When a crisis starts, companies and governments often side-line environmental and social issues.
Creating a sustainability strategy quickly becomes an irrelevance when faced with more immediate challenges. It happened in 2008, when the Great Recession made the world prioritise the economy over the environment.
2020 feels different. The world is facing a decade of challenges in one year; the worst pandemic in a century; major ecological disasters, such as the fires in Australia and California; and protest movements bringing attention to social injustices.
But instead of sideling sustainability, many groups are making it a core part of their recovery strategy. Governments, at both a national and local level, are making investments in renewable energy and green technology a central part of their plans.
In the face of so many crises, there is an opportunity to learn from past mistakes and create a more sustainable economy.
DIGIT spoke with author and sustainability strategy expert, Betsy Reed, ahead of her talk at Digital Transformation about the importance of social and environmental issues, how companies can develop effective ethical strategies and the rewards they offer.
When asked, most people say they cannot wait for the world to get back to normal after the pandemic. However, Reed warned that this makes for a poor strategy. While it feels like 2020 has brought an array of challenges all at once, they have developing for years. If the root causes are to be properly addressed, it means creating a new status quo.
“You can cope and move on, but the systemic issues need to be fixed, like social inequality, like environmental degradation, like the fact that there are a lot of businesses winning awards for sustainability while their entire business model is based on exploiting the planet for profit,” Reed says.
“We can’t go back to pretending that a lot of systems haven’t worked for the great majority of humanity, and those systems are starting to break down.”
Big Problems, Small Solutions
The environmental crisis and Covid-19 pandemic are truly global, and as such, they require global solutions. While many countries are pursuing sustainable policies, major players are still lagging.
Xi Jinping has said China will become carbon neutral before 2060 after emissions peak in 2030. US presidential candidate Joe Biden said he would aim to power the US solely on clean energy by 2050.
However, the damage done to the environment in the next 30 years may be irreversible when these policies begin to bear fruit.
In the face of the immense scale of these challenges, it is easy to feel powerless. However, Reed argues that smaller players can still make major contributions.
“From having watched trends and working on these issues my entire career, I think solving these problems is out of the hands of leaders,” she says.
“I think that trends will force their hand. At this stage of the climate crisis, we’re on the cusp of that tipping point where it won’t matter what targets, what ambitions have been set.
“The reality is that for businesses to survive and create a sustainable business model, they’re going to have to do better than any government leadership,” she adds
While small actors may only make small contributions, it is the power to collaborate and inspire that offers the real solution.
“Individual activism adds up to trends and movements, votes and consumer action. If you look at recent movements like Black Lives Matter, MeToo, and Extinction Rebellion, those are individual actions pulled together.”
While these are examples of massive, global social movements, coordination and cooperation are key to creating sustainability strategies on a smaller scale. Within an organisation, sustainability cannot be built up from the ground or imposed from the top – everyone must be involved to succeed.
“It’s about setting a strategy and targets that are a stretch from a leadership level,” she says.
“Those will be very bespoke to different organisations in different sectors. But making sure they engage everyone involved is key.
“It’s about getting people internally bought in to setting those targets in a way that’s deliverable and empowering them to deliver the goals and stretch even further.”
The power of universal engagement cannot be overstated. Everyone in an organisation has a unique perspective, with unique insights into how operations can be made more sustainable.
“Some of the best innovations I’ve seen come from the people running factories, or on the shop floor, or developers, because they are passionate about what they do, and they know the nuts and bolts of it. They can take things in a direction that leadership wouldn’t even have thought of.”
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It is this diversity of voices that makes social sustainability such an essential part of strategies. Unethical labour practices silence voices – toxic workplaces, exploited and remote labour or homogenous leadership all make it difficult to gain and leverage those vital insights.
Unfortunately, in the same way that environmental causes have been side-lined in the past by financial issues, social causes are often pushed aside.
“They have been left out of the sustainability discussion because it’s easier to focus on inanimate objects rather than the human impact of what you do. It’s easier to just focus on your recycling, which is a liability when the human impact of an organisation’s workplace policies or supply chains aren’t also being considered.”
However, environmental issues frequently have a social element. Reed notes that climate change is disproportionately racist and gendered, having a greater impact on societies in the global south and on women and children. It is only by tackling environmental and social issues holistically that they can be overcome.
Sustainability strategies cannot be done piecemeal. They need to address systemic problems to be effective. The temptation for some groups is to engage in greenwashing or purposewashing – presenting the appearance of being a sustainable company without making the structural changes necessary.
“The risk is high, but the reward is also high,” Reed explains. “Without a sustainability strategy, you’re lacking diversity of innovation, and ideas and perspective and ability to reach new customers, new employees.
“If you have a workforce that doesn’t reflect who you’re trying to reach, you’re probably going to be speaking different languages from your key stakeholders, possibly even literally.”
“So having leadership who are bringing different perspectives is going to add a richness and a depth to perspective. That feeds into strategy, which then feeds into internal engagement and workplace culture and employee retention and then externally into how you communicate with your clients, customers and audience,” she adds.
With the world facing so many foundation-shaking crises this year, sustainability is no longer an option – it is a necessity. It is more than simply ensuring supply chains, hiring policies or management decisions meet certain standards or quotas. It is about ensuring that a company still exists in the next few decades
“A successful sustainability strategy is one in which an organisation knows that it’s going to continue to function and thrive in the next five to 10 years and beyond. It’s easy to think short term, but that’s not sustainable.
“We don’t want to use too many natural resources, we want to retain employees, to treat them well, we’re not at risk of violating future regulations, or we’re actually leading the rest of our sector in how to run a business.”
Betsy Reed will be speaking at the 5th Annual Digital Transformation Virtual Summit on October 28th. Register your place for free online.