Does sustainability have a prioritisation problem? by SixAgencyUK

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Does sustainability have a prioritisation problem?

six.agency

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In this guide We explore why sustainability has a prioritisation problem and suggest how you can supercharge sustainability in your business. We’ll also hear from our in-house sustainability expert Laura Millar and co-collaborators Catherine Dineley and Benjamin Camus.

Contents 01

Responsibility vs Commerciality

Meeting regulations vs Acting voluntarily

Acting now vs Acting later

What we say vs What we mean

Theory vs Strategy

On paper vs In action

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Our experts Laura Millar

Senior Sustainability Strategist Six Laura is our Senior Sustainability Strategist, bringing a wealth of experience with business and branding together with a passion for – and history in – climate change science and policy. She believes deeply in the reconciliation of environmental sustainability, social justice and economic viability on the road to net zero.

Benjamin Camus

Director of Corporate Environmental Solutions at Evolution Markets Having worked across the sustainability and carbon industry space for eight years, Benjamin directs a global team of climate experts and provides a breadth of services and market-based solutions. Benjamin has been involved in several carbon project developments and investments in Latin America and Africa, as well as supporting international companies to define their internal carbon strategies and Net Zero objectives.

Catherine Dineley

Head of Group Culture at Lloyds Banking Group Catherine has worked across the area of organisational culture, in the Oil & Gas sector and more recently in Financial Services. Catherine’s expertise is in designing and delivering cultural change and transformation grounded in behavioural change. Recently, leading an award-winning programme to restate Lloyds Banking Group’s values, with one specifically focussed on sustainability.

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Sustainability means business In 2015, the United Nations created the Sustainable Development Goals (SDG). They are a set of 17 interlinked goals that must be achieved by 2030 if we’re all going to make meaningful progress towards a better and more sustainable future. The goals cover a broad range of environmental, social, and economic development criteria including poverty, hunger, health, education, climate change, gender equality, water, sanitation, energy, urbanisation, environment, and social justice.

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The hope was that companies would integrate the SDGs into their strategies, operations, and reporting to address global challenges, drive innovation, and enhance sustainability. While, of course, realising the economic benefits and strengthening their P&Ls. But in reality, businesses (and governments, for that matter) are missing their sustainability targets at a worrying rate. The Intergovernmental Panel on Climate Change (IPCC) tell us that the time to act on climate change is now. Their assessments, which cover the past 36 years, show that immediate and significant action is required to reduce greenhouse gas emissions and mitigate climate change impacts. The longer we wait, the higher the risk of severe and irreversible impacts on people and ecosystems.

37% of the Sustainable Development Goals are severely off track or are regressing with only 15% of targets on track to be met by 2030 Source

Despite this, sustainability efforts have slipped down the list of priorities for businesses, according to a new global study of c-suite executives. Sustainability efforts have gone from being the number one priority in recent years to being third in 2023. And many of the business leaders claim, ‘they are being pressured by ‘external parties’ to de-prioritise sustainability.’

So, let’s look at why.

Responsibility vs Commerciality

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of CEOs are seeing sustainability locked in a battle with growth

Source

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There’s a fine line between planet and profit There’s a common misperception that transitioning to a sustainable business model is expensive and may not offer immediate or clear return on investment (ROI). This belief is often rooted in the upfront costs associated with implementing sustainable practices, such as investing in renewable energy, eco-friendly materials, and sustainable supply chains. Here we see the conflict between responsibility and commerciality.

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If you look at the stats, however, you can see that investing in sustainable transformation drives:

Top-line growth 70% of customers, across industries including construction, engineering, automotive, and services, say they would pay an additional 5% for green products that meet the same performance standards.

Drives operational efficiencies 88% of companies with good sustainability practice find better operational performance.

Fosters innovation Since 2013 GE has reduced GHG emissions by 32$ and water by 45% and this has resulted in $300 million saving.

Enhances internal culture Moral was found to be 55% better in companies with strong sustainability programs, compared to those with bad ones.

Overall research shows that companies that focus on sustainability achieve better growth and profitability than their peers, and exceed them in shareholder returns.

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When it comes to barr planning, there’s a pe will be expensive – so don’t understand the mandatory targets. In is there a strong fin also several other b keeping clients and

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riers to sustainability erception that it ome companies still ROI beyond meeting n fact, not only nancial case, but benefits including d employees happy.

Benjamin Camus

Meeting regulations vs Acting voluntarily

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Since 2015 fossil fuels received

£20bn more UK support than renewables

Source

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Navigating the chaos The spotlight on fossil fuel subsidies is creating confusion for businesses aiming to become more sustainable. These subsidies lower the cost of fossil fuel energy which sends mixed signals about the actual economic and environmental costs of these energy sources. This makes it difficult for businesses to assess the true value and ROI of transitioning to renewable energies. As a result, businesses often struggle to justify the financial aspect of their green initiatives.

