Can Net-Zero learn from Zero-Harm transformation programs to push to the finishing line?

#Net-Zero; #Zero Harm; #Organisational Change; #Transformation; #Decarbonisation; Hard to Abate; #Sustainable Supply Chains; #Climate Change.

Premise

Is it possible that the Net-Zero movement can learn from the Zero Harm agenda that led to new innovations to address the stubborn “last mile” of challenges on the road to zero?

Sustainability’s “zero moment”

For many years sustainability operated on a “things can only get better” basis whereby if this year’s carbon footprint was lower than last year’s then things were improving and stakeholders had something to read about in the sustainability report. Progressively the ratchet of regulations, customer demands and stakeholder expectations has been turning up the heat, leading to science base targets and an expectation of road-maps to Net-Zero by 2050 as a license to operate.

More recently it is becoming clear that many organisations, indeed many entire industries and many countries are falling woefully short of their ability to actually deliver on the milestones and road-maps towards these new more challenging goals.

In the face of this exposure many organisations are feeling the need to "stress test" their net-zero plans or even in some case radically overhaul them if the operational assumptions underpinning them, for example about contributions of specific technologies, innovations and investments are simply not feasible in practice.

This convergence of increasingly high stakes public commitments and significant consequence for leaders is in many ways reminiscent of the zero harm movement in health and safety and more widely of the challenges encountered in operational risk management.

Zero harm – a potential inspirational model?

It’s a well-established leadership principle that organisational health and safety should be founded on a zero harm principle regarding its employees and often extending into sub-contractors and suppliers: The zero harm concept | IOSH magazine. How could it be otherwise since which executive would be willing to stand up and say we only killed or harmed this number of people this year and statistically speaking that’s not bad for our industry.

Leaders were clear and committed to zero harm but unclear how to get it done in practice in the face of persistent and stubborn “tail risks”. What followed from that commitment was then a realisation that the 80 20 principle of generic best practices will only take you so far and that the “last mile” of getting to zero harm required some form of organisational transformation approach to reach he finishing line.

Operational risk and safety management therefore offers a potential inspiration for sustainability’s own “path to zero” goals on many levels. Like most change management to be successful it must operate at multiple levels: leadership and integration with operations; clarity of business case to ensure resourcing; a project management drive; and embedding in a deep safety culture; and alignment of internal and external stakeholders.

Below are a few thoughts on best practices in each of these areas which might merit further investigation as transferable tactics from operational risk management and the zero harm paradigm to sustainability’s net-zero challenge:

1 Operational Leadership

Having a Chief Operating Officer on board with your Operational Risk Management and zero harm program is recognised instantly as sign of seriousness and that the program will have the priority from the executive team, the resources and the engagement to see it through.

In a similar way one might suggest that the sponsorship of the COO (or co-sponsorship in the case where there is a CSO) for an organisational sustainability program signals to the organisation that the pragmatic operating approach which be there to “translate” the goals into the necessary detailed actions on an ongoing basis across the organization.

Examples of COO’s as the ultimate point of accountability for sustainability are starting to multiply (see for example Sustainability | Croda in the UK).

2. Clarity and rigour of business cases

Sustainability has been plagued by “soft” business cases with soft language that often lacks detail and doesn’t resonate with many in the organisation who have specific functional or process expertise and responsibility to deliver challenging targets. Under sponsorship of the COO teams can be enabled to develop really pragmatic and value adding business cases for each and every component of the sustainability program.

Sustainability Officers are often the first to realise the need to expose their plans to this kind of rigour to enhance them through critical friend challenges and the normal tests of ROI. For example: if sustainable product innovation is going to deliver top line benefits then how much benefit to which brands or functions by when with what return on investment? If specific sustainability risks are identified how do they related to specific elements of the commercial operating plans and what level of mitigation can be achieved for which investment? If scope 3 emissions are to be reduced rather than have loosely conceived “collaboration initiatives” which decisions which yield which carbon reduction AND cost reduction benefits in a defined timeframe? Such clarity and sharpness of business case might seem elusive but organisations like Johnson and Johnson Global environmental sustainability (jnj.com) that invested in developing a model tailored to value creation in their organisation having been seeing the benefits for many years.

3 The creation of a Sustainability Culture

The role of organisational culture in enabling any significant change or transformation is extremely well documented https://www.hsestudyguide.com/zero-harm-culture/ . Empowerment and involvement of personnel at all levels is key and has been a principle successfully implemented in many zero harm programs with senior leaders going on seeing is believing walkabouts, empowering colleagues to cease work if they suspect conditions are unsafe and recognising and rewarding the right behaviours that contribute to avoidance of harm.

