The Future Of Strategic Sustainable Culture
Where strategy, culture and sustainability blend together
Cultivating a Sustainable Culture for Lasting Success
We are entering a new era of possibilities – the sustainable revolution or rapid evolution! Just as the digital revolution reshaped industries, the shift toward a more sustainable economy holds equal transformative power. We understand that true progress goes beyond practices – it's about instilling a sustainability culture that permeates everything you do.
Why Embrace A Sustainability Culture?:
Optimized Performance: Sustainability isn't just a checkbox; it's a catalyst for innovation, efficiency, and resilience, driving lasting business success.
Engaged Stakeholders: A sustainability culture attracts loyal customers, motivated employees, and supportive stakeholders, strengthening your impact.
Positive Societal Impact: By embodying values of progress, you contribute to positive societal change and a better future.
Environmental Stewardship: Imbued in sustainability, you become an agent of change in preserving our planet for generations.
Our Approach:
Strategic Alignment: We align leadership with sustainability, guiding decisions for impactful change.
Empowered Teams: Equip your teams to champion sustainability, fostering pride and ownership.
Integrated Processes: We seamlessly weave sustainability into existing processes, enhancing efficiency.
Accountable Progress: Establish KPIs and reporting mechanisms for measurable, accountable sustainability.
Building Sustainability
A sustainability culture is highly company specific and should align with the company’s business, existing corporate culture, competitive strengths, aspirations, and purpose.
Senior leaders are essential for initiating a sustainability culture, as they need the right mindset, knowledge, capabilities, and behaviour. This behaviour can then be spread throughout the organization.
Building a sustainability culture involves understanding the "why" behind the company's focus on sustainability and fostering a sense of ownership across the organization.
To ensure success, leaders should focus on no more than two or three sustainability goals at a time, aiming to instil a sense of personal ownership among the workforce.
The organization leaders should lead the cultural change, and the senior sustainability executive can support as the chief dot connector. Human capital and communications functions also play crucial supporting roles.
The human capital function ensures the change fits the existing culture and is supported through training and incentives. Communications are vital for making sustainability goals understandable, memorable, and energizing.
It's important to emphasize that sustainability efforts are not a passing trend. Making a business case for sustainability and involving external stakeholders can help solidify its importance.
The case for building a sustainability culture involves both positive ROI (return on investment) and negative ROI (risk of inaction). Highlighting the negative consequences of not changing can motivate action alongside the positive benefits.
Companies should anticipate that their approach to integrating sustainability into their culture will evolve over time. Few companies have deeply embedded sustainability (13% according to a survey).
Companies should set expectations that governance and incentive programs may change as the organization progresses in its sustainability journey.
Beyond traditional training and compensation, companies should focus on "learning by doing" and internal recognition to motivate progress in sustainability.
Tools can be used to measure progress, impacting metrics like employee turnover and engagement. Success can also be measured by achieving substantive sustainability goals and advancing the workforce’s sustainability-related knowledge and capabilities.
The next step in building a sustainability culture is extending it beyond the company's boundaries to inspire customers, supply chain partners, and even competitors for a larger societal and environmental impact
The Conference Board Cultural Scan & Analysis
In 2022, The Conference Board, a US based research organization convened a working group of over 250 leaders from 160 organizations who met over the span of eight months to discuss, under the Chatham House Rule, (total confidentiality) the challenges and opportunities of embedding sustainability into an organization’s DNA so that everyone thinks and acts with sustainability in mind. The following section is based on their key findings and analysis.
Elements Of Sustainability Culture
The harmonious integration of these two principles – sustainability and culture – hinges on four fundamental pillars:
Shared Knowledge: Cultivating a collective understanding of how the company's operations intersect with sustainability. This involves disseminating information and insights across the organization about the impact of its business activities on various aspects of sustainability.
Unified Mindset: Fostering a common perspective that consistently integrates sustainability considerations into everyday decision-making processes. This entails instilling a mindset where sustainability is regarded as an integral aspect of business strategies and operational choices.
Adaptive Capabilities: Equipping the organization with the agility to embrace change and effectively execute the company's sustainability strategy. This involves developing the skills, resources, and structures necessary to respond adeptly to evolving sustainability challenges and opportunities.