And it doesn’t stop there.

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Businesses are also faced with a complex network of policies and frameworks which are costly to navigate and difficult to comply with, particularly for smaller businesses. And even when they do manage to decipher them, these regulatory frameworks aren’t evolving quickly enough to accommodate or encourage new sustainable technologies and practices. There are also inconsistencies in regulations across different regions and countries. Businesses with a global presence must adapt to varying standards and requirements, making it harder to implement uniform sustainability initiatives.

It’s not all doom and gloom Despite the current chaos, sustainability regulations and policies are set to improve. Governments are increasingly issuing regulations, guidance, and incentives related to sustainability. Mandatory climate disclosures have become a key focus, with organisations required to share climate-related information, such as greenhouse gas (GHG) emissions. This aligns with frameworks like the Task Force on Climate-Related Financial Disclosures (TCFD). And independent assurances, like The EU’s Corporate Sustainability Reporting Directive (CSRD), are on the horizon.

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My advice for any busine or international regulatio sustainability transforma waiting. Set aside the coun politics at play. Sustainabili you, in whatever form they l multi-faceted, so getting yo your data ready today will o

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ess waiting for local ons to start their ation is to just stop ntry and international ity regulations will affect land, they are complex and our strategies in place and only hold you in good stead.

Laura Millar

Acting now vs Acting later

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of CEOs* claimed they wanted to advance sustainability initiatives but didn’t know how

up from 65% in 2022

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Where to begin There’s a common narrative in the sustainability industry that businesses are either sustainable, or they’re not. But, in reality, it isn’t that black and white. Every business is on a journey of growing awareness and compliance, which can be mapped against the business sustainability maturity curve.

LEVEL 2

LEVEL 1

Inactive

Understanding of social and environmental impacts of business is limited

Reactive

Awareness of issues is driven by outside parties or uncoordinated internal groups

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At the beginning, businesses start to implement basic sustainability practices, often driven by internal or external expectations. The next stages involve strategic integration, where sustainability becomes a key part of business strategy, and innovation, where companies actively pursue sustainable solutions and business models.

A better appreciation of the sustainability maturity curve will help businesses at all levels to progress and, crucially, know what they need to aim for next.

The final stage is transformative, where sustainability is deeply embedded in all aspects of a business, driving both operational and cultural change. These businesses are often leading the way in sustainable practices within their industry.

LEVEL 4

Developed LEVEL 3

Proactive

Sustainability impacts are understood and key issues relevant to business have been identified

Goals and relevant programs structure sustainability efforts

LEVEL 5

Integrated

Core business strategies address sustainability issues

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We’ve come a long way - it’s not all doom and g to businesses tackling businesses are makin being more sustainab can be tough to know w when it’s tough to know sometimes be easier to difficult task for later.

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y in the past 10 years gloom when it comes sustainability. Most ng changes towards ble. With that said, it where to go next and w where to go, it can o save the perceived

Catherine Dineley

What we say vs What we mean

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78%

of people are familiar with the term sustainability

22%

could identify a sustainable product

15%

could name a sustainable company

Source

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Please mind the knowledge gap Not everyone has the same level of knowledge or awareness when it comes to environmental, social, and economic sustainability. This is also known as the sustainability knowledge gap, and it exists at various levels.

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On an individual level A person’s knowledge or awareness of sustainability concepts can influence their individual behaviours, such as consumption patterns and lifestyle choices.

At an organisational level Businesses with a well-developed sustainability strategy can often use it to help drive innovation, improve efficiency, and enhance their brand reputation.

At a societal level A society or region’s level of awareness can affect policy development, public discourse, and collective actions related to sustainability.

At a global level Resources and infrastructure play a huge role in how different countries and regions are positioned to address sustainability challenges.

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You need to give people make conscious decisio change behaviour to ma It’s not about being a su It’s about putting a st and saying it’s everyb and we all need to be

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e the knowledge to ons and fundamentally ake activation work. ustainability expert. take in the ground body’s challenge e part of the solution.

Catherine Dineley

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Using the triple bottom line approach There’s a common misunderstanding that sustainability is only an environmental concern. But it’s not. Sustainability includes social and economic dimensions, such as workforce practices, community engagement, and long-term economic viability.

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So often we see sustainability strategies which are disconnected from what other parts of the business are doing. And this disconnect can lead to conflicting strategies, a lack of authenticity and, in extreme cases, accusations of greenwashing. To avoid this, we recommend talking about sustainability from a triple bottom line approach, which extends beyond financial profits and includes social and environmental concerns.

The triple bottom line approach is more than just a business model, it’s a mindset shift. This holistic perspective helps businesses not only drive financial success, but also contribute positively to society and the environment.

