Roadmap to sustainable development
I would argue that the end goal for sustainable development is for everyone in the world to be living sustainable lifestyles, but at the moment we are not paying enough attention to what those lifestyles would look like. So how would we be living in an ultra low carbon, one planet, poverty-free world where everyone had a positive sense of wellbeing? The over-riding focus in the SD world is climate change but there is an argument that we should share the climate change debate with how we live in a society where the economy works with nature rather than fights against it and how we can use and own much less ‘stuff’ than we have in previous generations.
This is where my thinking starts but along the way in my career I have developed a wider narrative which has evolved through my experience with business and NGOs and changing realities in the SD world.
The lightbulb moment
Very early on in my career I was working at UK DIY retailer, B&Q. Lucky enough to be employed by a company aware enough to do something about green issues, it occurred to me then that CSR, or SD, was not just about reducing B&Q’s own operational impacts, as laudatory that might be. It was the sheer volume of the range and number of products that had the most impact and which also represented the controversial issues such as the destruction of rainforests and peat habitats, the use of chemicals, working conditions in developing countries and child labour.
If products could talk
Over time, I evolved this thought into the ‘if products could talk’ theme, asking companies to look at their impacts through their products and whether, if the products could talk, what they would say. Would they be proud of how they are produced, sold and discarded after they are used? Or would they be embarrassed or be ashamed?
All products from a pint of beer to a garden bench, have a story to tell which goes back to the natural environment whether a forest, a field, a mine, inland waters or the sea. They have been produced or manufactured by someone either in cottage industries or in vast factories and the product story would say something about how the people who make these products are treated and how much they are paid. The story could answer questions about whether the manufacture of the product causes pollution and/or climate change, or whether it helps to alleviate poverty. The story continues through how the product is used and then discarded at the end of its life. Perhaps it is recycled to be part of a new product or perhaps it is dumped in landfill.
Products have an enormous potential to either help destroy our planet or to address pressing environmental and social challenges. The product centric approach to sustainable development provides inspiring stories about the practicality of challenging environmental and social issues. It helps to break down complex issues into easily digestible chunks. For example, it is easier to influence how products are made and used than tackling the destruction of our rainforests or rising ocean levels.
The danger of following the herd
In my opinion many companies still look for some easy bolt-on template like GRI, ie let’s do what the greenies expect of us so we can get on with running our business. This approach follows the standard practice of defining sustainable development or corporate responsibility strategies by the mantra of ‘environment, supply chain, staff, community’ etc. In the words of Craig Revel Horwood of Strictly Come Dancing fame, the result is ‘dull, dull, dull’ and more importantly, may not pick up on some of the real issues that impact the business. The bigger question would be: if every company in the world did GRI well, or had their own version of Marks & Spencer’s Plan A, would we have the one planet, low carbon, poverty-free and wellbeing world we need. Hmmm – no!
Templates are cul de sacs – following what is considered to be the standard practice may not necessary define the company concerned and certainly won’t express its personality and culture. Conversely it could mean that time is spent on solving problems that businesses don’t have, which just goes to show that meeting universal KPIs weakens the ‘if you can measure it, you can manage it’ mantra.
This point of view reinforces the value of the product centric approach.
Yeah, but what about a practical management system?
Okay. You are a global company, you get the point that an off-the-shelf GRI style template does not do the job. But what does? It’s very simple – identify the biggest issues from your product story.
The product story approach sounds all very worthy and engaging, but for many companies it might sound too vague, too woolly an approach to measure progress and for some, it’s too scary to think of the issues and problems that might come to light which initially appear too difficult to solve. We are not looking for low hanging fruit. We are looking for the biggest issues that need solving.
So the product story approach is just a start as a way of reassessing the implementation of a new SD strategy. The next phase is to honestly review the issues of the business from a risk and opportunity point of view. What would be on the list? The use of natural resources? Climate change? Working conditions? Human rights? In my experience the ‘issues list’ comes to about ten. In fact I’ve got a bit paranoiac about the number ten – it’s the number I’m most comfortable with!
