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Why businesses fail to meet their sustainability goals

It will be sustainable, they said. We will adhere to ethical principles and substantially minimise our impact on the environment.

How often we hear these sentiments. And how often businesses fall short on transforming their operations to be sustainable or delivering a specific project with sustainability front of mind.

Why does intent to be sustainable often not follow through to delivery? And how does the supply chain complicate the process of achieving environmental goals?

Ben Peacock

Ben Peacock

The factors stamping on sustainability

Ben Peacock, founder and partner of brand, sustainability and innovation company The Republic of Everyone, says it’s a lot easier for new organisations to be sustainable because they can design the business from the ground up. “The big challenge, of course, is taking essentially an existing business model and adding new parameters into it,” he says.

“It’s never going to be easy. Firstly, culturally, you are trying to introduce a new way of thinking. Secondly, it challenges the assumptions that your business is built on and therefore you have to spend the time and energy to find new ways to do things.”

Peacock says sustainability is a massively complicated space. “It’s not as easy as going, ‘we know that A is better than B, let’s do that’,” he says. “It’s very different for every company so there is a lot of innovation, thinking, time, and trial and error that goes into that space.”

Suzie Barnett, who was executive director of the Green Building Council of Australia and now runs the sustainable marketing consultancy Good Marketing and PR, says aspirational goals are often talked about at the start of projects but seem to get lost along the way.

“Predominantly, at some point, it just all gets a bit hard,” she says. “It gets hard from a cost perspective. I think what also happens is there is a lack of true understanding about those aspirational goals and how they translate into reality … the aspiration goal of what they want to do and how they understand sustainability doesn’t translate into actual decision making down the line.”

Working on education sector construction projects in a voluntary capacity, Barnett has noticed sustainability goals becoming watered down during decision making around procurement, integration and energy models.

“Industry sectors like the education sector are not benefiting from the learning and understanding of sustainability from the commercial office sector,” she says. “There has been no trickle-down effect.”

Suzie Barnett

Suzie Barnett

Get the carpet tiles right – no excuse: get rid of stubborn

For example, one of the earliest adopters of sustainability from a supply chain perspective was the carpet manufacturers. A decade ago the commercial office sector transitioned from broadloom carpet to modular carpet tiles as they are easily maintained, replaceable and recyclable.

“I can’t remember walking into an office building that has been recently updated – Green Star building or not – and not seeing carpet tiles. [However] the procurement within the education sector for public schools, they still specify broadloom carpet. And when I brought forward all the learnings that we had around that as a sustainability issue and maintenance – you just couldn’t get it to budge. So you have sustainability goals and notions at one end and then as you go through the actual project, it’s impossible to actually make decisions based on those goals because of outdated procurement practices.”

Barnett believes a human element is a factor in discouraging change – “a human barrier of aversion to change because it potentially will create more work,” she says.

“I think there’s a lot on people’s plates, everyone seems to be really busy, and to step outside the project and take the time to re-educate yourself on something … there doesn’t seem to be the time or inclination to do that.”

Robin Mellon, chief executive officer of the Supply Chain Sustainability School, believes that a short-term focus often inhibits progress on sustainability goals. Many businesses or chief procurement officers concentrate on a project, a quarter, or a financial year to fulfil key performance indicators.

“That is completely at odds with the medium to long-term sustainability of the organisation – whether you’re talking about a council or a small business or a multinational – so there is this weird paradox where people are encouraged or focused on the short term often at the expense of the medium to long term.”

Another stumbling point is thinking it’s enough to have a sustainability officer or team and let the rest of the organisation carry on with business as usual.

hummer

Offsetting the Hummer is not ok

“It’s not OK to drive a Hummer and offset it and just continue driving it around,” Mellon says. “You actually need to edge towards better behaviour overall rather than just doing one thing well and letting everything else carry on as it is. I think a lot of organisations fall into that trap where they think ‘we have a sustainability services team’ and the rest of the organisation don’t even know how to switch the lights off or whether they can recycle or not!”

Greenwashing – when your statements to market exceed your actions – can have dire consequences.

Getting close to mainstream – but don’t stuff up on follow through: remember Vokswagen

Peacock says there are a lot of positives on the table for company that does sustainability properly. “It’s almost becoming mainstream where investors consider this in their investment strategies.”

But if they are just dishing out the rhetoric without the strategy – watch out!

Everyone will remember the Volkswagen fuel emissions scandal last year. Volkswagen admitted that its software was programed to cheat pollution testing. Its share price plummeted, its CEO resigned and the company forced to spend billions refitting vehicles.

