Sustainability Equals Good Business

Sustainability Equals Good Business

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The custodians of corporate image are highly resourceful when it comes to building a reputation as a good citizen or a responsible company. Business has honed its ability to ‘talk the good talk’. But can business ‘walk the talk’?

Failing to deal with the more complex and less enticing notion of embedding sustainability within a business amounts to nothing more than a charade. Yet embedding sustainability is more than just a process of backing up a good image. It’s about:

  • Building systems and responses that support business interests in the long term;
  • Making the business more robust to shifts in the external environment and more resilient to unanticipated and sometimes unreasonable demands of diverse stakeholder interests; and
  • Developing a consistent response to issues of importance across the operations of the business.

The sustainability function forces the business to consider a range of issues that may affect its interface with societal stakeholders and, by extension, its own wellbeing. The perspective that this offers enhances the ability to anticipate change and to prepare accordingly.

Repeating good business benefits

This is no more than good business practice. But to reap the benefits of this foresight and proactive planning, the responsibility for action needs to be devolved to managers who are designated to make the decisions and implement the necessary actions and processes. Embedding sustainability requires driving a high-level sustainability strategy down into and across the business.

Sustainability relates to the whole business, pervading all business functions, from HR to production, and all levels of employment, from the CEO to the office assistant.

In the same way that every person employed has a role to play in supporting the profit motive of the business, so too should each employee support the business in its endeavour to act responsibly and sustainably.

The role of employees

Executive and senior management figures engage with strategy and policy matters surrounding sustainability and set the standard for appropriate (ethical and responsible) behaviour in their organisation.

Less senior employees are responsible for monitoring, regulating and improving their behaviour according to the organisational standards that have been set.

But no matter how significant or minor the role is, every individual is affected some way or other.

Anticompetitive behaviour, breaches of corporate governance or excessive risk taking is often perpetrated by just a few individuals within companies that employ thousands.

The cost of bad business

Yet the cost of bad and invariably unethical decisions can amount to billions. In certain cases, large and established businesses have not survived the ensuing scandal and financial fall-out.

These exceptional examples alone justify the need for a value system or way of doing business that is morally acceptable and widely adopted.

At a more mundane level, businesses are confronted with the way the business interfaces with staff, customers, suppliers and the like. So once the appropriate course of action is decided upon, all individuals affected by that decision should respond accordingly.

Getting started

Start by determining what sustainability means to the business. To achieve this, define the ‘material issues’ that are to be managed and reported on. ‘Material’ implies that the way the issue is managed has a significant impact on the business, now or in the future.

Issues that don’t or are unlikely to have any real impact on sustainability should be de-emphasised. All too often the readers of sustainability reports are confronted by a plethora of data that has not been structured or prioritised properly.

The good news is that businesses already address many sustainability issues, which more often than not are of material importance to the business. Training programmes, employment equity and HIV/Aids initiatives are frequently well established, particularly within large companies.

By undertaking an analysis of what is being done and where gaps exist, a better sense is obtained of where and how the sustainability journey should start.

The sensible approach is to focus the sustainability effort, at least initially, on divisions and business partners where influence and risk are greatest.

Companies with high-profile brands are vulnerable to being exposed by the poor practices of their partners, particularly when these partners are linked to the company brand.

It’s therefore in the interest of the business to ensure that partner practices conform to accepted standards.

From the top down

To address a range of issues affecting the entire organisation, direction from the company leadership is needed.

The ultimate responsibility for sustainability must therefore lie with executives who understand the costs versus benefits associated with committing the business to a programme of action.

The role of senior executives is to provide a clear vision and to prioritise what sustainability initiatives or issues are to be dealt with, at what level and over what period of time.

Effectively, senior executives must provide a mandate for each aspect of sustainability that is to be adopted by the company.

Every company should choose those issues that are most relevant to the business and well-entrenched communication methods to get the message across.

Ultimately, if the business shows itself to be aligned with the fast-growing interest in societal good, employees will feel better about working for a company where their personal values do not have to be left at the door as they enter the building for work each day.

Nick Rockey
Nick Rockey is managing director of Trialogue. This column is extracted and edited from Green II … why corporate leaders need to embrace sustainability to ensure future profitability, published by the South African Institute of Chartered Accountants (SAICA) and Juta.