More widely the role of culture in driving organisational change is also very well studied: Changing Employee Behavior - Increase organizational performance (imd.org)

In a similar way leaders need to ask what does a sustainability culture look like? The Eight primary responsibilities of CSO’s have been documented The 8 Responsibilities of Chief Sustainability Officers (hbr.org) and clearly include creating a: Fostering Cultural Change AND Embedding Sustainability into processes and decision making:

If product designers have the tools to choose materials and designs with lower impacts are they also empowered and enabled to have those discussions with their counterparts in brand management to explore options for brand innovation?

When procurement professionals are targeted to reduce costs in every category are they equipped with actionable insights on carbon emissions per supplier to make bold decisions and create synergies which reduce both costs and emissions for the organisation? Again the link to leadership is clear as leaders create the culture and the connected dialogues across functional teams to ensure results are delivered.

4 Project management office to driven progress and accountability

Organisations resist change and dedicated effort is needed to facilitate and accelerate it. The role of the Project Management Office often with a blend of internal colleagues and external facilitators is also well established in operational risk management. In contrast sustainability programs have rarely been enabled or exposed to such decisive implementation mechanism. Now that many executive teams this impending dilemma of rising costs over questionable value it will be interesting to how many are motivated to grasp the nettle in a decisive manner and bring in the PMO to accelerate what could otherwise be a very lagging performance on key initiatives like net-zero carbon emissions. If fixed costs are also under scrutiny then a PMO can offer a mechanism for a concentrated focus of resources to gain momentum without adding headcount when the actual future state operating teams may be quite different in scale and capabilities.

The Association for Project Management recognised the importance of project management in achieving net zero in a recent publication: Are we ready for net zero in project management? (apm.org.uk) and once again leading a Project Management Office whether staffed by in house personnel or trusted advisors or a blended team features in the top 8 responsibilities of the CSO The 8 Responsibilities of Chief Sustainability Officers (hbr.org)

5.? Aligning internal change with external stakeholder management

Finally many executives fear to expose themselves to first mover disadvantage when leading internal change programs. Many vividly recall the Harvard Business Review cover title of Paul Polman’s leadership under the headline of a “… big gamble”Captain Planet (hbr.org). So if changing a major public organisation already seems challenging then it might seem paradoxical to pursue an apparently even greater challenge of changing an entire industry.

However there is some significant precedent for leading – safely from the front from within industry initiatives as well as initiating ones own internal change. ?This requires moving from stakeholder management to stakeholder influence including those stakeholder external to the organisation that shape its operating environment.

Internal change at scale must operate within a reasonable known external framework – with such dynamic and uncertain change in the external environment – the so called VUCA world – such frames are hard to come by unless of course you are one of the players influencing those frameworks – standards legalisation and industry movements all begin with vision and that vision while it may not be as ambitions are your own program can provide the current that elevates the whole industry and stakeholders creating the platform for success for your own transformation while de-risking its returns via shaping the operating environment.

Over the last two decades I have noted a significant correlation between those leaders able to shape their external environment and those with confidence to execute significant internal change programs by anticipating the external change. Again industry wide initiatives on health and safety have a role to play as a precedent but in fact in this case sustainability may even be ahead of the curve in providing a model for embedding internal change by influencing a more favourable external context.

Examples like ArcelorMittal’s chairmanship of Responsible steel ResponsibleSteel? | ArcelorMittalin its early days provide an inspiration and more recently innovators like Lightsource BP and Aquila Capital providing momentum alongside a group of their peers to the relatively new Solar Stewardship Initiative Solar Stewardship Initiative . Equally functional mission driven work like the sustainable procurement pledge About - The Sustainable Procurement Pledge (spp.earth)have a tremendous reflected benefit for founders Bayer and Hempel by showing their commitment to cross-industry mission of huge proportions.

Where next?

More and more organisation are looking into the potential of organisational transformation for sustainability programs as leaders seek new ways to ensure commitment to Net-Zero that brings value not just cost and risk management. It’s interesting to see well recognised analysts looking into the overlap between EHS and ESG The Role Of EHS In Executing And Supporting ESG Strategies (verdantix.com) and hopefully this blog will spark more interest into this line of practice. What do you think? Can Net-Zero learn from Zero harm transformation tactics or other successful change models?

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