“I’m very, very unhappy that that happened but I’m very happy that it rolled out how it did,” Peacock says. “Because it does send a very clear message to market that if you want to claim the benefits – particularly the brand and marketing benefits – you have to create the actions. And any company that is failing … I think needs to be held up as a really negative example to make sure that the other people who are doing the right thing are trusted.”

Another huge issue is modern slavery within the supply chain, warns Mellon.

“There’s 45.8 million people in modern slavery around the world,” he says. “I think Australian CEOs in the majority – not everyone, there are some companies that are making big strides – are burying their heads in the sand about this.”

Robin Mellon

Robin Mellon

Mellon advises businesses to start examining their supply chain and ask questions like, which countries does my supply chain touch? Are any of those “less developed” or “least developed” countries in my supply chain? What are those governments doing about this? How could we certify our materials?

“I don’t think there is a binary case of, ‘there is slavery in our supply chain somewhere’ to ‘there is none’. But I think what every organisation has to understand is that it will take lots of little steps to get from one thing to the other and you have to start now.

“Often it will take a tragedy of Rana Plaza proportions – where 1120 died in Bangladesh – for change to happen, and I think the more transparency, the more visibility through supply chains, the more we can ask questions and actually change towards better practices.”

Cleaning up your supply chain is similar to performance managing a member of staff, according to Mellon. “You don’t just get rid of them immediately, you say ‘these are the conditions’, ‘this is the level of performance that is expected of you’ and ‘we will give you three to six months to improve these things’ and ‘if they are not changed by that time then we need to reassess and look elsewhere’.”

Small steps lead to big results

Peacock says the idea of going from unsustainable to 100 per cent sustainable is almost impossible. “You also have to consider the pathways are not set and not clear,” he says. “People often say that sustainability is a journey not a destination.

“I think companies need to establish a purpose, a direction, a goal. They set that goal and then they start on the pathway of trial and error to get there. The answer is to act first and talk later.”

If companies have the strategies in place and are implementing those strategies, they don’t have to succeed at every turn. “You have to try to fail at some degree,” Peacock says. “But as long as they are genuine, they are putting strategies in place and adapting them as they learn, then I think those companies absolutely deserve all those benefits.”

The winners are those who change across the board, not just in carbon and water metrics

As a judge of the NSW Government’s Green Globe Awards for many years, Mellon finds it fascinating to observe what companies are doing to snare the 10-Year Sustainability Achievement Award.

“The ones who win are the ones who can show how things have changed across the board – not just in kilos of carbon and litres of water – but in all of these little metrics,” he says. “We have reduced flying hours per person or kilometres per person by 38 per cent over this period. Unless you see that coming down or see some effort going into encouraging media conferencing instead of flying to Melbourne, then they are not walking the talk.”

Companies that succeed addressing sustainability – Supply Chain Sustainability School partner Mirvac is a good example – have a strategic plan, a sustainability plan, a supplier report and codes of conduct.

In a blue-sky best-case scenario, Mellon would love to see organisations be measured on their efforts against four criteria to distinguish whether they are actually “walking the talk”. Organisations would be asked how they fare and the answers placed on SEEK or LinkedIn to assist prospective employees.

The four criteria of measuring performance

  • The organisation has a sustainability plan and all staff undertake compulsory training regarding the plan and understand how to achieve its objectives.
  • Commitment to sustainability doesn’t end at the highest level but can be tracked down from the board to project managers to external supply chains.
  • The organisation measures – and has programs to reduce – environmental impacts associated with individuals’ actions such as printing and travel-related emissions.
  • The organisation is involved with social sustainability initiatives across different sectors.

“So if you are looking for a job you can see which organisation is in line with your values and which are actually making a difference,” Mellon says.

“I think what a lot of organisations get scared about is that big jump from ‘where we are now’ to ‘where we have to get to’, and the principle of the school is to take lots of small frequent steps,” he says. “Small frequent steps are inexpensive, not that hard and they will actually get you a lot further.

“Work out where you are now roughly, benchmark, and then set some medium-term goals around different things – emissions, waste and materials – so you can aim to achieve something every month.

“Read what other people are doing, read what other companies of the same size are doing, read what other companies in the same sector are doing or, more interesting, read what companies in totally different industries are doing because often they have some really good non-aligned different thinking.”

Barnett says the commercial office sector has transformed itself and we need to find a way to link other sectors that are lagging behind.

She advises businesses to think about who they could bring into their circle.

“If you don’t understand or know something, find someone who does,” she says. “There are people who once they start on this journey around sustainability, particularly if it’s environmental impact, human impact, are so passionate. These people would be honoured to sit around the table with those in other industries and sectors who aren’t there yet.”

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