Sustainability Steering Committees: Best Practices to Maximize Value
Making a product requires thousands of decisions - from one end of the commercialization process to the other.
That’s why effective sustainability management is a highly cross-functional effort.
An internal sustainability steering committee can be an important tool in effective decision-making, stakeholder engagement, and governance.
But how can you maximize the value of the committee?
Why establish an internal sustainability steering committee?
We’ve found that businesses establish internal sustainability steering committees for two primary purposes:
Effective Decision-Making & Shared Accountability: To help formalize effective cross-functional decision-making in cases where there are major financial implications related to sustainability trade-offs.
Example: A key raw material supplier for a high-profile new product launch is discovered to be linked to child labor abuses. Do you proceed with the product launch timeline or delay?
Stakeholder Engagement: To help employees and leadership feel involved and valued when it comes to sustainability issues.
Example: You want to gain insight into what sustainability issues resonate most with employees so you can understand how to shape internal communications on those topics.
Both of these purposes have value. But a single committee may not be the most effective way to accomplish either.
Best Practice: We recommend to our clients that they prioritize one purpose (i.e. decision-making or stakeholder engagement) because it will drive decisions how the committee functions, who should be members, when they meet, and what the deliver.
How do sustainability steering committees function?
Once you’ve decided on the purpose of the steering committee you can focus on how it should function.
For purposes of this article we’ve chosen to focus on a steering committee that is designed to help make difficult decisions.
There are several operational factors that should be clearly established for the committee:
Committee Authority: Inform and advise leadership or make final decisions? The nature and extent of committee authority will be shaped by the business mission and values.
Decision-Making Approach: Consensus, majority rule, something else?
Member Appointment & Removal: Which functions are represented, who is responsible for appointing and removing member when necessary?
Member Code of Conduct: How will members fulfill their obligations to the committee and engage in ethical conduct?
Member Terms of Service: How long do members serve on the committee?
Meeting Ground Rules: What are the expectations for attendance, engagement, etc.?
Best Practice: Create written bylaws that codify these operational factors. Have these bylaws formally adopted by the CEO and members of the executive leadership team. Review and update them regularly.
Who should the committee members be?
With the purpose and function clearly defined you can identify who needs to be involved in decision-making.
There are a variety of ways a business can structure the make up of these kinds of committees. The reality is that the members of the committee depend on particulars of the business.
There are some general criteria that our clients use to identify members:
Knowledge: Members should have in-depth technical knowledge of their function and how it intersects with sustainability issues.
Impact: Members should include representatives from functions that are directly impacted by decisions made by the committee.
Accountability: Members should be willing and able to take ownership of decisions made by the committee even if they disagree with them.
Alignment: Members should be invested in and supportive of the steering committee.
Best Practice: Attempt to create a balanced and diverse mix of perspectives in the steering committee. Senior leadership is important but not at the expense of effectiveness and collegiality. When thoughtfully constructed the steering committee can be a powerful and rewarding experience for members.
When should the committee meet?
We find that sustainability steering committees function most effectively when they have a regular meeting cadence. But not every decision will line up well with regularly scheduled meetings.
The committee meeting cadence should align with the rhythm of business and other key moments.
These commonly include but are not limited to:
At relevant gates in the product development and commercialization process.
Prior to leadership team and/or board meetings.
During key junctures in the enterprise planning process.
Best Practice: Empower the chairperson to convene the steering committee on an ad-hoc basis to ensure agility in decision-making. This is particularly helpful during crisis management.
What does the committee deliver?
The outputs of the steering committee will depend on its purpose.
It is also directly influenced by the needs of the business, member capacity, and organizational culture among other factors.
In the case of a decision-making committee, the outputs often include the following:
Meeting Notes: A summary of who said what, attendees, takeaways, etc.
Records of Decision: What was decided, why, and by whom? Who will be accountable for implementation?
Issue White Papers: Additional information is often necessary to make informed decisions.
Program Proposals: What are priorities for investment, innovation, risk mitigation when it comes to sustainability? These can feed into enterprise business planning.
Best Practice: Records of decision are critical. They document what was decided and why. They are an important part of effective governance and institutional knowledge.
Part of effective governance
Governance provides critical oversight and accountability when it comes to achieving goals, executing enterprise plans, and managing budgets.
Robust governance functions to help manage risk and enable agility in times of volatility and uncertainty.
Increasingly sustainability or ESG issues and metrics are included in governance as key measures of success. And board members are continuing to develop expertise in these areas.
An internal sustainability steering committee can play a pivotal role in good governance in your business. It provides a venue for decision-making and accountability that travels in multiple directions.