Twenty years ago, I was working on a building site in the Atlantic Rainforest in southeast Brazil. I was reminded of this experience as I led the research underpinning Accenture’s Shaping the Sustainable Organization report. Little did I know that a plumbing debacle would teach me an invaluable lesson about how sustainable companies are built.
The problems started when I was asked to retrofit a running water supply to the school we were working on. The first problem was that I had no idea where to focus our limited resources — I didn’t know what the teachers and pupils valued most. The second was that the pump we secured to bring water up from the river was rudimentary — and that I had little plumbing experience. The third was that the building was largely finished by this point, and my fellow labourers were reluctant to undo any of that work.
Suffice it to say that when I left the project, the total of my efforts was, somewhat shamefully, a standalone water fountain in the playground.
Atlantic Rainforest in southeast Brazil
Bolted-on, not built in
Today, business leadership teams are grappling with the same issues, albeit at an infinitely larger, more complex scale. Because just as water is a fundamental human need, sustainability has become a fundamental business need. And I mean that literally: companies that cling to anachronistic business models, which prioritize growth over grief (think high emissions or low wages), will perish.
However, sustainability is still too often an afterthought that borders on the cosmetic. The perspectives of customers, employees, suppliers and other stakeholders are “bolted-on” to existing business practices, instead of being “built in” from the ground up.
<<< Start >>>
Sustainability is still too often an afterthought that borders on the cosmetic
<<< End >>>
As such, sustainability tends to exist as a subservient adjunct to traditional profit-making activities; a “poor sister” which is given neither the time nor the resources it deserves. To emphasize the point, Accenture’s Business Futures 2021 research found that sustainability rhetoric outweighs results for 43% of companies.
And just like on my building site, this leaves leadership teams lacking three key drivers of behavioural change:
- Active, two-way relationships to understand what stakeholder need and want;
- The insight to deeply embed stakeholder perspectives into decision-making;
- A sense of shared ownership to move sustainability goals out of the boardroom and into the core of day-to-day activities.
In short, stakeholder-centric organizations cannot be built in a vacuum. So, how might leadership teams respond?
Measure what you treasure
The blueprint for sustainability is digital transformation. Digital has moved rapidly from an augmentation to a business fundamental — to the point that IT spend is increasingly seen as a “cost of operations” instead of a “cost of revenue.” Similarly, sustainability must move from simply being regarded as a “check box” to an integral creator and protector of enterprise value.
Our Shaping the Sustainable Organization research finds the answer in a company’s Sustainability DNA: a set of 21 management and measurement practices that directly address the challenges set out above:
- Firstly, by nurturing human connections — deep, two-way stakeholder relationships;
- Secondly, by cultivating collective intelligence — decision-making fuelled by stakeholder perspectives;
- Together, these address the third challenge by driving accountability for operating sustainability throughout the organization and broader business ecosystem.
More growth, less grief
Having tested this framework on almost 4,000 companies, we found that organizations with stronger Sustainability DNA outperform their peers on financial value creation and sustainability performance measures. For example, take AB InBev: having set a recyclable packaging goal, they invested in environmental innovation, reducing both waste and costs in the process.
Reflecting on my own experience in Brazil, it’s clear (and, frankly, unsurprising) that many of these practices were missing. But the stakes for leadership teams today are much higher. Sustainability has become a business imperative. Only through sound measurement and management practices that embed sustainability into the core of day-to-day operations can leadership teams hope to deliver on their promises.
This is not easy: we’re talking about fundamentally reimagining how companies operate. So, to get you started, we built a 10-question diagnostic. This will help you decode the relative strengths and weaknesses of your Sustainability DNA – and to shape an organization that delivers for all.
See Shaping the Sustainable Organization report
Take the diagnostic and learn the strength of your Sustainability DNA