Published on February 5th, 2014 | by Special Guest0
Positioning Sustainability As a Driver of Corporate Strategy
In the second part of our sustainability series, our special guest blogger Jonathan Churchman-Davies, Independent Specialist Adviser for Innovation and Sustainability, writes about how business sustainability can be built into the overall corporate strategy. The first guest post in this sustainability series by Jonathan Churchman-Davies can be viewed here.
There are many definitions of sustainability out there. And you’d be right in saying that most of them are probably not useful. I might even go further and say that many are downright dangerous. Their peril lies in their ability to encourage businesses into sustainability ambitions that are irrelevant to the near term business environment.
Balance & Incorporation
The sad thing is that over-ambitious programmes usually do get corrected, but with credibility damaged, correction can go too far the other way. Sustainability is about balance – and any business sustainability programme should reflect this from the start, with sustainability issues being prioritised and built into overall strategy alongside other corporate issues. Strategy can be formulated in any number of ways- the important thing is how sustainability is incorporated so that issues are captured with an appropriate emphasis.
Sustainability - Outside But Not Shut Out
While you will have a normal strategy review cycle in place, you may need to review sustainability outside of this – for example if you have realised that your existing programme is unfit for purpose, or a major market shift is likely to occur. In such cases, ensuring that the review is controlled by the strategy team and built back into the main strategy, is vital. Sustainability must never sit outside, otherwise it becomes a costly, unintegrated add-on.
Teamwork To Identify Sustainability Issues
Whether as part of the regular review or an urgent update, the first thing you need is a representative team to identify sustainability-related issues and codify their impacts on the business. The team must be well-facilitated to ensure that all aspects are considered - not just environmental protection and regulatory compliance. They should draw in areas such as power and fuel price exposure, security and price stability of supply chains, social licence, impact of water shortages and flooding, energy price pressures on clients, efficiency of offered goods and services, use of performance data to prove competence in tenders and more. Some areas you will be managing already, but even these are worth a re-examination for deeper linkages.
As well as subject scope, their search criteria should also be time based. Will pressures that are minor today grow in significance over time or fall back? A case in point is the price of gas. This easy-to-use, reduced carbon fuel is attractive to industry and power generators and it’s even being converted into Gas To Liquid road fuels. Demand is growing – but so is supply, with Liquified Natural Gas supply chains giving access to previously stranded resources and unconventional gas extraction increasing. So will the price go up or down over the next ten years? It may have a significant impact on your long term decision-making and resultant cost base. Getting the right view is vital.
Compatibility With Corporate Strategy
Once the scopes and timescales have been determined, the framework that you use to tie down the materiality of issues to the business must be compatible with pre-existing corporate strategy processes. If your sustainability framework has been built both on and into your existing corporate strategy structures, then the mitigation and exploitation measures that arise should automatically align with your operational systems. This then makes it easier to accomplish the holy grail of sustainability – that it should be embedded into your company; that it is not an add-on, but is simply the way that you do business more efficiently, responsively and profitably.
Do you think that sustainability must be aligned with corporate strategy? Please comment below.
Jonathan Churchman-Davies is an independent Adviser for Business Development, Innovation, Energy, Carbon and Sustainable Operations. A former graduate of the Imperial College of London, he is now based in Wantage, Oxford, UK. Jonathan can be reached here:
photo credit: © grandeduc