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Every t-shirt bought, every coffee ordered, every car driven has an impact on the planet. In order to be sustainable as a company in the long term, a company must put the sustainability strategy at the heart of its brand.
While only 34% of companies discuss ESG at every board meeting, 71% say it is built into their overall corporate strategies, according to research by the Diligent Institute earlier this year. This encouraging development indicates a growing alignment of ESG goals across the company’s operations.
At a recent roundtable, business leaders discussed how sustainability affects every part of a business. “For the longevity of a company, sustainability must be the focus. You need to have very clear strategies about what you want to achieve. It means understanding that if you start from a set of principles and actually build something that lasts, you’re more likely to last for the long haul,” says Jon Lane, CEO of fashion brand Passenger. He adds that sustainability can mean both environmental awareness and a company’s long-term success. “You have to build [a company] it goes on, it is not forced out of the market because it has passed its sell-by date.”
To do this, however, companies need to consider how sustainability is built into every part of their business, from operations and culture to communications and marketing.
For the longevity of a business, you must have sustainability at its heart. You need to have very clear strategies about what you want to achieve.
“Customers are interested in sustainable solutions,” said Alex Jennings, DS Smith’s Chief Procurement Officer. “So there’s a commercial reason for it,” he adds, even if the sustainable solution comes at an additional cost. For the packaging manufacturer, sustainability runs through everything it does, from design to production. To achieve this integrated approach, all 700 DS Smith designers completed circular design training. Not every “recyclable” good is actually recyclable. To counteract this, DS Smith’s design principles are based on sustainability and focus on improving recycling.
Similarly, Passenger’s design, sourcing and manufacturing adhere to the company’s sustainability principles. The company uses recycled fibers and sustainable textiles to reduce fashion’s carbon footprint. Choosing the right suppliers and using sustainable sourcing strategies is crucial for both companies. Lane says, “We’re trying to change the way people think, because people only do things because they’ve always done it. Part of our role is to come along and be the clumsy bastard who’s basically like, ‘Well, why are you doing that? You have to change that.”
Ideas for improving internal processes came from all parts of the company. “I would much rather be in a position where there are a lot of marginal advances in sustainability, rather than too many ‘big bang’ approaches,” says Lane, noting that the company’s culture embraces sustainability and innovation.
Jennings agrees that culture is essential to bringing sustainability to a company’s overall operations. “You have to make sure you have the right people to help you. Embedding is such a huge cultural shift in an organization that employs 30,000+ people. It has to start from the top.”
But for both, again, it comes down to commercial relevance. If the company is not making money, sustainability is neither here nor there. Both have found that sustainable practices not only attract great talent and provide a competitive advantage with clients, but can also improve efficiencies and encourage investment.
For growing companies, the talent pipeline is an important target when it comes to sustainability. dr Anjana Basnet, business lecturer at Arden University, stipulates that all business students at the institution complete a CSR and business ethics course as part of their studies. She says that sustainability is very important to her students: “I personally feel that the students are here. They have ideas that they will implement in the real world.”
These students eventually become the workforce that populate companies like DS Smith and Passenger. Jennings says, “We need to create safe environments where people feel comfortable being creative and innovative and challenging products, processes and mindsets. We need to make sure students understand that there is a commercial connection to this drive and not just a moral duty.”
However, once that culture is in place, it still needs to be communicated to the company’s various stakeholders. Basnet’s research took her to Nepal to study the sustainability reporting of publicly traded companies. She found that although companies had strong CSR activities, they did not communicate this to the investment community through sustainability or annual reports. While UK plcs are required to report, SMEs and unlisted companies are not. “It’s not that it’s not being done,” Basnet says of sustainability, “but it’s not being communicated to the outside world.”
Lane’s experience at Passenger mirrors Basnet’s insights. “We have never done a major sustainability report. We just don’t have the staff for it,” he says. “If we went away and wrote a report, that would distract us from actually making small, incremental changes.” However, the company uses its marketing and consumer touchpoints to communicate its sustainable purpose. Part of the customer journey is getting involved in initiatives like Passenger’s tree planting program or using recycled fibers.
At DS Smith, which reports annually on sustainability, communication goes beyond this one touchpoint. He says the company is working “up and down our supply chain to challenge our customers and challenge our suppliers when it comes to circular thinking around sustainability.”
Research from the Diligent Institute shows that 38% of companies have full board responsibility for environmental issues. This represents a dramatic change from 2019, when only 20% of companies saw full board engagement with environmental oversight. Similar percentages of companies engage the entire board in ESG and sustainability strategies, supply chain risk, and sustainability reporting.
We’re trying to change the way people think… Part of our role is to come along and be the clumsy bastard who’s basically saying, ‘Well, why are you doing that? You have to change that’
It takes strong leadership and an engaged corporate culture to promote sustainable business practices across the organization. The alignment of a company’s overall operations is critical to the success of sustainable business strategies. But then these ideas need to be implemented through supply chain and sourcing changes, manufacturing process updates, or training programs. And for these initiatives to really make a difference, the organization must then share them across the organization and the world through an integrated communications strategy.
“If we can tell the story of where the products come from or how we do things, that’s where we connect with the customer. It’s all about narrative and storytelling,” says Lane. “What we want to do is inspire ourselves and outsiders, so they know you can make small changes and they will make a difference. But also expecting better and asking questions.”
Those who ask questions and challenge processes may find that they make all the difference in embedding sustainability at the heart of the brand.
