Translating sustainability: what it means for your industry, market and business
Long-term success has always demanded the ability to read the room: to identify what’s important to internal and external stakeholders and tailor your offerings, business processes and communication accordingly.
Few areas of concern currently get as much air time as sustainability. To take just a couple of stats, a reported 73% of consumers say they would change their consumption habits to reduce their impact on the environment. Two thirds of people say they would pay more for a product from a company that demonstrates responsible practices.
In both B2C and B2B markets, these concerns tend to have a ripple effect, with parties as diverse as shareholders, fund managers, your clients’ procurement managers and even potential job recruits keen to check out your sustainability credentials.
But what form does sustainability take within your industry? What actions would be deemed essential, relevant and/or desirable in the eyes of the people who matter? Here’s how to unpack the meaning of sustainability within the context of your marketplace and wider business objectives.
What is a sustainability strategy?
Sustainability is frequently described as “managing the triple bottom line”, i.e. management of financial, social and environmental risks, obligations and opportunities (people, planet and profits). Harvard Business School refers to it as “doing business without negatively impacting the environment, community, or society as a whole”.
The challenge is in translating this into practice. Potential pitfalls include the following:
- Lack of universal norms. From recycle rates and water usage through to staffing policies, what’s acceptable or desirable can differ widely between industries and markets.
- Failing to grasp what’s important to stakeholders. Each company you sell to may have its own sustainability criteria and aspirations. Unless you understand these concerns, you cannot get on board with them.
- Expensive mistakes. For instance, you acquire an existing business/plant within a new target market with the aim of expansion. It later transpires that huge investment will be needed to bring that plant up to scratch with changing local ‘green’ expectations.
A sustainability strategy is a prioritised set of actions. It should tell you which specific areas to focus on to engage stakeholders, and drive performance and success.
How to translate sustainability for your business
This involves looking at your company’s operating model in order to identify sustainability risks and opportunities. Your research should also involve a review of legislation, upcoming legislative trends and best practice guidelines.
Peer research is also important. What areas are your competitors focusing on? Which companies offer up best practice examples?
Stakeholder research and consultation
Your aim here is to ascertain the sustainability goals and priorities of customers, investors and other stakeholders.
This will involve research (e.g. checking the sustainability/corporate social responsibility policies of individual companies). If you deal with public bodies or large organisations, are there upcoming changes impacting the way in which contracts are awarded (e.g. social impact clauses)?
Direct consultation may also be useful; examples include surveys, interviews or workshops. Areas to cover may include the following:
- Asking partners and customers to rank sustainability alongside other other purchasing considerations (e.g. price, quality, speed of delivery etc).
- Understanding how often decisions are made based on sustainability factors, and which decisions these are relevant to.
- Prioritisation of the sustainability factors they consider most important (do they value a green supply chain over, say, recyclability, for instance).
- Ascertaining what precise sustainability information they need from their partners in order to make decisions, or as part of their own sustainability agendas. What format should this information take, and how would they like to see it communicated?
- Exploring where stakeholders may be willing to pay more for products and services that align with their CSR aims, and what uplift they could accept.
- Asking stakeholders to set out their desired characteristics of a model sustainable partner.
How to use this research
Without a detailed understanding of the sustainability priorities of the market, suppliers, customers and consumers in your industry, time-consuming and expensive action on sustainability could be taking you down avenues which have little commercial value.
This type of exercise gives you an overview of what’s expected and desirable within your market. Armed with this knowledge, you can start to put together your own initiatives, knowing what stakeholders will be looking for, and which KPIs you should be tracking.
Need help with putting together your own evidence-based strategy? Speak to White Space Strategy today.