12/25/2023 0 Comments Storm it keep on rising blues song![]() This means that for many older organizations, putting sustainability at the heart of their purpose requires a deep cultural transformation. There are very few exceptions to this (e.g., Patagonia, the outdoor clothing company founded in 1973). ![]() If procedures, rules, and metrics remain anchored to traditional thinking, sustainability initiatives will be neutralized by corporate bureaucracy, despite the good intentions of senior leaders.Įven when there are metrics, they are fragmented, inconsistent, and lack a common standard.įor example, ESG reports are often made up of inaccurate, unverifiable, and contradictory data, without the accounting rigor of conventional financial metrics.Įstablished firms, founded in the 20th century, were simply not designed for sustainability, and consequently they have not developed a culture of sustainability. Price, costs, profits, market shares, and earning per shares were the most common criteria used to run a business. People and planet were not even on the radar when evaluating choices and trade-offs. Procedures and criteria for decisions were designed in a pre-sustainability era where profit was all that mattered. In most cases, sustainability is not embedded into business processes by design. The same misperception is evident at the board level, where there is little familiarity with the strategic dimensions of sustainability. It is not surprising that managers have often seen sustainability as a nice-to-have or a marketing lever, rather than a key driver for margins and sales. This segregation, still in place in most companies, makes it difficult for sustainability to percolate throughout the whole organization. The result is that it is siloed away from other key corporate functions like strategy and innovation and distant from business lines and operations. Since its first appearance in the business lexicon, sustainability has tended to be cornered and corralled into ad hoc departments. Hidden enemy #1: Structure and governance These are the “hidden enemies” of sustainability: So, what makes sustainability at scale difficult to achieve? Without scale, long-term goals are simply not attainable - or are delayed for years, which reduces credibility and increases external pressure from customers and other stakeholders. The development and implementation of sustainability programs across different sectors get stuck and are unable to scale. The bad news is that there is still a huge gap between ambition and action. In response, pressed by investors, employees, activists, and consumers, companies are launching sustainability initiatives at an unprecedented pace.Īfter many years of scepticism and lack of commitment, companies have finally begun taking sustainability seriously, setting ambitious goals and targets. The combination of accelerating climate change, rising income inequality, the Covid pandemic, and geopolitical conflicts have created a perfect storm of challenges to how businesses and economies are run.
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