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While many chief executive officers of leading companies are now setting ambitious sustainability strategies and targets for their businesses, they are often unclear about how to organize for success.
Inevitably, there is no one-size-fits-all model. Businesses have different drivers for sustainability and will need to structure themselves accordingly: the challenge is to organize the sustainability function for an optimal fit with the company’s strategy and existing business model.
The aim should be for a holistic approach to sustainability, with a joined up structure that operates across the organization. Integration is needed across customer segments, geographies, business functions, product and revenue models. From there, mature businesses can move towards self-governance, rather than a rules-based approach policed by a central sustainability team. This will require sustainability to be embedded throughout the organization as an integral part of its corporate culture.
But once sustainability is embedded across the business, the natural instinct might be to dispense with the central team. However, as this report argues, this scenario should not be regarded as an end-point, as continuous improvement is key: when no-one has a designated responsibility for sustainability the model may steadily slip from view and the business’s consciousness.
Businesses are increasingly looking to build sustainability plans that are closely integrated with their core strategies.
We have found that there are seven key characteristics of high performing sustainability functions:
Coordination with corporate strategy. Align the sustainability strategy of the business with its corporate strategy, taking account of the long-term trends and growth opportunities identified by the business.
Connection to customers. Sustainability experts are generally key contributors as the business designs and rolls out its products and services, building the case for sustainability in each instance.
Collaboration with business functions. Sustainability works best when embedded into every function in the company—not just market-facing divisions.
Change management. Exploring sustainability opportunities often requires a business to go beyond the usual investment criteria applied to potential new projects.
Centre of excellence. The sustainability team can offer a valuable pool of expertise while raising the profile of sustainability across the business.
Consideration for the future. Strategic sustainability imperatives may change over time, the sustainability team needs to be able to anticipate these trends in order to avoid locking the business today into a course of action that ultimately proves unsustainable.
Communication of performance. The business needs to ensure metrics are consistent with the strategy, and are targeted to enable and evaluate performance of individual functions.
If organizations are really serious about integrating sustainability into the way they do business, it’s crucial that it becomes an intrinsic part of the operating culture.
Adopting the standalone model for organizing for sustainability is the easiest way to begin the journey, and provides a building block for the future, but it will not deliver the greatest transformational power.
Sustainability champions at every level of the company will also need the authority to drive through the delivery of initiatives. Without time, budget and backing from senior executives, their projects risk being constrained.
As the momentum for sustainability builds, organizations will investigate new ideas and develop new processes for delivering projects and measuring their results. Crucially, there will be lessons to be learned on each occasion and organizations must strive not to rigidly repeat the same ideas in the new operating model.
Over time, the journey towards a company organized for sustainability should see the culture of the business change steadily. The goal is for sustainability to become an automatic part of the day-to-day decision making of all staff. At this stage, the embedded model has become a reality.
Once that goal has been realized, the role of the central sustainability team is likely to change, but it will nonetheless remain an integral part of the organization. Its focus will shift towards strategic management and oversight, while continuing to provide specialist expertise and to respond to new challenges.
Peter Lacy is a managing director leading Accenture’s Strategy and Sustainability Practice in Asia Pacific. Lacy is based in Shanghai.
Robert McNamara is a managing director leading Accenture’s Sustainability Services practice in North America. McNamara is based in Chicago.
Melissa Barrett is a senior manager in Accenture’s Sustainability Services practice. Barrett is based in London.
Quentin Drewell is a manager in Accenture’s Sustainability Services Practice. Drewell is based in the UK.
November 22, 2013
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