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The next era of sustainability: what can we learn from the last generation of strategies?

Karina Van Ginkel 30 September 2021

A student studying in a lecture hall

The new decade marked the end-point of many companies’ sustainability strategies and an opportunity to formulate new ones.


But the pressure on these new strategies is increasing – and not just because 67 per cent of all strategic plans fail.[1] With every passing day, yet more news confirms the scale of the sustainability challenges we’re facing. Collectively we need to move further and faster to tackle them - and companies need to do their part.  


So we had a thought. What, if anything, could we learn by looking back at the successes and failures from the last generation of strategies? What lessons could we take from them to chart the best path forward? It turned out there were ten.


1. Keep it simple


Many organisations try to do too much with their strategies, often overcomplicating where clarity is needed. Complex strategies can turn people off and give the impression of a company spreading itself too thin. Limit your focus areas – and the number of goals within them – to streamline your approach and demonstrate dedication to the areas you can impact most.


Who’s succeeding?


Ferrero’s ‘For The Better’ sustainability strategy used the outcomes of their materiality assessment to identify the priority area for their new sustainability strategy. The strategy was simply structured around four strategic pillars where the company aims to have the greatest impact: protecting the environment, sourcing ingredients sustainably, promoting responsible consumption and empowering people.


2. Diagnose what matters


Strategies are often unsuccessful because of their lack of prioritisation. Without an intentional, robust understanding of the most salient items to focus on, your strategy is unlikely to be effective. This is where materiality assessments can become incredibly valuable. When used meaningfully to its full potential, the outcomes of a materiality assessment can be used to inform your strategy, broader communications and stakeholder engagement.


Who’s succeeding?


The results of Bank of Ireland’s 2020 materiality assessment informed the development of its new ‘Investing in Tomorrow’ strategy that empowers customers, colleagues and communities to thrive. The assessment carefully considered how its position as one of Ireland’s leading banks influenced stakeholder expectations and made sure their new strategy could invest in and leverage its core products and services to provide better service 


3. Light some fires


Strategies of old were often based on incremental targets set in the context of past performance rather than a more forward-looking aspiration. Now, armed with the knowledge that transformation needs to come much faster, new strategies need to be underpinned by more ambitious objectives (some of which may even rely on technology that doesn’t yet exist). Even if you don’t know exactly how to achieve all your goals, setting moonshot targets will create a sense of urgency and inspire action.


Who’s succeeding?


In January 2020, Microsoft announced a historic commitment to become carbon negative by 2030 and remove all carbon the company emitted since its founding from the environment by 2050. Appreciating the urgency of the task at hand, it used the announcement of this bold bet to address climate change as the catalyst for transformation and stimulate innovation.


4. Show me the money


Mounting evidence shows that sustainable companies deliver significant positive financial performance, and investors are beginning to value them more highly. Despite this, sustainability strategies haven’t always made the connection between sustainability performance and financial success more explicit. Doing so will more clearly demonstrate the business case for integrating sustainability practices and boost business-wide buy-in to action your strategy.


Who’s succeeding?


CRH provides a business case for its sustainability agenda that connects it to financial rewards such as creating a competitive advantage, managing risk, attracting talent and long-term value creation. CRH also details how sustainability principles have been embedded into all areas of its business strategy.


5. Connect the dots


Most strategies fail due to poor execution - and lofty objectives can be intimidating, or, worse, confusing. One of the best ways to lift the fog and make your vision clear is through a strategic roadmap outlining the actions and timelines needed to help your company achieve its goals. A roadmap can serve as a GPS for your business, showing your audiences where you are and where you’re going.


Who’s succeeding?


Alongside the announcement that it would decarbonise its business and become net zero by 2030, Great Portland Estates published a clear roadmap detailing its plans to execute its new net-zero goals.


6. Make it memorable


Leverage your sustainability strategy as a powerful communications tool that people can understand and recall. By developing a compelling name, visual identity and personality, you’ll help bring your strategy to life and allow it to cut through as something real that people are inspired to act on.


Who’s succeeding?


Lloyds Bank’s ‘Helping Britain Prosper Plan’ is brought to life through stories from across the Group’s portfolio, through unique illustrations that are being used across social media, film, and reporting.


7. Stay grounded


Sustainability targets have often taken the form of voluntary commitments based on company aspirations, rather than grounded in science. With higher stakes must come stronger commitments, and it’s simply no longer enough for companies to reduce their impacts with objectives that are entirely self-set. Instead, reconcile your activities and targets with your external context. For example, consider setting targets in accordance with Science-Based Targets (SBTs) that are in line with what the latest climate science says is necessary to follow the 1.5C trajectory. The concept of Planetary Boundaries is another limit that can be used as a basis for defining sustainability targets.


Who’s succeeding?


All of L’Oreal’s new carbon targets for 2030 were set in accordance with the SBT rationale, while its water, biodiversity and natural resource targets were developed in accordance with the scientific ‘Planetary Boundaries’ concept. This means the company is targeting operating within the established limits of what the planet can withstand as defined by environmental science.


8. Become more ‘social’


Historically, social issues have been much harder to measure and manage. Indeed, pre-Covid, the ‘S’ in ESG has been long overshadowed. Companies were simply more willing and able to share efforts made on good governance or protecting the environment than on, for instance, the workers who live in it. But social issues are quickly moving up the agenda. Despite the notorious difficulties in quantifying performance on social issues, demands for activities that support people will continue to ramp up – you’ll want to make sure your strategy is rising to the occasion.


Who’s succeeding?


As the largest healthcare company in the world, Johnson & Johnson’s ‘Health for Humanity’ strategy aims to help people be healthier by providing better access and care in more places around the world, by combating and preventing disease, improving access and affordability of healthcare, supporting communities and health workers, and driving healthcare innovation. Each of these focus areas are buttressed by specific and measurable targets and metrics.


9. Stay nimble


Inevitably, company strategies will be based on their best assessment of trends at the time the strategy is set. But recent events like #MeToo, Black Lives Matter and Covid-19 underscore the reality: shifts in stakeholder perspectives and priority issues can arise out of nowhere. To enhance the resilience of your strategy, keep your finger on the pulse of emerging trends and engage with stakeholders on a more regular basis.


Who’s succeeding?


Unilever shared their most valuable lessons learned over the course of a decade pursuing their Sustainable Living Plan from 2010-2020. Among them was ‘be ready to move fast,’ which reflects on how quickly issues accelerated since they initially set their targets in 2010. To better prepare for changing circumstances, Unilever suggests asking the uncomfortable ‘what if’ questions more frequently.


10. Take it centre stage


Too often sustainability strategies are either a tokenistic component or entirely removed from the corporate mission or day-to-day activities. To succeed, make sustainability a more obvious part of your overall business approach – think about embedding your sustainability strategy as a key business value or a pillar of your wider corporate strategy. But take this beyond a tick-box exercise: integrating your business in this manner may require a wholesale reflection on how your business creates value for your stakeholders. 


Who’s succeeding?


Sustainability is embedded into Heineken’s business strategy through its pillar ‘Brewing a Better World’, which is one of five business priorities. The purpose of the pillar is to limit potential negative impacts and maximise positive contributions by embedding its strategy across all activities.


What do you think?


If you’ve read this far, you likely subscribe to the view that sustainability strategy and communication contributes positively to progress on sustainability issues. But we’re going to need to continue pushing the envelope if these mechanisms are to live up to their full potential.


Learning from the past and collaborating with our peers will play a big part in the progress we’ll make together. But what do you think? What has worked for you? Where will you be taking your organisation next? We’d love to talk.


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[1] Bridges Strategy Implementation Survey Results 2016