Embarking on a sustainable journey for your business
The stages of sustainable and circular transitions
One main pain point for a company embarking on its sustainable journey is the first decision and initial action of 'the planned transition’.
The Uncertainty & Questions
How do we start? Where do we start?
Do we change everything? Can we ever reach circularity?
Should we start with carbon accounting? Do we need an ESG report?
How to let our customers know about our sustainability vision? Do they care? Can we involve them?
How can we enhance our brands through our sustainable strategies?
How do we measure our waste? Should we start a ‘take back’ program?
Do we need to stop working with suppliers who don’t follow the same principles?
Sometimes such thoughts can be paralyzing that business owners/directors end up with business as usual with the notion that:
We will start once we have more clarity
But the thing is starting a sustainable and circular transition can be messy and foggy. The clarity often materialized in stages as you make the first decision that leads to the initial action.
The first decision and initial action are often only a tiny part of the overall strategies. However, they are essential in building and shaping a lasting change within the company.
A change that is conscious and can be sustained over a period of time.
The Stages of Transition
In a literature review on transition theory, Hossain (2016) identified that successful transition initiatives are influenced by vision, leadership, and (formal and informal) partnership with different stakeholders. In a transition initiative, leadership roles are important in building trust and positive dynamics. At the same time, engagement with internal stakeholders (e.g., teams and staff) is essential in ensuring the success and continuity of such initiatives.
In a nutshell, there are two stages of transition when a company initiates its sustainable journey.
The first stage is the conceptual framework which includes a broad overview of the goals. This macro view can come in a form of a ‘roadmap’ where companies established their goals and direction of transitions.
The second stage includes the actions and decisions required to reach each milestone. These can be small and insignificant, or bold and substantial. Either way, every decision, and action bring the company a step closer to its goal of sustainability and circularity.
The first stage is relatively common to achieve as it is more conceptual. There is plenty of information to support its development. For example, case studies, courses, and training are available in the field of sustainability and circularity. However, the second stage can be quite tricky as it involves applying the concepts, theories, and ideas in a specific context i.e the business and its daily activities
It is important to highlight that the process between these stages is not rigid and linear but discursive in nature. This means the process happens in iterations to suit the objective, constraints, and limitations. Be prepared that different iterations and parallel implementations are possible. Therefore, it is advisable to be flexible and take a goal-oriented approach.
The Strategic Plan
Building a roadmap is the first stage towards a green transition. The second stage is to move from the starting point to the first milestone and continue to move forward.
For example, if carbon accounting is the first milestone in the roadmap, many decisions need to be considered in completing the milestone. Having a clear objective and structured plan will help in making the decision and initiating the first action.
It is also possible that carbon accounting is the roadmap for a company (instead of a milestone) in a transition towards sustainability and circularity.
To illustrate this further, let's think of a scenario.
Company T plans to start accounting for its carbon emission. Their decision was partly influenced by the 12th Malaysia Plan.
The plan highlights the country’s vision to reduce GHG emissions to 45% of GDP by 2030 in line with the Paris Agreement. The plan also indicates the implementation of carbon pricing and carbon tax with the ambition to be a carbon-neutral country by 2050.
Establishing carbon accounting capacity is part of Company T’s strategy to build resilience for the business in the future.
There are different ways to measure how much carbon a company is emitting. Therefore, it is important to identify the method that fits the situation best, both in theory and practical.
The company decided to use the GHG Protocol, one of the common standards to measure and manage a company’s greenhouse gas emissions. The standard classified emissions into three scopes:
Scope 1 — Direct emission by the company assets and resources (e.g. company facilities, vehicles, plants).
Scope 2 — Indirect emission from the consumption of purchased electricity, steam, heat, and cooling (e.g emission generated by the energy providers)
Scope 3 — Indirect emission across the value chain which includes both upstream and downstream activities.
As carbon accounting is a new venture for the company, they decided to focus on establishing a good ground for Scope 1. The first step is to measure the emission of the company’s owned vehicles i.e their diesel and petrol consumption. This measurement is part of ‘Mobile Combustion’ one of the four categories within Scope 1 (the other three being ‘Stationary Combustion, Fugitive Emissions, and Process Emissions).
This scenario underlines the first decision (GHG Protocol → Scope 1→ Mobile Combustion) and the initial action (establishing a baseline for the company’s diesel and petrol consumption).
This highlights a preliminary part of the initiative in establishing a robust carbon accounting system within the company. Such effort can be expanded or accelerated further depending on the resources allocated for the transition process.
*Notes: For now, Scope 1 and Scope 2 are mandatory in GHG protocol reporting.
Internal Resources: Individual and Collective Efforts
Embracing both top-down and bottom-up approaches are beneficial when it comes to changing the company culture i.e. ways of doing things.
There are two important criteria in implementing sustainable strategies— individuals and collective efforts. Individuals in this context refer to both a person and an entity (e.g. department or team) and a collective refers to group initiatives or initiatives from a network of groups.
Sustainable and circular actions don’t usually happened in isolation. Relations, cooperations, and collaboration are essential when it comes to activating your sustainable strategies.
The move from Stage 1 to Stage 2 can be big, messy, and uncomfortable to say the least. It can also be exhilarating, fun, and meaningful. The process is about bringing visions and ideas into the day-to-day business reality and the continuous effort to sustain the transition.
When a company decides to embark on a sustainable journey, it is important that the team/staff are also on board. To achieve this, internal onboarding initiatives such as training, knowledge exchange, and understanding the implementation strategies are essential in making them part of the force to realized the company’s vision in sustainability & circularity.
It can be a challenge if the team/staff don’t share the same vision or ideas.
“We are doing this because our boss thinks its a good idea”
This mental view may influence their approach to tackling issues that might arise along the transition process. It also hinders the chance to capture sustainable opportunities within their field of expertise.
There are plenty of business opportunities in the context of sustainability and circularity. Thus, expanding the knowledge of the team and staff in the area enable them to capture such opportunities and bring new ideas into the company.
In Summary
There two basic stages of transition when a company embark on a sustainable journey.
- Stage 1 includes the conceptual framework where where companies established their directions of transition.
- Stage 2 involved decisions and actions to reach each milestone within the transitions process.
The process between the two stages is not linear but discursive and happen in iterations.
Implementing and sustaining sustainable strategies required both individuals and collective efforts. Thus it is important to bring the internal people onboard to understand the vision and its strategic implementation.
