Corporate Sustainability Programs series: The Emperor’s New Clothes – Part 1 of 3
1 – Welcome, I’m Dr. Mitch Kennedy, owner of Design with Nature. In Part 1 of this 3 part video series we explore the current status of Corporate Sustainability Programs – Are they effective? or just Fancy Dress?
2 – Current Perception
You have probably seen great exclamations in the press that “So & So” company just released its Annual Sustainability report. and the crowd cheers!! Indeed there is great deal of positive press about companies stepping up and reporting. But what is motivating this behavior? In my opinion there are 2 major drivers.
3 – Peer Pressure
The first driver is Peer Pressure. Let’s look at the stats. As of last year there were over 32,000 Corporate Sustainability Reports registered with the major third party sustainability clearing house – CorporateRegister.com
3,000 organizations submitted their carbon footprint data for the Carbon Disclosure Project.
And over 26% (better than 1 in 4) of the Fortune 500 companies already had a Vice President or C-suite executive, managing sustainability.
4 – Driver #2 The Supply Chain
The 2nd major driver – comes from Customers wanting their supply chains to be “green.” Some of you may already be familiar with this. For example, Walmart sends out a survey to its vendors asking for information on the environmental impacts of packaging, shipping & transportation and the current initiatives underway to reduce or improve those areas. As you can imagine, if your biggest customer asks for something and you don’t have it, there will be a rush to cover the bases. Supply chain programs have been very effective at getting smaller companies to initiate Sustainability Reporting.
5 – Communication a Surrogate for Action
However, despite peer-pressure and supply chain pressure there is a perceptual issue about who is a leader in the field of Sustainability. A 2012 Globescan survey of what determines the perception of leadership showed that “Commitment to sustainability values” was the overriding factor in being seen as a leader. How exactly does one appear “committed to values”? Well according to the survey it’s the creation of a “presence in the press” and marketplace.
What surprised me, is that “Integrating Sustainability into core business models” and “Innovation / research and development” were significantly lower on the list of what defines leadership. These two categories represent huge opportunities for benefiting the corporation, the customer and the globe.
6 – Reality: The Emperor’s New Clothes
While the title of the talk is in jest, it’s not far off the mark. It would appear from several recent surveys that not JUST the public is deluded about what the true benefits of a Corporate Sustainability program is or can be.
7 – Most Executives think they are greener than their rivals
For example, a 2010 survey of Fortune 1000 executives found that 90% thought they were “greening” they’re organizations. AND 70% of those thought THEY were the only ones doing it!!
8 – The Delusions continue
with 51% of the CEO’s not knowing if their sustainability program was actually cost-effective. So a pretty clear picture emerges here…While there is a lot of hand waving about how “we are going green”, most programs have NO metrics to measure effectiveness. AND Worse still – The real low-hanging fruit and market opportunities of sustainability is not being harvested.
9 – Design with Nature believes sustainability can and should be an integrated operational parameter within EVERY organization – because of the value it adds, and risks it can avert.
Here is what your Sustainability Program should be producing. These can all be easily obtained:
- Improved Operational Efficiency
- Increased Communication with Supply Chain
- Reduced Product Footprint
- Elevated Brand Value
The sad part is so few companies are fully engaging these aspects, and as shown before, obviously don’t know they are NOT REALLY wearing the garb of Sustainability.
10 – DwN Closing Ask
We welcome the opportunity to help you figure this out for your organization. Please contact us for your free 10 minute consult.