Does Your Organisation Have a Sustainability Mission Statement?July 16, 2021 2021-08-20 14:29
Does Your Organisation Have a Sustainability Mission Statement?
Does Your Organisation Have a Sustainability Mission Statement?
It is no longer business as usual. A recent UN Development Programme (UNDP) “People’s Climate Vote” released on 26 January 2021 (described as the biggest climate survey ever conducted covering 50 countries with over half the world’s population) revealed that people supported more comprehensive climate policies to respond to the climate emergency. “The results of the survey clearly illustrate that urgent climate action has broad support amongst people around the globe, across nationalities, age, gender and education level,” said the UNDP news release. These insights carry strategic implications for organisations and how they respond to increasingly pressure from stakeholders to adapt to the sustainability crisis.
The time has come for organisations to shift from the business case for sustainability toward a transformative sustainable business model. Traditional or current frameworks and strategies have not been helpful for companies to maneuver efficiently to pursue ESG goals. Organisations need to revisit their purpose yet be pragmatic in redefining their vision and mission toward the sustainable enterprise—an organisation that pursues a viable, profitable business model to maximise social and environmental well-being. In a sustainable enterprise, profitability is used as a means to achieve a mission rather than being an end in itself. Getting to that point is not an easy process but instead a journey that evolves over time where the enterprise must face many increasingly complex situations in the different economic and social contexts where it operates.
Many companies will need to critically review or reframe their mission and vision statements or their guiding principles and values – hence forcing an enterprise to define its raison d’etre; its purpose for being. This will show whether the company has committed to environmental, social, and economic sustainable outcomes or whether sustainability is even a priority. A sustainability mission statement and ESG-related values will be the guiding light on how a company behaves when winning or in challenging VUCA times.
Sustainability is now a hygiene factor as it touches all aspects of an enterprise’s activities, from strategy and business model to product/service design and use/consumption, all aspects of business operations, supply chain and end-of-life recovery or disposal.
A sustainability mission statement spells out in a clear, concise, and inspiring manner about a company’s purpose and role in the society at large. The statement clarifies how sustainability will guide corporate actions; it inspires employees and business partners, and is pursued consistently and religiously to achieve the company’s vision. This would then curate and align high-quality “must have” consumer and investors insights. However, as the sustainable business evolves, the terminology is likely to become ambiguous. There is currently no single, authoritative source for definitions on what sustainability means. Stakeholders may have different interpretations of key terms, which can make it a challenge to lead productive conversations about sustainability initiatives.
Within the enterprise, each functional role may have a different perspective of sustainability through its own specialised lens, for example:
Legal perceives it as a reporting and compliance issue. Public affairs and communications see it as community engagement. Real estate and facilities management see it as water conservation, energy efficiency and renewable energy contracts. Human Resources perceives it as diversity, inclusion, equality, employee engagement and flexible working arrangements. Finance will view it as investor relations, financial liabilities, risk mitigation and ensuring financial returns. Marketing will see it as market-facing strategic differentiator and brand issue. R&D will consider the carbon footprint, product, or service design challenge. Supply Chain sees it a responsible procurement or transportation challenge. Information Technology considers it a data management and technology innovation opportunity, or energy-efficient data centers.
All the perspectives are correct from each functional point of view because sustainability encompasses all those things and so much more. A shared understanding of what sustainability means to the enterprise and what is material to its management and employee must be embodied in the sustainability mission statement. This forms the basis from which an integrated and strategic approach is taken for a company to define its unique value proposition which will become its competitive advantage.
It is key that a sustainability mission statement1 be meaningful to management and employees on:
- Their clarity of purpose
- How the statement builds on the shared purpose of the company
- Enabling the desired organisational culture
- Ensuring alignment on key targets, both financials and non-financial KPIs
- Creates accountabilities at all levels of the company
- Provides the line-of-sight from strategy to execution
- Delivers a competitive edge over others that have not figured out ESG values
An early hurdle in the journey is to help stakeholders become familiar with new terms and ideas related to corporate purpose, social responsibility, and sustainable business practices. In addition, the goal should be evolving a shared understanding of what sustainability means to an organisation, rather than something too generic or high level, or something specific and tactical.
A robust framework2 can be useful in guiding business leaders through the dilemmas they face in making sustainability a reality in their organisations, such as how to reconcile sustainability and profitability in their execution. Sustainability is not what a company is but rather what it does over time to become sustainable. This framework posits a migration path with milestones that could be summarised in five critical steps:
- Action-planning must be synchronised with its sustainability mission statement. This would mean that companies need a process to connect their longer-term aspirations with a sequence of actions or initiatives over the strategic time frame. Over many business planning cycles, outdated orthodoxies and paradigms must be challenged. There should not be any “sacred cows”.
- Prioritising the critical few actions that should be taken immediately vis-à-vis “low hanging fruits”. It is important to realise quick wins to build momentum.
- Understanding the trade-offs between short-term tactics and long-term strategy. This is the process to identify the gaps between the current state of play and its desired future state which entails selecting optimal gap-closing actions and defining the key milestones to track progress.
- Balancing the constancy of purpose with external market forces and business cycles. Companies often cut budgets due to uncontrollable or external factors but with a clearly articulated story, it would be easier to explain why in tough times certain actions including investments on creating a sustainable business should continue to be supported.
- Being realistic that strategy implementation is both deterministic and emergent. Corporate leaders know that strategic pivots are critical to remain relevant or risk being disrupted. For example, the oil and gas industry came under tremendous pressure during the COVID pandemic and had to rethink their future state and refresh their points of view on renewable energy.
- A toolkit that guides you in preparing your organisation’s sustainabilility mission and detailed insights can be downloaded here
- Speak to RHT Green for further information on our proprietary bespoke framework that can assist your company on the strategic development of a sustainable roadmap with key ESG milestones.