With the 2degrees book club around the corner, our own Martin Chilcott discusses his view on the concept of embedding sustainability and those companies who seem to have gotten it right.
Elsewhere on 2degrees, Olivia Sprinkel, from consultancy Salterbaxter, has written a challenging blog on culture change and sustainability. In it, she cites a recent UN/Accenture survey which states that 81% of CEOs say that sustainability is “already embedded” in their organisations. Stop! I know, it is almost laughable. Which makes it very good timing for someone to come out with a clear definition of what embedded sustainability really is and a roadmap for getting there. Step forward Chris Laszlo and Nadya Zhexembayeva and their new book: Embedded Sustainability: The Next Big Competitive Advantage (www.embeddedsustainability.com).
The duo define ‘embedded sustainability’ as follows: “Embedded Sustainability is the incorporation of environmental, health and social value into the core of business with no trade-off in price or quality – in other words with no social or green premiums.” Early on in the book, they contrast ‘embedded sustainability’ with ‘bolt-on’ sustainability (see table opposite). ‘Bolt-on’ is what I suspect the CEOs in the Accenture survey were really saying “yes” to.
Now I don’t want to ruin a good read (and it is a good read for those wanting a clear roadmap to embedding sustainability), or attempt to paraphrase the essence of their message, particularly as Nadya is herself going to do the latter in a series of blogs as the opening to our Book Club. What I’d rather share with you, are some observations following two conversations I had recently with senior executives in Unilever and Tesco, which throw some reflected light on the ‘embedding’ challenge.
The first was with Geoff McDonald, Global VP HR Marketing, Communications, Sustainability & Water at Unilever, who was a key note speaker at our recent Summit. Geoff’s job title says it all. Ok, it’s a bit long, but what it reflects is Unilever’s ambition to place sustainability at the heart of their business by dedicating a senior HR executive and their team to the task. Geoff doesn’t come from an EH&S or CSR background. People and organisational performance has been his ‘thing’ for decades and placing sustainability at the heart of performance is what he is now focused on.
Some of his work is obvious in its importance (if not in its execution) such as building Unilever’s Sustainable Living Plan metrics into individuals’ KPIs, recruiting sustainability minded graduates and building a culture that sees sustainability as opportunity not red tape. Other areas are more nuanced and particular to a marketing-led company like Unilever. As Geoff puts it, “our brand people are excellent at getting market insight about what consumers need today, what we need is to develop market foresight around sustainability and what they will need tomorrow.” In other words, Geoff and Unilever are trying to understand how to place sustainability at the heart of the Unilever marketing process and machine and to use it to build their future competitive advantage. To do this, he needs to make every marketer in the company a champion of sustainable business.
The second was with Helen Fleming, Director of Climate Change at Tesco. As you may have read elsewhere, 2degrees is working closely with Tesco and its top 1000 suppliers to help them collaborate to reduce the carbon in the products they sell by 30% by 2020. I won’t hesitate to tell the world what a great program this is; because it is. However, the real work of embedding sustainable business practices at the heart of the global retailer is being planned behind the scenes. Helen’s team is working with the category managers (Tesco’s equivalents to Unilever’s brand marketers) to identify a way to embed carbon reduction targets into the technical specifications for buying products.
Perhaps a simple way to tell whether a business is making progress towards embedding sustainability is to ask one simple question: is sustainability being placed at the heart of its core competence? That’s marketing for a brand company like Unilever, or buying for a retailer like Tesco.
As a final goodbye, I conjecture, ironically, that if either Paul Polman or Philip Clarke, (CEOs of Unilever and Tesco respectively) answered that Accenture survey, I bet neither would have said that they had sustainability embedded yet, but at least they know what it means and are on their way to making sure it happens.
Be sure to join in on the discussion for our 2degrees Book Club launch this April. Read the author's summary in Embedded Sustainability: A strategy for market leaders. You can receive 20% off when you order from Greenleaf Publishing.