The dirty little secret of sustainability goals
By Mike Stopka
When the CEO of Rolls Royce recently singled out aviation companies for failing to meet climate targets, the comment hardly raised eyebrows at the London conference where he spoke. Nor did a new report on executive pay revealing the worst carbon emitters don’t even incentivize their CEOs for climate performance. And the growing horde of companies issuing SLBs, or sustainability-linked bonds, tie them to climate goals that are “weak, irrelevant, or even already achieved,” an analysis showed this week.
The fact is, the world’s companies are increasingly declaring sustainability goals—from ESG (environmental, social, and governance) pledges to climate to social impact—but they’re not on track to achieve them or their executives believe they won’t. On top of that, countries meeting for COP27, the U.N. Climate Change Conference in Egypt, are accused of undermining the Paris Agreement just seven years after they signed it.
Goals matter, but only if they enable actual change. Why is this so difficult?
One reason is the bad actor companies who greenwash and report false or misleading progress. Some large companies want to be good actors and achieve ambitious sustainability goals, but they are struggling. Based on my experience working with 50-plus companies over the last 15 years, many of them Fortune 500, a few lessons have emerged that can help organizations succeed. Most importantly, the gap between intending to achieve goals and actually doing so often arises because big companies fail to take the requisite step of identifying the barriers in their way.
These barriers vary widely from technology limitations to lack of sustainability experience on the team to ineffective oversight. For example, a company may want to be zero waste, but isn’t getting it done. Instead of identifying the root cause—which might be a lack of communication, the wrong physical infrastructure, or overburdened staff members who don’t have the headspace to think about zero waste—the company jumps straight to ordering new bins, creating signs, or calling new waste haulers, usually in a well-meaning but nonstrategic shotgun approach. They’re hoping for the best, but it’s like driving without directions and expecting you’ll still arrive at your destination without wasting gas.
Even the biggest corporations don’t have unlimited budgets, and the planet doesn’t have time to wait, so this doesn’t work.
Successful companies, on the other hand, take an essentialist approach, first screening for and pinpointing the root causes of stalled progress. It takes effort and persistence to first do this work of uncovering barriers, but it allows companies to laser-focus the necessary skills and resources on the true causes of unfulfilled aims. These steps are hardly novel and may seem essential to good organizational management. But having seen the lack of this approach across dozens of big companies, evidence suggests a reminder may be useful.
For example, if you had a renewable energy goal and knew your barrier was a lack of knowledge on the staff, you’d approach that differently than if it were a lack of accurate energy use data. The former suggests engaging an energy knowledge expert and the latter suggests infrastructure and data tracking software.
In many cases, companies leave underresourced teams without effective ways to direct their limited means. They get spread too thin, waste money and time, or, worse, solve for the wrong issue altogether. But how do we identify the biggest barrier so we know where to focus?
Experience reveals seven organization-wide barriers, or root causes, that consistently block company attainment of environmental and social sustainability goals: 1) Lack of accountability structure; 2) Lack of clarity on what sustainability success looks like and how it’s connected to company purpose; 3) Lack of understanding of current sustainability performance; 4) Lack of sustainability experience and education; 5) Inability to deviate from business as usual (to a less certain, but more sustainable, path); 6) Inability to translate strategy into tactical action; 7) Inability to communicate the business value of sustainability.
Until companies identify the barrier that’s keeping them from achieving their sustainability goals, they won’t be able to deploy targeted solutions and make meaningful progress.
One global technology company, for example, had 25 separate sustainability initiatives, many of which were unintentionally duplicative and conflicting, occurring at once. This translated to the equivalent of seven full-time employees each squandering 40 hours per work on ineffective sustainability projects, costing hundreds of thousands of dollars in salaries each year and a lack of progress on publicly set goals. A vicious cycle resulted: The lack of progress led to leadership frustration, increased difficulty securing resources, stifling progress, and wasting time—all leading to missed goals.
In this case, the barrier was the first of the seven: a lack of accountability structure. This company needed stronger leadership in place to oversee all the projects underway in order to spot the ineffective and duplicate efforts.
Taking a barriers-first approach clarified the need, allowing company leaders to set a reporting structure and accountability expectations that eliminated wasted employee time, added costs, and redundant or ineffective initiatives. For any company feeling stuck trying to close the intention-achievement gap for sustainability or emissions, the barriers-first focus offers a way to get free.
Mike Stopka is a principal at Buro Happold, leading strategic sustainability consulting to help companies around the world close the gap between intention (goals) and achievement (impact).
Kirsten Melling, Isabelle Kavanaugh, Kathleen Hetrick, and Isaac Smith, all of Buro Happold, also contributed to this article.
(29)
