Dozens of questions were submitted during the post-keynote Q&A session. Unfortunately, there wasn’t enough time to answer them all so we will be responding to your remaining questions via a series of blog posts.
In our last Q&A post we talked about contributing to environmental sustainability on a smaller scale, whether it be as individual consumers or as a 30-person company. Which brings us to our next topic: Who is really responsible for large-scale sustainable change?
Is it government or business? Entrepreneurs or corporate executives? Nathalie Udo and Greg Balestrero weigh in.
1. What is best way to persuade communities to be sustainable? In my point of view, sustainability rules should come from government as strategy, issue laws, etc. – Cesar V., Colombia
I don’t disagree, but we wrote this book because we felt that government was not acting fast enough, due to their inability to grasp the magnitude of the situation and the polarity of beliefs in the constituents they represent. That is why we see companies as an enabler for solutions. Yes, government should enact regulations and policies to address long-term issues, which may have a negative impact on their constituents. However, governments are notoriously short-sighted and regulations and policies are often enacted when the problem has already had a negative impact.
Knowledge of the potential and growing threat is critical. Take action by helping your community and your company, and understand the implications of ignoring action now. Most democratic governments worldwide have ways to get involved as a volunteer. Don’t wait for regulations, it will be too late. Act now to help the governments establish the right kind of motivation to get people and companies to change.
2. From your studies is sustainability more often driven top-down, bottom-up or by other drivers? As a practitioner of Business Process Management/Transformation tools, I’ve seen how it can be used to evolve and drive corporate greening and sustainability where it might not otherwise happen. I was wondering what you found. – Carolyn B., Canada
We found that it evolves from three basic directions.
– The organization is founded on social, economic, environmental and ethical values which, from the beginning, naturally lead to a fully integrated strategy.
– There is an “awakening” of a key leader that will drive and transform the organization. The leader may have had a realization based on a key global event, a competitor’s transformation, or some other public impact on their business. They may have a step-wise approach to transformation, perhaps beginning with zero waste.
– The organization changes reluctantly as they are forced to due to loss of market share, regulatory demands or customer decisions to shop elsewhere.
Regardless of whether the organization is aggressively pursuing sustainability or kicking and screaming through the transition, the critical enabler is to build a strategy that works.
3. What do you feel are the benefits to firms that practice sustainability and implement sustainability programs? I feel as though upper management may think it is just an additional burden to profitability. – Barry R., United States
You are exactly right; the power is in strategy, and strategy has to be based on a belief that sustainability “pays.” The benefits (other than caring for our world) must be driven home to push implementation of these strategies at a corporate level.
Our book covers ROI and payback in depth. The start for everyone should be a principle of zero waste in all aspects of business performance. These include water, energy, raw materials, travel, and semi-finished goods. All of these require money; savings in these areas go straight to the bottom line. Ethics and image is another area. The vast majority of publicly traded companies consider that as much as 15% of their value is based on the public perception of their brand. Tarnish it, and there is a negative impact. Also, we have shown that companies which do invest in and embrace sustainability have become a greater value for investments, and over the last 7 years, have outperformed their competitors.
4. How do business leaders handle the effects of politics (local, national and global) on sustainable strategy? – Travis A., United States
Business leaders have to keep an old adage in mind: Everyone is allowed their own opinion, but not their own facts. Business leaders need to learn to anticipate risks and challenges in the future and react to them as quickly as possible, regardless of the movement of governments. Anticipation of, and advanced reaction to, an inevitable problem that will lead to regulation is much more sensible than investing money in the losing battle of fighting regulation, particularly when the facts tell you what is coming. Business leaders must change in spite of the polarization, public opinion, and arguments over sustainability. Stick to the facts, and act on them.
5. Shouldn’t board room executives be given more responsibility to think about and implement sustainable strategies? – Litty J., India
In the really successful companies we studied, the management and governance boards were always given additional responsibility to think about, help shape, and implement key strategies. Even if “committees” were set up to implement these strategies, quite often the committees reported to the governance board with one or more board members being the liaisons or even accountable individuals for implementing these strategies.
6. What do you suggest to entrepreneurs who are just getting started? How should they plan their business model? – Sejal G., United States
Clear and simple, there are three steps for entrepreneurs. First, define your values based on sustainability. Make sure that you understand the four pillars and how these pillars will define how you want to be seen and how you want to act. Then build it into your strategy from the beginning; make sure that the strategy and resulting objectives are clearly defined and can be mapped through the values. Next, make sure that you build a “risk radar” that looks well beyond the current financial reporting periods. Be courageous and hold yourself and your organization accountable to abide by the values and strategy. Every person in the company should be held accountable to these values. Don’t accept anything less.
7. How do you define the separation between social responsibility and political influencing or do you see them as coincident? – Roy N., United States
If one is committed to social responsibility, then the difference is inconsequential. If you believe that the issues facing us are real, then you are now informed and how you act is in your power. I have written to representatives in the US Congress offering my help as a constituent—my job is to expose them to the facts so that they are informed. In this case, I am doing what I can to help them make the right decisions. Will it be different than my “ideal” situation? Most likely it will be a compromise, but at least I can help them understand what the possible consequences are.
The other issue is that of “inevitability.” In our book, we highlight that BMW and other manufacturers would be faced with an “extended producer liability” regulation in Europe. BMW realized before others that it was only a matter of time that as a manufacturer, they would be responsible to embrace a circular model for cars that had reached the end of their life cycle. At the time, they had three choices: ignore it, gear up to fight the European Commission and stop it, or get ahead of the curve and help to formulate an approach that would make sense. They chose to get ahead of the curve and act on it long before the EC did. It was an uphill battle since most of the other car manufacturers in Europe were choosing one of the other two options. However, they persevered and when the EC decided to develop the policy, they asked BMW to lead the team that would shape it. Was there a clear demarcation between sustainability and politics? I don’t know. I believe they acted as a pragmatic and responsible manufacturer.
Watch a snippet of Greg and Nathalie’s IPM Day keynote: