Overcoming Business Sustainability Hurdles – Part 1
Last week we discussed the ten most common challenges sustainable businesses face in the article, “Top 10 Sustainability Hurdles for Businesses in 2013“. As promised, this week we provide ways a business can overcome the most common sustainability challenges. This post explores the first five hurdles and is part one of two.
1. There are too many metrics that claim to measure sustainability—and they’re too confusing.
Less is more. Start with a few metrics. The most common metrics revolve around areas that affect the environment, because they are the easiest to measure – such as electricity, gas, water consumption, solid waste disposal (landfill). The Triple Bottom Line (TBL) is measured in company specific ways as to the metric of “Profit”, “People”, and “Planet”.
2. Government policies need to incent outcomes and be more clearly connected to sustainability.
Currently, there is a tremendous amount of confusion on what type of “green” incentives are available from the government. The political landscape, with the 2012 election, has a created a great deal of intrigue as to what incentives, and even government/business collaboration will occur.
3. Consumers do not consistently factor sustainability into their purchase decisions.
We constantly trade off different types of impacts (social, environmental, or economic) at different levels (personal, communal, or societal) over different time periods (now or later). In the words of one manager: “Many people demand cleaner energy but refuse, for example, to allow windmills in their community. Helping consumers make informed tradeoffs when it comes to sustainability is key. However, with the economic pressures that consumers are experiencing, sustainability purchase decisions normally rank behind economic reality”.
4. Companies do not know how best to motivate employees to undertake sustainability initiatives.
Survey research shows employees would rather work for sustainable firms—and some would even forego higher earnings to do so. Firms must better leverage this knowledge to attract and retain the best employees. To do this, sustainability managers want to know which employee incentive plans are most valued, and therefore likely to be effective. The easiest and most successful way to engage employees is to include them in the development of your sustainability program. Employees who currently live a more sustainable life and find that of interest will be eager to help and will have numerous ideas.
5. Sustainability still does not fit neatly into the business case.
Sustainability managers want to know exactly how returns on sustainability investments can be measured and seen. What are the short-term and long-term ways to assess and justify these investments? How can sustainability executives demonstrate the value of sustainability within the decision-making language and framework of finance executives? Until sustainability becomes accepted as a legitimate – and value-creating – activity, it may lose out to projects that are more easily understood and evaluated. It has historically been fit into the business case by what is the “risk” of not being sustainable? What does it mean to your customer if sustainability is not one of your core values and corporate activities?
Stayed tuned for next week when we explore overcoming the other five hurdles!