There are three key aspects: Profit Economic viability and profitability

People Social responsibility towards employees, customers, and communities

Planet Environmental stewardship and sustainable practices

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A holistic approach

Brand • Brand Architecture • Brand Narrative • Visual Identity

Business Strategy • Sales & Marketing • Product & Portfolio • Growth

Sustain Strat

nability tegy

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HR & Culture • Recruitment & Retention • Employee Life cycle • People Strategy • D&I Strategy

Operations • Performance & Metrics • Processes • Systems

Theory vs Strategy

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of employees are unsure who’s in charge of managing sustainability in their organisation

Source

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So who’s responsible for sustainability? From operations and finance to marketing and human resources, sustainability impacts every area of a business. And while this cross-functional nature can help with sharing the load, it can also lead to confusion about ownership. This is why every business needs a well-developed sustainability strategy which helps everyone understand their role and responsibilities.

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Here are three steps to help you create a sustainability strategy, or track the progress of an existing one.

Step 1: Commit

Step 2: Measure

Securing a commitment from your leadership team helps ensure sustainability can become a core value within your company’s ethos. This involves defining a clear sustainability vision that aligns with the company’s overall goals and values. It’s essential this commitment is genuine and works at all levels of your organisation.

Assess your company’s current environmental footprint and social responsibility by conducting a sustainability audit. At this stage it also helps to conduct a materiality analysis to help you understand and prioritise the social, environmental and governance factors that are most important to your business and the people it impacts.

Step 3: Plan Based on the insights gained from the measurement phase, you need to develop specific and measurable sustainability objectives. You can then create a plan of action which details the steps needed to achieve these objectives, including resource allocation and setting timelines.

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A business that surviv provides more than th organisations that show commitment and, indee are not the greenwashe choose sustainability fo activate their plan in the

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ves is one that he day-to-day. The w the greatest level of ed, commercial success ers, but those who or the right reasons and e right way for them.

Benjamin Camus

On paper vs In action

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of executives think sustainability’s important but only

of companies have incorporated sustainability into their business model

Source

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...but can you walk the walk? Another gap at play in sustainability is the knowing vs doing gap. This gap refers to the discrepancy between a company’s awareness of sustainable practices and its actual implementation of these strategies. As we’ve discussed already, while businesses often recognise the importance of sustainability, translating this into concrete actions is a whole other story.

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Here are some factors that contribute to this gap:

No clear implementation guidelines Sustainable practices feel too complicated Prioritising short-term profits over long-term sustainability goals Resource constraints, such as finances and time

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We believe that for any meaningful action to occur it’s crucial to integrate and activate your sustainability strategy across your business in these four workstreams.

Brand and communications Embedding sustainability into your brand identity and communications is essential. This involves clearly articulating your sustainability commitments and achievements in your marketing materials, public relations efforts, and stakeholder communications. It’s about telling a compelling sustainability story that resonates with your audience and reflects your brand’s values.

Operations Implementing sustainability in day-to-day operations is critical. This includes adopting energyefficient processes, reducing waste, sourcing materials responsibly, and optimising supply chains. Operational changes should align with the sustainability strategy’s goals, and there should be mechanisms to measure and evaluate the impact of these changes.

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Culture and change management For the strategy to be effective, it must be ingrained in the company culture. This involves educating and engaging employees at all levels about the sustainability goals and practices, and encouraging sustainable behaviours. Change management initiatives, such as workshops, training sessions, and employee incentives, can help foster a culture that supports and advocates for sustainability.

Technology Leverage technology to support your sustainability efforts. This could involve using data analytics to track resource usage, implementing software for better waste management, or investing in new technologies that reduce environmental impact. Technology can be a powerful tool for monitoring, managing, and reporting on sustainability performance.

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One of the hardest pa sustainability plan is connection. When you more human, suddenly solution and the other b manageable – but this

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arts of activating a finding a meaningful u make a problem people are part of the barriers seem more s takes effort.

Catherine Dineley

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So let’s do business, better

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Every organisation must play its part in tackling climate change. Not just because it’s the right thing to do, but because it makes commercial sense to do so. From profitability to helping build authentic, meaningful connections with customers and employees, sustainability is a powerful tool for businesses around the world.

But you don’t have to do it on your own. Our team of strategists, creatives and technologists take a human-centred approach to mobilising businesses’ sustainability strategies. If you’re one of these businesses, don’t be afraid to push for progress. We can help you develop accessible and affordable sustainability solutions that will accelerate your journey.

of businesses are yet to take proactive steps towards becoming a sustainable business Source

Wherever you are on your sustainability journey, get in touch.

Amy Nicol

Senior Relationship Consultant

+44 (0)117 915 0066 amy.nicol@six.agency six.agency