Sustainability is here to stay…are you?

Part II of IV, following my earlier blog, “A Perfect Storm For Business: Sustainability, Human Capital Management, and Purpose.”

Got a green building? Check. Solar panels? Check. Recycling? Check. Earth Week volunteers? Check. Awesome! Do you have a sustainability strategy and annual report? Umm…

Once considered “nice to have”, sustainability has evolved beyond aspirational demonstrations and efficiency measures and is starting to influence Boardroom discussions and corporate decisions in a big way. Sustainability is a growing business strategy that addresses Environmental, Social, and Governance (ESG) issues that are material to the business and its stakeholders.

An alphabet soup of high profile organizations have made the news this year, removing any doubt that sustainability is going mainstream. From the UN to the SEC, SASB and FASB, from Blackrock to CalPERS and the DJSI, ESG strategy and disclosure are hot topics right now. Consider these recent developments:

  • An historic moment occurred on Dec 12, 2015 when The Paris Agreement was adopted by all 196 Parties to the United Nations Framework Convention on Climate Change. In the agreement, all countries agreed to work to limit global temperature rise to well below 2 degrees Celsius.
  • On Feb 1, 2016, Laurence Fink, the CEO of BlackRock, the world’s largest asset manager, sent a letter to the CEOs of S&P 500 companies stating, “Generating sustainable returns over time requires a sharper focus not only on governance, but also on environmental and social factors facing companies today. Over the long-term, environmental, social and governance (ESG) issues — ranging from climate change to diversity to board effectiveness — have real and quantifiable financial impacts.”
  • On Apr 15, 2016, the U.S. Securities and Exchange Commission (SEC) announced that it is currently reviewing its disclosure requirements for public companies, including public policy and sustainability matters — in other words, ESG disclosures.
  • On Aug 15, 2016, the Board of Administration of one of the world’s largest pension funds, the California Public Employees’ Retirement System (CalPERS), adopted the Environmental, Social, and Governance (ESG) 5-Year Strategic Plan: a six -point plan that is the next evolution of CalPERS’ work on sustainable investing and the Global Governance program.
  • Sustainability reporting is exploding. The fifth annual analysis of S&P 500 Index reporting, G&A Institute found that 81 percent of the companies included in their investment benchmark published a corporate responsibility or sustainability report in 2015. This is up from just 20 percent of companies reporting in 2011.

What is causing all of this momentum? Here are a few contributing factors:

  • The world is changing faster than ever before. Climate change, competition for finite resources, technological disruption, globalization, and shifting stakeholder expectations are disrupting traditional business management practices and theory.
  • Governments across the world are taking steps to reduce their reliance on fossil fuels while building a low-carbon economies.
  • Corporate stakeholders are increasingly paying attention to sustainability issues in their purchasing, employment, supply chain, and investment decisions.

Who is doing this well? What are some good examples to follow?

DJSI, Ceres Roadmap, and Newsweek Green Rankings are just a few places to find lists of companies at various stages of their sustainability journey as well as those that have demonstrated leadership among their peers. While many of the top performing companies are Fortune 500 companies, smaller companies like Timberland and Tom’s of Maine are also making waves and solidly investing in sustainability for the long term.

Companies that are outperforming their peers are taking a long-term view and working hard to eliminate short-termism. They recognize that sustainability is about leading a better-run forward-thinking business that demonstrates accountability, transparency, adaptability, innovation, and stakeholder inclusivity. They understand that sustainability represents a shift in mindset from generating profit for shareholders to generating value for all stakeholders. And they are being rewarded for their efforts by appealing to investors who are attracted to investments that provide lower risk and higher return while also uplifting humanity and protecting the planet.

What can you do?

