Does sustainability have a prioritisation problem?

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Shines a light

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.

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Responsibility vs Commerciality

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Meeting regulations vs Acting voluntarily

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Acting now vs Acting later

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What we say vs What we mean

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Theory vs Strategy

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On paper vs In action

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.

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.

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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.

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of CEOs are seeing sustainability locked in a battle with growth

Responsibility vs Commerciality Source

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There’s a fine line between planet and profit

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 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.

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 barriers to sustainability planning, there’s a perception that it will be expensive – some companies still don’t understand the ROI beyond meeting mandatory targets. In fact, not only is there a strong financial case, but also several other benefits including keeping clients and employees happy.

Benjamin Camus

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Since 2015 fossil fuels received

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£20bn more UK support than renewables

Meeting regulations vs Acting voluntarily 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 business waiting for local or international regulations to start their sustainability transformation is to just stop waiting. Set aside the country and international politics at play. Sustainability regulations will affect you, in whatever form they land, they are complex and multi-faceted, so getting your strategies in place and your data ready today will only hold you in good stead.

Laura Millar

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72

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Acting now vs Acting later

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

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up from 65% in 2022

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Where to begin

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.

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.

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 4

Developed LEVEL 3

Proactive LEVEL 2

LEVEL 1

Inactive

Understanding of social and environmental impacts of business is limited

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.

Reactive

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

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 in the past 10 years - it’s not all doom and gloom when it comes to businesses tackling sustainability. Most businesses are making changes towards being more sustainable. With that said, it can be tough to know where to go next and when it’s tough to know where to go, it can sometimes be easier to save the perceived difficult task for later.

Catherine Dineley

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78%

of people are familiar with the term sustainability

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could identify a sustainable product

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could name a sustainable company

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What we say vs What we mean Source

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Please mind the knowledge gap

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 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.

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 the knowledge to make conscious decisions and fundamentally change behaviour to make activation work.

It’s not about being a sustainability expert.

It’s about putting a stake in the ground and saying it’s everybody’s challenge and we all need to be part of the solution.

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Using the triple bottom line approach

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.

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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: 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.

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

HR & Culture

• Brand Architecture

• Recruitment & Retention

• Brand Narrative

• Employee Life cycle

• Visual Identity

• People Strategy

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

Sustainability Strategy

• D&I Strategy

Operations • Performance & Metrics • Processes • Systems

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

Theory vs Strategy 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 survives is one that provides more than the day-to-day. The organisations that show the greatest level of commitment and, indeed, commercial success are not the greenwashers, but those who choose sustainability for the right reasons and activate their plan in the right way for them.

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90

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of executives think sustainability’s important but only

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of companies have incorporated sustainability into their business model

On paper vs In action 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.

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.

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.

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.

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 parts of activating a sustainability plan is finding a meaningful connection. When you make a problem more human, suddenly people are part of the solution and the other barriers seem more manageable – but this takes effort.

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So let’s do business, better

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.

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

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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