Sustainability strategising is all very well, but it needs to be properly focused, argues Peter Knight
If the economy smiles kindly on America this year, expect a rash of sustainability strategies as more companies engage with the issue.
A so-called sustainability strategy could be as follows.
- An operational strategy that ensures your business contributes to sustainable development. This should be the real thing.
- A marketing strategy to communicate your sustainability efforts to a mass audience. Slogans are important here, like Ecomagination and Smarter Planet.
- A stakeholder communications strategy – a plan to ensure influencers (eg NGOs, investors, raters/rankers, policymakers) are well informed about your sustainability efforts.
- A sustainability reporting strategy – a plan that defines how, and how thoroughly, you report on your sustainability performance.
- None of the above, but merely a list of vague sustainability promises branded as a strategy.
When talking strategy it pays to be clear what you mean by the word. For clarity, a strategy contains three essential and related elements, the Triple A: analysis, approach and action.
Analysis –A strategy tackles a problem. For example, how do you counter-attack an approaching army? How do we revise insurance algorithms to accommodate climate change? How do we expand without decoupling growth from the negative impact on the planet?
These are very big problems. That’s why the first step in developing a strategy is deep analysis that deconstructs the problem and provides a diagnosis. Only when you know the extent of the problem can you can work out what needs to be done (your actions) to find a solution.
Approach – Before you make your action list, you need to decide on how you will approach the necessary actions. This is your style, your attitude, your principles that will govern the way you implement your actions.
Defining your approach is important because it helps you implement the actions, especially when things get rough. For example, your diagnosis could be that you are losing market share because you have the wrong product lines to meet changes brought on by, say, rising energy costs. This could mean that certain lines will have to be dropped, and with them go jobs. Your approach – your principles – will define how you deal with those job losses, and will help you remain resolute in implementing your planned actions.
Action –Only after you have completed your analysis, diagnosed the problem and agreed on your approach do you create your actions. This is when you set your long-term goals, short-term targets and plans to create the change that is needed. So many “strategies” are simply arbitrary lists of actions without the context of the analysis and diagnosis.
A true sustainability strategy will be difficult to differentiate from a good business strategy. For example, DuPont and Dow see the demands of sustainability shaping their markets and determining their product offerings. Unilever’s Sustainable Living Plan goes to the heart of its business and diagnoses the problem as one where the company cannot grow unless it tackles the negative impact of ever-increasing consumption.
GE’s Ecomagination, while highly imaginative and effective, is more of a marketing umbrella than a true strategy. Ecomagination – as with IBM’s Smarter Planet – successfully tackles the problem of market perception by bundling related product lines under a snappy brand. But there is no strategy to deal with the intractable problems of adapting the company to a sustainable path. This in no way diminishes the value of a branded bundle – it creates market buzz and focus – but it would be wrong to pass these marketing ideas off as sustainability strategies.
US companies – even during the recession – have made great strides in recognising the business importance of sustainability. Steadily increasing numbers of significant companies are now world-class sustainability reporters and are starting to make a bigger play in their marketing communications about sustainability.
It is looking likely that the US economy will actually grow a little this year as consumers regain confidence, unemployment drops and we start a slow journey to better times. With the American natural bent to big things up, we could see a rash of sustainability “strategies” launched in the coming months.
But it likely that most of these “strategies” will be little more than marketing feel-good concepts: slogans for a better world. Let’s hope for more than that.
May 2013, London
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