3 hidden mistakes companies make along their sustainability journey

Sustainability is undoubtedly one of the hottest topics in business today – but it is not just a passing trend. It is already immensely changing society and the way we operate companies, and it's here to stay for the foreseeable future. Organizations worldwide, especially in Europe, are facing enormous pressure from customers, regulators, investors, employees and the public to make significant strides in sustainability and demonstrate concrete commitments for the years ahead. However, the complexity of the sustainability landscape makes it challenging for businesses to know how to navigate this journey effectively and without mistakes.

Many articles have already delved into this subject, addressing high-level issues from lack of investments and top management commitment to complex stakeholder management and the risk of greenwashing. As my social media monkey wouldn’t stop tapping on my shoulders, I also felt the indomitable urge to write my perspective on the topic.

The experiences I gained as a consultant, working on sustainability topics across various industries, convinced me that there is at least increased awareness on these high-level aspects; nevertheless, many organizations are still struggling to get their sustainable transformation right. Below, I mention what I believe are three common “hidden” mistakes companies should pay attention to along their sustainability journey.

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1) Seeing sustainability only as a risk management and compliance issue instead of a business opportunity

?? Sustainability is not merely about checking boxes to comply with regulations or limit reputational damages. Instead, it can provide significant added value to both the top and bottom line. Companies that adopt more proactive and daring approaches to sustainability discover new revenue streams, cost-saving opportunities, a strengthened USP and further intangible benefits. Sustainability should be treated as an integral part of strategy, portfolio and operations discussions, bundling its benefits with existing long-term organizational goals and not just to answer the “latest complex EU directive”. At the end of the day, only sustainable businesses can create long-term value and profitability.

The matrix below provides some concrete examples of how companies could assess their current portfolio to discover new sustainability-related business opportunities.

2) Wanting to do it all and as quickly as possible

?? Impatience can be detrimental to sustainability. The complexity and urgency of the topic is overwhelming, leading some companies to rush to create a sustainability report with numerous targets and elaborated roadmaps, trying to encompass it all with colorful radars and a lot of promises but little substance. This leads to an ineffective spread of resources and internal and external loss of credibility.

Instead, it's crucial to first ensure proper transparency through clean baseline data, as automated as possible, and then to pick a few well-considered areas to focus on with concrete backed-up ambitions. Gaining trustable quick wins and making progress in manageable steps will help build momentum and gain the necessary trust and traction to tackle bigger and more significant sustainability challenges down the road, at a later stage.

For example, many companies early on focus on reducing CO2 emissions. While this might look easy and more quickly done for Scope 1 and 2, the real complexity lies for many industries in Scope 3 and the supply chain. Claiming here ambitions and targets too early, without having a full grasp of the issue and trustable baseline data, might result in dangerous backlash later on, once the reality of the numbers kicks in.

3) Seeing the Chief Sustainability Officer (CSO) as a static and lone hero

?? Companies sometimes place too much responsibility and ownership on the central figure of a CSO, accompanied by sizeable corporate sustainability departments. Ironically enough, I believe the ultimate job of CSOs should be to work themselves out of the job. While it might sound extreme, sustainability must be so embedded into the daily business that a dedicated central department is almost not needed any more.

Sustainability should be driven by the business and permeate every organizational aspect, from strategy development to different operational processes, from the calculation of business cases to being part of executive’s compensation - until a full transition from a sustainability strategy to a sustainable strategy, as Paul Polman advocates, happens.

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I hope these insights provided additional perspectives or sparks for reflection on your own sustainability journey. What are your thoughts, have you had different experiences? What do you believe the most critical aspect is?

Let's continue the conversation on how we can collectively make a difference for a more sustainable business world.