Rather than wait and react to government regulations, market and stakeholder pressures, here are 10 things you can do to prepare your teams to launch and advance your sustainability journey:

  1. Initiate sustainability conversations at the top of the house (e.g. Executive and Board level discussions).
  2. Gain Management / Board-level support to launch a sustainability strategy.
  3. Perform a stakeholder materiality assessment and invite them to be a part of the journey.
  4. Set up systems to track your operational footprint and identify opportunities to reduce waste.
  5. Set goals that are material to the business and your stakeholders.
  6. Select a reporting mechanism for your annual report.
  7. Build your sustainability narrative and a roadmap for success including metrics, programs, platforms, and policies.
  8. Train leaders and managers with business sustainability acumen (e.g systems thinking, adaptability, social innovation, collaboration, mindfulness, authenticity, and transparency).
  9. Design employee engagement programs and platforms to embed sustainability into your culture (e.g. communications, feedback loops, reward and recognition, volunteerism, innovation, leadership development).
  10. Engage your stakeholders through your engaged employees.

Sustainability is here to stay…are you?

SEED Strategies can help you make sense of sustainability and build solutions that are tailored to your industry, business, employees, and stakeholders. Contact us for your free assessment.

Stay tuned for my next blog of this series on Human Capital Management and more ideas about what you can do to engage your most valuable assets – your employees!

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Strategic partnerships that do good AND make $ense

I recently read about a new first of its kind public-private partnership between Land O’ Lakes and the state of Minnesota to protect and improve water quality stewardship standards across the state. I believe this is an excellent example of a strategic partnership that not only helps the planet and strengthens the company’s stakeholder value chain but also tells a compelling story that resonates with customers (like me) and will ultimately make the company more profitable.

Here is why:

Land O’ Lakes uses water and milk in its’ products (I think we are all familiar with its’ delicious butter).  Milk comes from cows.  Cows create vast amounts of “cow patty” waste that can pollute water resources.  Cows also eat grass and grains which are often grown with fertilizer and/or pesticides which pollute water resources and can find their way into your stick of butter (through the cow).  This strategic partnership with the state of Minnesota is providing much needed financial resources to implement water quality initiatives which ultimately improve the health and wellbeing of the people and animals who depend on those water resources, including Land O’ Lakes.

The reason I love this example is because it demonstrates a company’s commitment to not only do the right thing but also invest its resources in a way that adds tremendous value to its purpose and brand.  It is a strategic win-win-win solution that reduces its’ environmental impact, improves the health of the planet, improves farming systems, and reinforces a powerful narrative that makes logical sense to its stakeholders: suppliers (farmers), employees, customers, investors, and community members.  There is even an intuitive connection between “water” and the company’s name: Land O’ Lakes. The next time you slab a chunk of butter on your toast…won’t it taste even better? This is a brand promise you can taste, literally and figuratively.

While some companies give generously to their community, both financially and through volunteer hours, I have seen too many examples where the recipients of their generosity are at the whim of the CEO or employee votes. This is not bad, but I think it is worth their effort to think about how their social and environmental commitments tie strategically to their business objectives, products, operational footprint, and purpose/mission; in ways that are both intuitive to and for the benefit of their stakeholders.  A counter example to this would be if Land O’ Lakes decided to support Panda conservation efforts – an honorable cause but one that isn’t necessarily a part of their stakeholder value chain.

Click here to read about some of the other innovative (and cool!) projects that Land O’ Lakes is doing to protect the health and wellbeing of its stakeholders, including a pollination project that protects bees and pollinator habitat.

Are you looking to be more strategic and stakeholder-oriented with your social and environmental initiatives?  Would you like to invest your time, money and other resources in a way that provides the greatest impact, return on investment, and value for your stakeholders?  SEED Strategies can help – contact us today!

A Perfect Storm For Business: Sustainability, Human Capital Management, and Purpose

Part I of IV

“How do men act on a sinking ship? Do they hold each other? Do they pass around the whiskey? Do they cry?  ~ Sebastian Junger, The Perfect Storm

The Atlantic hurricane season is officially underway.  Meteorologists predict there is a 70-80% chance we will enter a La Niña weather pattern which means we can expect an “above-normal” hurricane season.  Experts forecast 14 named storms for the Atlantic basin, of which 4 are predicted to become major hurricanes.

I believe another storm of epic proportions is taking shape in the global business community; resulting from the convergence of 3 powerful megatrends: Sustainability, Human Capital Management, and Purpose. This storm threatens to massively disrupt Business-As-Usual and, if my forecasts are correct, may even help save the planet (don’t go grab that bottle of whiskey just yet)!