Reinforcing Behaviour: Cultivating behaviours that align with the principles of a shared organizational purpose. This encompasses nurturing conduct from employees, teams, and leadership that strengthens the foundational tenets of the company's collective mission.
Building A Sustainable Culture
Furthermore, participants also highlight a range of additional characteristics integral to a sustainability culture. These attributes encompass an inclination towards embracing novel concepts, fostering collaborative endeavours, and maintaining a forward-looking orientation – all of which play a pivotal role in driving innovation. Indeed, an entity characterized by a sustainability culture not only embraces novel concepts but also explores innovative methods of conducting business. In this context, innovation thrives when coupled with qualities such as adaptability, flexibility, individual empowerment, and a capacity for thoughtful analysis.
As the adage attributed to Peter Drucker aptly captures, "Culture eats strategy for breakfast." This serves as a reminder that the prevailing organizational culture holds a considerable influence over strategic initiatives, underscoring the significance of aligning cultural values with sustainability-driven goals.
Why Does A Sustainable Culture Matter?
A sustainability culture matters for several reasons. Firstly, it helps to integrate sustainability into a company's business planning processes and the daily decisions made by employees. This integration can lead to increased operational efficiency, expanded markets, improved brand reputation, success in attracting top talent, and improved access to equity and debt markets. Additionally, a sustainability culture has a positive impact on society and the natural environment. Creating a sense of ownership among employees is crucial in building a sustainability culture. Studies have shown that when employees feel a sense of ownership over their jobs, it increases their engagement, happiness, and productivity. This ownership extends to ideas, teams, and products.
To create sustainability ownership, a three-phase model is suggested. In the incubate phase, the purpose and goals are defined and awareness is spread.
In the launch phase, sustainability is tied to business opportunities and the company's purpose, becoming part of the recruitment process, recognition, and compensation.
In the entrenchment phase, sustainability becomes second nature, and progress is communicated, the sustainability culture is enlivened, and ownership is expanded through collaboration with competitors on social and environmental goals. Building a sustainability culture goes beyond traditional change management efforts. It aims to make sustainability part of the company's character, enduring changes in corporate and government administrations. This requires leveraging sustainability steering committees and focusing on soft skills. The senior leadership play crucial roles in building a sustainability culture. Their commitment is key, but it should not be seen as a personal project. Leadership needs to make the business case for sustainability and enlist the support of external stakeholders, regulators, and key internal stakeholders. The senior team sets the tone for transparency, trust, inclusiveness, and openness to new ideas. Human capital and communications functions also play critical supporting roles in building a sustainability culture. Human capital ensures that the change aligns with the company's existing culture and is supported through training and incentives. Communications are vital in making sustainability goals understandable, memorable, and energizing. Organizations should expect the approach to integrate sustainability into their cultural DNA to evolve over time. It is important to measure progress using existing and new tools, such as employee turnover, engagement, achievement of sustainability goals, and the advancement of sustainability-related knowledge and capabilities. The next frontier in building a sustainability culture is extending it beyond the organization's "four walls" to inspire customers, supply chain partners, and even competitors to make a bigger societal and environmental impact.
Cultivating Sustainable Culture
Companies are currently at an early stage in integrating sustainability into their organizational culture. According to a chart presented below, only 13 percent of the 73 executives who participated in the inaugural session of the working group affirmed that sustainability has been deeply ingrained in their company's cultural DNA.
This outcome is understandable, given that many businesses are in the process of laying down the essential groundwork before fully focusing on cultural transformation. These prerequisites include:
Conducting a comprehensive strategic analysis to identify the specific areas of sustainability that the company should prioritize.
Evaluating how these sustainability areas intersect with the company's core business and operational processes.
Setting clear goals within these key areas and devising ways to provide incentives for achieving them.
Establishing effective governance structures at both the board and management levels to drive progress towards these sustainability goals.
Creating a compelling narrative that communicates the company's journey toward sustainability.
It's important to note that companies can simultaneously emphasize cultural transformation while working on broader sustainability initiatives.
Initiating a shift in culture can be challenging, as it involves reshaping deeply ingrained norms and values. Companies embarking on a sustainability journey must be attuned to their existing culture and deliberate in involving stakeholders to drive change. This should be done while simultaneously establishing the foundational elements of a sustainability culture: knowledge, mindset, capabilities, and behaviour.
