3 keys to making sustainability central to success
This is the second in a monthly column highlighting critical organizational design and development elements that support a sustainability strategy.
Last month, we highlighted the importance of a vision as a way to guide an organization towards sustainability. Now we’re turning attention on how sustainability can be structured within an organization — and how elevating it from within can lead to greater success.
Typically, there are three ways an organization can approach its efforts: by centralizing its work, integrating it, or embedding it.
When a vision first begins to bloom, a centralized approach makes sense with one person leading the way as it can be challenging for an entire company to implement a new initiative from the start. A few direct reports and some supporting groups of leaders might also join the effort.
This approach allows for focus. Be forewarned, though, that this can sometimes silo sustainability as a separate division within an organization. Usually, however, this morphs quickly to a broader-based vision as the leaders gain excitement through executing plans and seeing results.
Once efforts start to work – measurable differences in energy savings or increases in recycling, for instance – both employees and executives start to take notice. It may get mentioned in board meetings or team meetings, which can spark additional ideas about how to implement sustainability initiatives.
This sets the stage for integrating ideas across the business more broadly. There’s a desire to continue to increase the positive change, so projects get duplicated in other units or divisions.
When sustainability efforts spread across an organization, it moves to an integrated structure. Within this framework, more leaders are developed around sustainability, both within the “sustainability group” and throughout divisions of the company.
In an integrated approach, divisions will report and track their progress towards measurable goals. Sustainability Councils including executives and board members are created. Compensation may also begin to have elements tied to sustainability performance. The level of overall awareness and involvement also increases with employees as well. In this structure, there is an increased feeling of cohesion around sustainability and its importance to the company and people.
After achieving integration, an organization can move towards an embedded structure. Here, the sustainability mission is synonymous with the corporate mission. The CEO may be heavily involved, along with many executives and board members. Compensation across the company may be tied directly to goals around sustainability. Specific oversight committees and councils are common. Multiple goals spanning many years are created, tracked, measured and reported.
With this structure, teams of passionate volunteer employees are common. The idea of sustainability is prevalent and woven through the fabric of the company to the point where employees feel individually committed. The sustainability vision is core to the company and everything it does.
Creating an embedded structure helps ensure that a smart vision, passionate execution and positive progress can be replicated and grown consistently throughout the organization.
Benefits of elevating sustainability within an organization
There are benefits from placing responsibility for sustainability at the highest levels of an organization, or at units which span across an entire business.
Research has found that when companies embed sustainability structure and responsibility at the highest levels — especially when they are housed in units which span across organizations like finance, legal, public affairs, or communications — awareness and engagement of employees increases. Engaged employees tend to stay longer and are happier, according to Gallup.
And the closer a sustainability leader is within the structure of an organization to its CEO, the more external recognition a leader might receive for his or her efforts. Some leaders have received recognition in the Carbon Disclosure Project’s Leadership Index, as well as Fortune’s list of 100 Best Companies to Work For.
It’s also been found that an increase in recognition is correlated with how often results are reported to the board. Recognition demonstrates effectiveness internally, to a company’s shareholders and to the world.
Photo of man drawing diagram provided by Dusit via Shutterstock