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The “Pain” of Sustainability

January 18, 2012

Sustainability is not new. In fact, I argue that the roots of this emerging field extend back to the 1990s when Kathie Lee Gifford and Nike made headlines. The field is starting to be seen as a business driver in addition to being the “right thing to do.” Now, it is becoming an expectation of companies. For example, in our recent public opinion poll, over 83% of American consumers think companies should try to accomplish their business goals while trying to improve society and the environment. Despite this progress, sustainability is an industry with problems that hinder its ultimate inclusion into business plans and the “corporate DNA.” What are these problems? Here’s a short list:

  • Companies are overwhelmed. Investors, consumers, academics, non-governmental organizations (NGOs), reporters, and employees all have a perspective of what a company should and should not be doing. A company can be returning a profit to shareholders, only to find protestors at their door or lawsuits filed. Retroactively managing these issues can drain resources, damage corporate reputations, and tire executives and employees.
  • Sustainability is overwhelming. The Global Reporting Initiative (GRI) is a multi-stakeholder, multi-national organization that sets the standard guidelines for what and how companies can and should publicly report. Despite being a tremendous tool, the Guidelines themselves do not offer solid guidance on prioritization. There are over 80 “core” indicators the GRI suggests companies should report. How can one company, no matter how large, effectively manage 80+ issues? Granted, many of the core indicators are “easy” (e.g. a letter from the CEO) but the key to being strategic is making choices in what you do and don’t do in sustainability.
  • Companies routinely fail to tell their story effectively externally and internally. Companies struggle with how to inform employees, shareholders and stakeholders about how the company is managing material social and environmental issues. This has increasingly become so due to the increasing popularity of social media. Frankly, some companies overstate their impact. Other companies, out of fear of being attacked, understate their impact or wind up not communicating at all.
  • Some executives don’t “get it.” There is a perception in some of the Chief-Suites (corporate speak for the section of an office building where all the executives with “chief in their title have their offices) that sustainability is a marginal issue. They tend to look at sustainability as purely focused on philanthropy and volunteerism. It’s a rare executive that views these activities as core to the company’s business performance. Thankfully this is becoming less common, but it’s still a major barrier for most sustainability initiatives.
  • Sustainability executives are often marginalized internally. Subsequent to some executives not “getting it,” sustainability executives in some companies are often “put in a corner” and given the resources that go along with being marginalized.
  • Companies are tempted to “greenwash.” Environmental issues are becoming increasingly important for society and for business. Recognizing that certain consumer segments respond well to environmental issues and eco-friendly products, some companies have stretched the truth. Occasionally environmental claims can run afoul of Section 5 of the FTC Act which bans unfair and deceptive marketing claims. The FTC enforces this regularly and has issued “Green Guides” since 1992 to assist marketers in staying on the right side of the law.
  • Sometimes you can’t win. People are tough to please. Often stakeholders, particularly external stakeholders, have different expectations of what companies can and should do in sustainability. Sometimes these expectations are valid concerns and sometimes they’re overblown. If stakeholders are advocating for a company to change the world overnight, it can actually slow down the adoption of sustainability because the far-flung expectations can seem too extreme.
  • Profit makes some people uncomfortable. I’ve realized that some non-corporate advocates for sustainability are ultimately uncomfortable with the idea that companies exist to make profits. This might sound to blunt, but why else do companies exist? Rather, I argue, it’s the manner in which companies pursue such a profit that is becoming increasingly important. Still, sustainability professionals have to battle this perspective.

What do you think? Are there are structural problems facing the industry? What other hurdles must sustainability overcome in order to become a part of how most companies operate?

9 Comments leave one →
  1. January 18, 2012 7:37 pm

    People mus accept that as we move to rescale, downscale, resize, and downsize everything we do in America that means for some people, in particular the baby boomers, a reduction in the standard of living and a “reduction of freedoms” ie. no longer being able to drive across country without thinking about the cost. Instead we should be talking about how the standard of living will and should change and what that can look like, not a reduction in the standard of living but a change of standard of living where our values systems shift. In regards to sustainability and business the balancing act focuses around managing expectations. Expectations of what is doable and how to move steadily in that direction without losing focus and motivation

    • January 24, 2012 4:52 pm

      Benedict, thanks for the comment, I appreciate it. I agree, so much about the opportunity of sustainability/CSR/CR/citizenship should be about creating such “shared value” as Professors Porter and Kramer put it. Thanks!