Building a Sustainability Culture: A Focus on Business Case, Technical Knowledge, and Practical Examples
Building a sustainability culture is a unique journey for each company, necessitating a concentrated effort to bolster knowledge in three pivotal domains.
1. Business Case
Understanding the Strategic Imperative: It is vital for companies to ensure that their workforce comprehends the intricacies of the company's business model, overarching strategy, and the compelling rationale for operating in a more sustainable manner. This involves elucidating the risks associated with not embracing sustainability.
Embracing the Positive Aspects: Companies must also articulate the affirmative aspect of sustainability. A notable instance is Walmart's 2020 commitment to transform into a "regenerative company," centring its operations around nature and humanity. Similarly, DuPont invests across strategic pillars that align with business priorities, enhancing value and risk reduction. Corteva, the agricultural spin-off from DuPont, emphasizes sustainability as a pivotal element guiding strategic decisions and driving growth, value, and stakeholder engagement.
2. Technological Knowledge
Technical Proficiency: Equipping the organization with pertinent technical knowledge in various sustainability domains is equally crucial. From foundational comprehension of environmental science and climate change to the company's specific measures to curtail its carbon footprint, this technical acumen fuels the company's agility in executing its sustainability strategy.
Varied Expertise: The extent of technical proficiency varies across functions. It ranges from general literacy throughout the organization to in-depth expertise where necessary, with board and management levels demonstrating fluency.
Internal Capacity Building: Internal training plays a pivotal role in nurturing sustainability leaders within the organization. A notable trend is that 68 percent of sustainability leaders emerge from within the company. While a majority of them lack deep expertise, some firms establish internal centres of excellence for learning, such as Microsoft's Sustainability Learning Center, LinkedIn Learning.
3. Practical Implementation
Learning Through Application: Acknowledging the efficacy of experiential learning, organizations should remember that practical engagement is pivotal for effective upskilling. Since employees possess varying knowledge levels, competencies, and interests, tailored approaches are imperative.
Employee Retention and Upskilling: Sustainability training programs offer an additional advantage by enhancing employee retention. Research indicates that 65 percent of employees consider participation in upskilling programs as a significant factor when evaluating new job opportunities, while 61 percent deem it vital for remaining in their current roles.
Incorporating these three facets—business case comprehension, technical expertise, and practical application—profoundly cultivates a sustainability culture within an organization.
Embedding Sustainability
Embedding sustainability into a company's core values is an emerging challenge that requires proactive guidance from senior leadership and collaborative efforts across various departments. Many organizations are navigating uncharted territory as they seek effective ways to assess, quantify, and fortify advancements in cultivating a sustainability-focused culture.
This article, the third instalment of our comprehensive series on fostering a Sustainability Culture, delves into the pivotal indicators of performance (KPIs) and the array of strategies encompassing employee engagement, acknowledgment, and incentives. These strategies play a crucial role in reinforcing the trajectory toward a culture that embraces sustainability.
Foreseen Pathways:
Establishing a sustainable culture necessitates two foundational pillars. First, a collective understanding of how the company's operations intersect with sustainability must be nurtured. Second, the organizational capabilities to facilitate transformative change must be solidly in place.
Organizations are presently navigating the initial phases of gauging and quantifying the integration of sustainability into their cultural fabric. Initiatives are actively underway to equip employees with the knowledge and expertise required to weave sustainability into their functional and individual responsibilities.
The challenge of persistent staff turnover transcends financial implications; it also hampers the accumulation of essential insights required for shaping a sustainability-focused culture. To surmount this, the human resources and diversity, equity & inclusion departments play a pivotal role in setting cultural objectives and monitoring advancements.
While compensation holds its place, it alone cannot effectively nurture or celebrate progress. Internal commendation from senior leadership serves as a validation that employee contributions hold significance for the organization.
Effective communication of progress hinges on a blend of outreach, frequency, and community cultivation. This entails creating platforms and occasions for employees to exchange ideas and experiences
Beyond the Unspoken Norms: Unveiling Organizational Culture's Depth
Organizational culture encompasses more than a mere collection of customary practices. The ability to shape individuals' decisions, actions, and behaviours through a sustainability lens hinges upon cultivating a collective comprehension of how the company's operations align with sustainability. Simultaneously, it necessitates the capacity to drive transformative shifts. This process also entails instilling incentives and motivations that reinforce behaviours aligned with the company's sustainability objectives.
