Nine takeaways for sustainability in 2020 (… and a prompt)

At Read the Air, we like to be optimists about what it is possible for businesses to achieve if they put their energies and heads to it. Since my cofounder at RtA Trista Bridges and I started reporting in 2018 on how companies are embracing the SDGs and starting — or advancing — their sustainability journeys, we’ve found many positive indicators that there’s a sea change in how they understand their position in society.

But there’s still far to go.

This year, the Covid-19 pandemic and recession made clear the gap between where we are and where we need to be, not just in areas that companies were already working in, but in others that they were not addressing, or even aware of yet.

Very few businesses have put sustainability and the SDGs truly at the core of their business strategy, and there are a host of issues that businesses — across industries — are actively wrangling with in common.

Within organizations, employees desire to understand sustainability and how it will impact their work

At best, the majority of companies today are still at the stage of priority- and vision-setting for sustainability strategies, and they are struggling to move to the next level.

Here’s nine key takeaways that we identified in our book “Leading Sustainably”, which apply to this year’s unusual circumstances:

1. Sustainability is not yet fundamental to business models — This is a journey companies are on and no one has mastered it

2. Companies are trying to move beyond having a “Vision” for Sustainability to fully systemizing their initiatives

3. Companies are struggling to measure and assess performance on sustainability and the SDGs — there’s still a lack of widely agreed upon frameworks and tools, which deters companies from fully moving their businesses toward sustainability

4. Investors are acting as enlightened managers of capital to light the way and drive adoption

5. Greenwashing is increasingly not possible — cheap talk is easy to uncover with new frameworks and benchmarking, while civil society and related organizations are paying rapt attention to what companies are saying and what they actually do

6. The supply chain is a major focus of sustainability efforts; there is great room for progress here

7. There is a race for talent, who are becoming pickier about a company’s position on sustainability

8. Within organizations, employees desire to understand sustainability and how it will impact their work

9. Collaboration and partnership are essential to success; efforts required are too complicated to do alone

Broadly speaking, today, there’s a spectrum of progress, and organizations are at different points along the way in their journeys. A major obstacle is that knowledge is lacking, and creating messaging on sustainability that can be understood, embraced and acted upon by their teams is a challenge for even the most advanced organizations. Added to that, there are far too few experts in the field of sustainability today to fulfill the demand for filling functional roles in the company with such people.

The way forward

Still, motivators for businesses to push forward with sustainability initiatives are not hard to find. Investor expectations, the risk of Greenwashing and a race for talent are all urgent issues that companies must address.

businesses have the opportunity to take this unique moment in the Covid-19 recession to make sustainability-driven decisions … that can bring them out of the crisis as sales leaders

Businesses should focus on the final three takeaways as they move to overcome the obstacles to their progress. They should make sure their vision attracts mission-aligned talent, and then they must empower employees to make sustainability-driven decisions by spreading the required knowledge across their organizations. This requires educating their employees on the sustainability concepts that are relevant to their organization. Doing so is not only an opportunity to advance the enterprise as a whole, it can also ensure that you are able to hold onto the best talent.

You can’t expect to do this alone, though. Whether you join forces with other sustainability-aligned businesses such as your suppliers, customers and even competitors, or NGOs and various civil society groups, local and national governments, or others, partnerships are vital to your success.

What’s changing

While we see that there is still far to go, there are bright lights on the horizon.

Big picture thinking about the Covid-19 pandemic should clearly show the need for more progress to be made in becoming a resilient organization through a sustainability transformation — and the existential danger that the next climate change-related crisis might cause companies that don’t make such progress.

Another positive is agreement we’re seeing about how important it is to have harmonized ways to measure and manage sustainability. In 2020, the International Organization of Securities Commissions (IOSCO), standard setter for the securities sector, and the International Financial Reporting Standards Foundation (IFRS), which develops accepted global accounting standards, started looking at how to standardize nonfinancial reporting with sustainability disclosures and global sustainability accounting standards.

And businesses have the opportunity to take this unique moment in the Covid-19 recession to become more profitable by finding their purpose. By making sustainability-driven decisions in their moves around operational efficiency, market development and asset investment, business can rise out of the crisis as sales leaders, with EBITDA that outperforms their less sustainable peers.

We’ll look more closely at this last point in our next article, where we examine how Harvard professors Ranjay Gulati and Nitin Nohria’s 2010 paper “Roaring Out of Recession” applies this time around when new forces are causing businesses to rethink all aspects of their operations and position within society, and becoming more sustainable has been recognized as both a solution and opportunity. We’ll also cover the five steps that businesses can take to make it possible to harness sustainable concepts in their strategic decision making about operational efficiency, market development and asset investment.

It’s been a sobering year, and I’d say still too close to have a proper view on. But the immediate response to the crisis has shown that individuals and organizations are ready to mobilize to find better solutions when faced with reality. I’m continually astounded by the volume, depth and range of discussions that are going on about any issue you can imagine — agriculture, biodiversity, buildings, power, mobility, migration, waste and on — and that participants across the spectrum are not discussing “what’s the problem” but “how do we create sustainable solutions to resolve the problem?” It’s inspiring to see that investors, businesses and international civil organizations have picked up the slack where national leaders often have fallen behind.

We may have far to go, but we know better now where we are, and where we need to be. Business as usual is no longer an option. We know from the results of academic research and business performance outcomes that, as Dr. Mark Milstein, Director of Cornell’s Center for Sustainable Global Enterprise and Clinical Professor of Management, says, “sustainability is where the growth lies; it is where the money is.”

So here’s the promised prompt: In 2021 it’s time for businesses to capitalize fully on the opportunity the have before them — educate your teams and build out your sustainability program. Let’s get to work, and start today.