What is Sustainability Integration & Why Is It Transformational?
Creating sustainability goals that are material to your business, focused, and impactful may actually be the easy part.
The art of integrating these into the fabric of a business is crucial to its success - and your sustainability integration must go beyond strategy.
Without embedding sustainability into business decision-making and processes you’ll continue to compete for resources at a disadvantage.
This is part 1 of 3 in a series highlighting the what, why, and how for robust sustainability integration in your business. You can read part 2 here.
What does sustainability integration mean?
For us, the simplest way to think about sustainability integration is to consider how materially relevant impacts are embedded into business decisions across the enterprise. At the core of business decisions is the allocation of resources (time, expertise, money, materials, etc.) in pursuit of your mission. Where you spend your money is the simplest reflection of what you value.
How you decide where to invest resources should reflect your priorities. In our experience working with all kinds of businesses, that can be easier said than done - mainly because identifying and aligning on what to actually prioritize is challenging.
But one thing is certain: If the programs, projects, and people responsible for addressing the environmental and social impacts of your business are not integrated into the decision-making process they will almost always be a lower priority. We see this happen even in cases where you have leadership support and public goals.
Why should sustainability integration be a priority?
When you fully integrate sustainability into your business decisions, processes, and operations you can transform the way the world impacts your business and the way your business impacts the world.
You can move from trying to mitigate your negative impacts to supporting more regenerative, circular and resilient systems - transitioning from an organization that may compromise our future to one that nurtures it for future generations.
From an operational standpoint: Without robust integration into the business operations where decisions are made (e.g. strategy, planning, got-to-market, HR, governance) your sustainability programs will be at a persistent disadvantage when it comes to resources. And there are all kinds of downsides to having weak performance on material ESG issues.
Your sustainability programs will struggle to make and maintain progress at the pace necessary to address the impacts your business creates. You will fail to drive the kind of action that enables emotionally-resonant story-telling and brand building that attracts new customers that value responsible businesses. Attracting and retaining the best talent becomes harder. And on.
At an enterprise level, we’ve seen robust sustainability integration help address the following problems:
Insufficient resource allocation
This is the big one - sustainability programs are rarely funded at the level that they need to be. In our experience, that happens for a variety of reasons. One big reason is that during the planning and budgeting processes, sustainability projects don’t get properly linked at a programmatic level to the products and services that are creating the impacts
The lack of linkage leads to deprioritization of seemingly stand-along sustainability projects due to finance-focused prioritization criteria (or lack of objective criteria all together), which means material ESG impacts don’t get addressed or are get greenwashed.
Ineffective cross-functional collaboration
By their very nature sustainability efforts require cross-functional collaboration to be successful. Why? The problems are complex, your sustainability professionals lack authority over other functions, and partners often lack accountability for delivering on sustainability-related key results, targets, or KPIs.
We see this happen most commonly when it comes to supply chain sustainability issues. Since so many impacts (e.g. greenhouse gas emissions, human rights issues, conflict minerals, etc.) happen upstream in the value chain, these issues require the sustainability and supply chain functions to deeply partner. Easier said than done.
Lack of company-wide accountability
Without effective sustainability integration it’s difficult to have good governance of these material impacts. It also means that many of the cross-functional partners are not directly accountable for helping to deliver on sustainability goals or key results.
That lack of accountability undermines most attempts to effectively collaborate across functions in the company - relying instead on key stakeholders to spend their social capital to try and deliver results. How many times have you heard someone imply “that just means more work for me” when you’re trying to drive implementation for sustainability programs?
How can you approach sustainability integration and business transformation?
We know that having smart goals is a key ingredient in driving performance, engagement and lasting profitability. We’ve worked with clients to set science-based climate goals, packaging sustainability goals, biodiversity goals, and others for material impact topics for their businesses.
Building goals and enterprise objectives & key results (OKRs) that link those high-level goals to nearer-term plans and action is a critical foundation for sustainability integration.
Once you have sustainability integrated into enterprise goals and/or OKRs, you have the basis for determining how you’ll achieve those goals. Building out a strategic plan that effectively integrates sustainability is the next step.
We hear this a lot - “sustainability must be part of corporate strategy” to make progress. That’s true. But how it’s integrated can make a huge difference in successfully implementing programs at an enterprise level and achieving your goals.
Here’s what few people talk about and even fewer people have experience doing: Effective sustainability integration requires translating strategy into where the real decision-making happens in a business - operational plans, department roadmaps, financial plans, and corporate governance.
We do a deep dive on the “how” for sustainability integration in our next post - read it here.