Whatever the number, it’s got to be workable and therefore the top issues may not encompass absolutely everything but they are the ones most relevant to the business. This is the 80/20 perspective. Once the top issues have been defined, you will be dealing with 80% of the most relevant risks and opportunities, even if you are parking the less important 20% to one side.
How far do you go?
Once the issues have been agreed, a judgment has to be made about how ambitious the company wants to be. It could be the goal is just to obey the law, just scraping over the ‘acceptable’ barrier. But that could look like reluctance and it’s more difficult having to play catch up as social norms and regulations get tougher and more explicit. It could be that the ambition is to be in a position where the business feels comfortable that it is doing enough not to be embarrassed. Or, taking the high road of being the leader in the field could be the choice, using thought leadership and action on the ground as a toolset to provide a competitive edge. Or, the ultimate ambition – defining the one planet, low carbon, poverty-free, wellbeing solutions and applying them to the issues.
Global and local
Many companies I have worked with have a global spread, operating in countries with widely varying economies, cultures and society needs. It is impossible and wrong to develop a one size fits all global sustainable development strategy which might make head office feel smug but is totally unworkable and disengaging in half the opcos. On the other hand, it is understandable from the corporate viewpoint that today’s pressures on open and transparent communication means there is a need to protect reputation and adhere to legal restrictions leading to the enforcement of global policies and standards.
This conflict can be resolved. Operating companies expect the corporate headquarters to have an opinion on the global SD issues and to provide some direction and advice. They also expect a level of consistency which comes from setting minimum standards. These are likely to include fulfilling legislative requirements and meeting basic compliance in specific countries but the opcos would also expect that they would be given enough flexibility to respond to local issues and concerns. For example, having programmes to deal with HIV/Aids in South Africa would be relevant as would having water usage reduction and community water supply programmes in India. Human rights issues are more relevant in some markets than others.
The stairways
There will always be people who believe in ‘if you can’t measure, you can’t manage’. Personally I don’t believe that it is absolutely critical to measure every KPI and target although this will suit some corporate cultures.
The process that I have found to be the most useful is the stairways system. Once the issues have been defined, a stairway is described for each one. Level one may be basic compliance, level two may be understanding and being prepared for tomorrow’s risk, level three may be creating new business growth and level four could be being best in class. The initial response to the stairways may be for the operating companies to see the stairways as a competition, that they should all achieve level four for every single issue. But of course, as we’ve seen, each issue will have a different resonance in different markets and for several issues, it might be perfectly reasonable to achieve a level one or two, for example.
The stairways effectively work as a communication tool too. There can be two-way communication between the central office and the opcos and there can be communication between opcos as they learn best practice from each other or ways to beat barriers.
I developed the stairways concept for both Kingfisher and SABMiller initially as an internal system which allowed opcos to view their position on the top ten issues for the global company. Apart from having to meet the basic level, or having robust plans in place to meet the basic level, the opcos could decide which issues or principles were most relevant to them. The expectation of the global company and the appetite of the individual opcos, in most cases agreed – for example, working conditions in developing countries, water consumption in water stress regions and energy efficiency and waste management across the board. Understandably for many corporates, communicating the results of the stairways externally is initially approached with some reluctance but progressively, transparency is an accepted principle for top companies.
Engagement and communication
It goes without saying that buy-in of the whole process is the glue that holds it all together throughout the various steps. Key people across the business need to be involved, including most crucially, the Board. Opcos need to feel that their particular concerns and issues are taken into consideration and that they agree with the global and local balance.
The risks and potential bad news have to be discussed rather than pretending they don’t exist. It’s never all good news and businesses which frankly debate controversial or complex issues are usually welcomed by stakeholders. And of course, good news should be shouted from the rooftops as a source of pride both internally and externally.
Following these steps may be time consuming but if done robustly and with stakeholder involvement, in my experience they make a significant impact.