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How to align sustainability with business strategy – part one

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Environmental and sustainability PPIs being presented to a stakeholder.

In part one of this two-part article, TURLOUGH GUERIN considers the responsibility of environmental and sustainability professionals in aligning their ideas with an organisation’s development agenda.

Executive summary

Environmental and sustainability professionals (hereafter ESPs) seek funding for projects, programs and initiatives (PPIs) for the sake of driving an organisation’s sustainable development agenda. While the intent may be good, it is a rare organisation in which these PPIs receive support in their own right without a business case being presented. As such, it is not unusual for such PPIs to never see the light of day, with many being perceived by business executives as part of an environmental or sustainability ‘agenda’ and/or as being out of line with with the organisation’s financial objectives.

In the author’s experience, the reason for this is that the ESPs are usually the primary sustainability champion within an organisation. Their focus is not necessarily on ensuring the establishment and clear understanding of the underlying business case and making sure PPIs serve the interests of the organisation. One of the most important skills these ESPs can gain is that of asking a focused line of question in order to ascertain the organisation’s needs and what part their own role and proposed PPIs play in meeting them.

Across two parts, this article will provide a checklist for ESPs to use as they conceive, develop, discuss, propose and seek funding for environmental and sustainability PPIs.

Introduction

As with any department of a business, those run by ESPs are required to develop business cases in support of any PPIs they propose. What is often missing from these cases in particular, however, is a clear understanding of the financial business model established by the organisation the project is designed for. In addition, they tend to use language familiar to ESPs rather than the language and nuances of those in the organisation who oversee its commercial responsibilities.

Understanding the business model is one of those crucial issues that often go overlooked by ESPs until its too late. Some relevant financial information can be elucidated from strategic plans, annual reports, financial accounts and published financial statements. However, not all of the required information needed to identify and plan for environmental and sustainability-related projects can be found in such documents, and for private companies this information is simply not available.

What is required of the ESPs is business thinking formed by asking business-focused that will enable them to determine whether their PPIs align with the organisation’s core objectives and whether or not these PPIs should be progressed.

Purpose

The purpose of this article is to provide a checklist for ESPs and managers to assist them in securing funding for PPIs by getting to the underlying business-related issues in the organisations they work in and/or support. While the author recognises the challenges ESPs face when developing and proposing projects for funding, such professionals need to learn the language of business and be prepared to uncover the business model. This can then enable alignment between sustainability and business objectives.

The questions in this study have been organised around the successful business text and training program Business Think, as well as from the author’s experience of working in sustainability roles.

Barriers to adoption of environmental and sustainability projects

The barriers to adoption of environmental and sustainability-related projects are well documented. There are many many reasons why environmental and sustainability projects are not adopted. It’s a multi-factor challenge, however if the organisation’s core purpose is not taken into account then PPIs are not likely to be approved.

The absence of a clear and compelling business case is a critical reason why environmental and sustainability PPIs are overlooked and not adopted.

Questions for environmental and sustainability projects

The following series of questions and concerns have been developed to support business thinking by ESPs. While these questions apply to any business situation, they have been prepared for an audience of ESPs because of the author’s experience and the focus of the article. Even if answers can’t be provided, these questions are, at a minimum, a way to start conversations with the finance, commercial and executive arms of organisations. They are also meant for ESPs to ask of themselves and their team.

There are nine questions and concerns overall. In this first part of the article, we will look at four of them.

1. Do you know the objective of environmental and sustainability projects, programs or initiatives?

For your organisation to take environmental and sustainability PPIs seriously, you will need to decide on and understand the objective, scope and end in mind for the proposed PPI. These could relate to the following questions, the answers to which should focus on your rationale for identifying and running this particular PPI.

  • What is the burning platform or the compelling reason to act or change?
  • Do you have a compelling argument for this PPI?
  • What is your destination, end point or future state?
  • Why would the company want to start on this journey?
  • Is it in line with the organisation’s business strategy?
  • What would this PPI enable the company to do and achieve?

2. Have you ensured the right people are involved?

This should include the people who you think are needed from the organisation’s perspective. The right people aren’t necessarily those people in the business that you believe support the environmental and sustainability PPIs. Relevant questions include:

  • Is the decision to undertake the PPIs sitting at the right level of authority in the business or organisation?
  • Are you considering and, where necessary, working delicately and sensitively with the egos of others to keep the dialogue open?
  • Have you checked your own ego at the door?
  • What changes do you need to make in order to lead change in the business or organisation?
  • Are you choosing this PPI because the best people for the job are involved or just because you are most comfortable with the people already in the room?
  • Are you getting senior executive and/or board input?

3. Have you ensured diversity of thinking and encouraged those involved to get curious?

Ask questions and gather perspectives from across the organisation. Promote diversity of thinking. Ask yourself and others:

  • Are you being sufficiently curious?
  • Have you jumped to a solution too soon?
  • Why work on this project and not another?
  • Do your customers and suppliers think the PPIs would be worthwhile?
  • Are you involving all critical stakeholders within the organisation?
  • Will the PPI held build these relationships or put them at risk?
  • What would your competitors do if they were in your position?

Check back tomorrow for part two of the article, in which Guerin poses six more questions and summarises the responsibility of ESPs.

Turlough Guerin is a non-executive director on several boards, including Bioregional Australia Foundation, a champion of the global One Living Planet framework. He is an advocate for sustainable business, strong and effective climate governance and is a fellow of the Governance Institute of Australia.

 

Image: LinkedIn, via Pexels.com

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