Megatrend #1: Business, Globally, Leading The Way To Sustainability

UN SDG

Sustainability in business is nothing new but, ever since the signing of the Paris Agreement on Earth Day, 2016, the world has been abuzz with efforts to turn signatures into action and sustainability into business opportunities.

This summer, while we batten down the hatches and prepare for hurricane season, the United Nations Global Compact will be convening leaders from around the world to translate the Sustainable Development Goals into business action and innovation!

So far over 8,000 businesses and 4,000 non-businesses from over 170 countries have committed to the world’s largest sustainability initiative to align their strategies and operations with universal principles on human rights, labor, environment and anti-corruption, and take actions that advance societal goals.

There is no shortage of opportunities for businesses to be both highly profitable AND generate abundance for humanity and the planet, rather than being focused solely on profit at the expense of these other valuable stakeholders. “Either/or” is no longer acceptable.  Today, businesses lead with “AND”.  I believe one of the greatest opportunities for businesses to maximize the value, ROI, and impact of their sustainability efforts is to integrate them strategically with their human capital strategies and programs.

Megatrend #2: The (R)evolution Of Human Capital Management

Deloitte HCM trends

Deloitte’s Human Capital Trends 2016 Report indicates that Human Resources’ role in organizational change is rapidly transforming.  Human Capital Management (HCM) is increasingly valued as a key driver of business success.  After all, human beings are a business’ most expensive and valuable asset.

The top four trends identified in the report are:

1) Organizational Design

2) Leadership

3) Culture

4) Engagement

How a business engages employees, develops leaders, and instills values into its culture should be considered integral to organizational design and a core part of the business strategy. And what better way for businesses to thrive than by entering the eye of this perfect storm and looking at their HCM strategy through a lens of sustainability and purpose?

Megatrend #3: Millennials And The Rise of Purpose At Work

2016-06-03 (4)

Numerous studies (including this PwC report) show that Millennials place great importance on having a sense of purpose, more than any other previous generation.  They seek fulfillment and meaning not only in their personal lives but also in their work lives through the relationships they develop and their positive impact on the company, society and the planet.  They want to know that there is alignment between their values and the company’s values and they are either joining or leaving companies because of it.

As the US Chairman of PwC, Bob Moritz, says in a recent HBR article, “PwC’s Millennials don’t only demand to know the organization’s purpose—its reason for being—but are prepared to leave the firm if that purpose doesn’t align with their own values.” Social and environmental responsibility is a powerful set of values that resonate with stakeholders today including talent, customers, community members, suppliers, and investors.  Aligning purpose with sustainability and human capital management strategies can be a powerful way to increase stakeholder engagement which in turn can lead to higher profitability and impact.

Sustainability, Human Capital Management, and Purpose are taking the world by storm.  Are you ready?

SEED Strategies can help guide you through the eye of the storm to give you peace of mind and clarity of purpose on your sustainability journey.  We work with you to understand your opportunities and design human capital strategies and programs that will help you pivot to maximize the value, ROI, and impact of your sustainability initiatives and investments.

Stay tuned for future Insights that will dive deeper into each of the 3 megatrends highlighted above.

Welcome to SEED Strategies!

Hello,

Thank you for visiting the future home of SEED Strategies, LLC!

I am currently in the market research stage and this website is still in draft form.

I welcome input and feedback on this site, my business and my services.

  • What do you think?
  • What resonates with you?  What doesn’t?
  • Where could my business help you?
  • What am I missing?

Please email or call with any questions, comments, ideas or suggestions. If you know someone who would like to discuss SEED Strategies in more detail, I am interested in meeting them!

And please check back on a regular basis.  I will be using the blog section of this website to regularly post “Insights” into the business of sustainability. Hopefully you will find them thought-provoking, useful, and inspiring.

I will also be publishing these “Insights” to LinkedIn, Facebook, and Twitter, so feel free to share with your networks and follow me with your favorite social media platform.

I look forward to hearing from you, and perhaps working with you, on this exciting road to sustainability.

Cheers,

Brad