Leading cultural change through senior leadership
Senior leadership is acknowledging that societal and environmental challenges are bigger than us all, says John F Brock
We know that the success and sophistication with which companies are adopting sustainability strategies varies widely. However, we have found that the most critical driver of sustainability within an organisation is senior leadership.
According to our research*, nearly half of business executives (44%) believe engagement with their leaders will be the most important factor in successfully implementing a sustainability strategy over the next three years.
What I found particularly striking was the challenge of mobilising business leaders to engage on sustainability issues - both in the acknowledgement of its importance and the barriers to putting it into practice.
As a CEO, I think it's imperative for Boards of businesses to have periodic meetings that address sustainability. There seems to be great opportunity for improvement here as only 18% of the senior executives we surveyed have directors who assess the success of sustainability initiatives.
This is further demonstrated by a recent article on edie.net which revealed that UK workplaces are missing out on more than £300m a year in savings that could be achieved by engaging employees in energy efficiency and waste reduction.
In our experience, employees are passionate about this and want to help their organisations lead. The importance of sustainability to the workforce of the future further demonstrates one of the many reasons why it's vital for leaders to engage their businesses with sustainability practices.
I know, for example, that sustainability is the second biggest driver of employee engagement at CCE, so communicating our vision and explaining the role everyone can play is part and parcel of our everyday operations. I firmly believe that businesses need to embrace new approaches to sustainability and I am strongly committed to implementing the resources to manage this.
In my opinion, leaders must advocate for the sustainability business case, and lead cultural change within their organisations - not only to address social and environmental issues but also to influence the wider business community.
Innovation, collaboration and technology were also found to have an important role in the success of sustainability strategies.
In the context of our changing environment, it is clear that tried-and tested solutions can only get us so far. So we must accelerate the pace of change, and embrace new business models to drive breakthroughs in the next era of sustainable business.
I've already seen some progressive companies doing this, and using disruptive approaches to extract real value from the green economy. For example, over the past five years, clean technology and circular economy services have grown by 24% and 18% respectively (BIS).
In the world of big data, mapping and metrics are key to reducing environmental impact, and 74% of businesses are using innovative technologies to reduce their environmental impact.
Online smart metering of water and energy use can generate large volumes of information - which can then be analysed - eliminating waste, driving efficiency and reducing impact.
Innovation is often the result when different parties collaborate. It's the responsibility of business leaders, like me, to acknowledge that the societal and environmental challenges are bigger than all of us and to facilitate collaboration with other organisations to make a change. It's becoming common practice for companies to work with NGOs, academics and customers as a way of connecting skills and knowledge. For example, we are currently working with a crowd sourcing platform to develop innovative new recycling solutions.
And while a third of businesses now work with competitors to generate sustainability innovation, the same proportion also believes that a key benefit of sustainability is the differentiation it gives them from competitors. So is there a way to achieve both? The key is to understand which components are core to competitive advantage, and which challenges affect all companies. For example, recycling is an untapped opportunity to reframe what people consider waste.
Packaging has value and by getting it back into the value stream through improved recycling rates, we can extract that value and contribute towards better use of natural resources. Technology will also continue to be important in driving sustainability plans forward. 58% of businesses we surveyed said they are already using technology to develop more sustainable business models, 54% are using social or mobile technologies to engage with their customers, and 41% say they've successfully harnessed technology to improve their environmental impact. Above all however, I strongly believe progress must come through the buyin and drive of business leaders.
When that happens, companies can align profitability and sustainability and improve stakeholder engagement, cascading its importance throughout the organisation and its broader value chain.
We can't get there on our own. It will be the leaders that recognise this and use it to their competitive advantage that will be leading the way over the next 20 years.
John F Brock is the CEO of Coca Cola Enterprises