  2. January 20, 2012 3:03 pm

    Companies assign the responsitibiity of implementing sustainability to a small group of employees, sometimes just one, who in many cases don’t even know what is meant by sustainability. In addition to possibly having an uninformed person trying to accomplish a very important activity, it cannot be done unless everyone is working together. This means that people throughout the company in all departments should understand sustainability and work together to achieve the company’s goal — assuming it has one. Corporate training in sustainability is a precurser to achieving a sustainable company.

    • January 24, 2012 4:53 pm

      George, I totally agree. In order for sustainability to be a success, everyone should be aware of how their decisions influence the ability of a company to meet business, social, and environmental needs (all of which are linked).

  3. January 20, 2012 5:03 pm

    My sense is that we’re asking the business sector to make a ton of changes without first leveling the playing field. Our economy is unsustainable (infinite growth on a finite planet is impossible), but we (society/the public) haven’t demanded a new corporate charter that legislates the internalization of social and environmental costs before shareholders take their profit. This one “simple” (ha!) shift will make sustainability executives and coordinators the most important people in the business!

    In the meantime, as I’m learning from a wonderful course in Sustainability Planning through the International Society for Sustainability Professionals, companies and other organizations can move through a very methodical process for figuring out their own best strategies and steps for becoming more sustainable … on their way to becoming completely sustainable (in a zero-carbon that we haven’t created yet). This methodology sidesteps many of the barriers you spoke of, James. (Because I have no stake in it, I’ll mention our instructor’s book, which I’m finding to be clear, concise, useful and forthright: The Step-by-Step Guide to Sustainability Planning: How to Create and Implement Sustainability Plans in Any Business or Organization, by Darcy Hitchcock and Marsha Willard.)

    BTW, I agree with commentator Benedict that we don’t have to see these changes as a reduction in standard of living, but in an improvement in our quality of life. After all, a perpetual energy-based economy will be safer, cleaner, healthier, more equitable and more peaceful. I keep wondering why we’re not clamouring to get to there!

    • January 24, 2012 4:55 pm

      Thanks GreenHearted! I agree, if sustainability is done right as a strategic approach to business, it can sidestep many of the issues I mentioned. Thanks for the comment and the link to the book, look forward to reading it!

  4. David Schatsky permalink
    January 22, 2012 1:58 pm

    You have described real problems that some companies face when confronting the challenges and opportunities of sustainability. But there are also plenty of companies that have excellent sustainability strategies and sound management practices and resources dedicated to executing those strategies. Lots of companies are regularly reporting impressive gains in all kinds of sustainability metrics, ranging from greenhouse gas emissions, energy efficiency, water efficiency, waste diversion, etc.

    It is a challenge for any company to integrate a new set of strategic considerations into its approach to doing business. But that doesn’t mean it’s not happening. It just needs to happen more, more broadly, and faster.

    Sustainability, by the way, ought not to be termed as an “industry.” Done right, it influences nearly ever facet of doing business, no matter what industry a business is in.

    • January 24, 2012 5:00 pm

      Hi David, I actually think we are in agreement. My post was purposely meant to be a broad-brushed, concise list of many of the problems that are preventing sustainability from becoming mainstream. There are so many heroes of sustainability, big and small companies, but I just didn’t have the room to mention it! Still, unfortunately, I might argue that these companies that TRULY “get it” are the exception rather than the rule. Once it becomes more of the norm of business operations for most companies, then I would feel comfortable not referring to sustainability as an “industry.” You have a very valid point that if it’s done right, it’s more about how you do business, not a project in a business. Unfortunately, I just think we’re not there yet. Instead, sustainability is left to a number of practitioners (corporate side, and NGO side), strategy consultants (yours truly), report writers (too many to mention), and trade associations/NGOs (e.g. BSR). The biggest compliment to our collective work? That we all have to find a new job. 🙂

  5. Susan permalink
    April 21, 2012 5:58 pm

    Hi James, This is a great overview of some of the “pains” of sustainability. I definitely agree with you about sustainability (reporting) being overwhelming and companies feeling overwhelmed. If large corporations with the human resources to track and report as many as 80 core indicators find the whole process overwhelming, imagine how it must feel for microbusiness owners who genuinely do care about being sustainable (or specifically started their business to help make the world a more sustainable place to live) but most certainly don’t have the resources to track 10 let alone 80 indicators!

    I’m currently working on a book project that is intended as a guide to social responsibility for microentrepreneurs, and I’m finding that while there might be some advantages to being a microbusiness (less rigid hierarchical structure, leaner, and often a mind set that “gets” sustainability), it’s challenge to implement a lot of the standard S-R practices because there aren’t the same kind of resources–or access to resources.

    I’d be really interesting in learning more about your experiences with or thoughts on socially responsible microbusinesses (10 or fewer people).

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