Within a Sustainability Culture Working Group, 54 percent of participants emphasized the pivotal role of behaviour as the cornerstone for fostering a sustainability culture. This emphasizes the significance of ensuring consistency in behaviour across all levels of the organization, from the upper echelons to the most basic roles, in alignment with the company's sustainability aspirations.
In parallel, 36 percent of participants highlighted the importance of knowledge. This pertains not only to a grasp of essential sustainability issues, but also to an understanding of how these issues intricately intersect with the company's unique business model. Additionally, 10 percent of participants underscored the role of capabilities as a key factor in shaping a sustainability culture. These three elements—behaviour, knowledge, and capabilities—are inextricably intertwined and collectively imperative.
To navigate the intricacies of this process, it's essential to transcend the surface and delve into our dedicated resource on the future of work. Here, you'll uncover how to holistically foster a culture that seamlessly integrates sustainability principles, ensuring that your organization thrives in its journey towards a more sustainable future.
Indicators of Progress: Turnover and Retention in Cultivating a Sustainability Culture
When evaluating the trajectory of their sustainability culture, organizations can find valuable insights in two key metrics: turnover and retention. These indicators offer multifaceted perspectives on the journey toward a culture steeped in sustainability principles.
Primarily, the persistent occurrence of high turnover can pose substantial challenges to advancing sustainability. Beyond its economic ramifications, elevated turnover hampers the accumulation of essential knowledge capital required for seamlessly embedding sustainability within the organization. A 2021 report from McKinsey highlighted that companies demonstrating robust sustainability practices tend to encounter less difficulty in recruiting staff compared to those with limited or absent sustainability policies. Collaboratively, the Human Resources (HR) and Diversity, Equity & Inclusion (DEI) functions not only facilitate data collection but also play a pivotal role in setting cultural benchmarks and monitoring progress.
Additionally, high turnover could signify that sustainability values have not been firmly rooted in the organization's culture. Numerous surveys emphasize the significance of a sense of purpose and meaningful work in reducing turnover. A 2022 talent retention study conducted by Benevity, a Canada-based purpose-driven B Corporation, revealed a 52 percent decrease in turnover among new employees participating in purpose-driven initiatives. Research from The Conference Board underscores that the younger generation, particularly Gen Z, seeks purpose at a task level, desiring a clear understanding of the meaning behind their responsibilities. Leaders and managers hold the responsibility of elucidating expectations, outlining organizational impact, and linking tasks to the company's sustainability ambitions.
The Human Capital function assumes three pivotal roles:
Strategically aligning sustainability with the company's existing and desired cultural traits, such as inclusivity, innovation, or high performance.
Crafting and executing initiatives dedicated to supporting the organization's sustainability goals, encompassing recruitment, training, and recognition programs for talent engaged in sustainability efforts.
Ensuring the holistic well-being of the workforce over the long term.
To foster a comprehensive understanding of their role in driving sustainability, organizations can engage in polling employees, probing their grasp of sustainability's connection to the company's mission and business model, and their perception of their influence on the organization's sustainability culture.
While surveys provide a valuable starting point, it's essential to note that they capture attitudes rather than behaviours. A more comprehensive picture emerges by examining employees' tangible contributions to building a sustainability culture, including participation in volunteering, charitable initiatives, employee resource groups, or sustainability education efforts. By assessing the impact of such involvement on employee satisfaction, retention, performance, and referrals, organizations can derive robust data.
Beyond Compensation: Recognizing and Fostering Progress Compensation, though important, should not stand alone as the primary method of reinforcing and rewarding progress. A survey of working group participants underscored that merely half (50 percent) viewed compensation as the foremost means of acknowledging progress. Strikingly, a majority (61 percent) pointed to internal recognition from senior management as the most potent approach, while 54 percent highlighted promotions and career advancement. This underscores the belief that employees seek to perceive their contributions as instrumental in attaining goals, with recognition from senior management serving as validation that their achievements significantly benefit the company.
