implementation, and regularly evaluate and improve their approach.