Sustainability as a concept has been around for a few decades and continues to evolve and expand. Various approaches and tools continue to be developed for designing, implementing, and reporting sustainability for organizations of different sizes and sectors. Regardless of this variety and flexibility, key principles of managing sustainability are virtually the same across all applications. Similarly, the main pitfalls and misconceptions of sustainability transformation are quite universal. This article outlines seven of the most common and significant misconceptions, or otherwise, the “seven sins of sustainability transformation” based on research and analysis as well as personal exposure and experience. Committing one or two of these will significantly jeopardize the organization’s sustainability programs and enacting for more than two will result in absolute failure.
- “We have other priorities now, we can get to it later.”
Deprioritizing and postponing sustainability initiatives is the first fallacy of the transformation. Organizations have limited resources and, historically, ESG initiatives have oftentimes taken the back seat when many projects competed for budget and resources. But the situation has changed. ESG strategy is no longer a nice-to-have but is rather an absolute necessity for organizations to survive and thrive.
When Accenture interviewed executives at the height of the pandemic, 73% of them identified “becoming a truly sustainable and responsible business” as a top priority for their organization over the next three years. In another article by McKinsey & Company, “Centering Strategy on Sustainability” is identified as the highest among the top five priorities of CEOs in the next normal. This concludes that taking initiatives in sustainability will be as fundamental to doing business as compiling a balance sheet in the very near future.
- “If we allocate resources, we can turn it around quite fast.”
The second sin of sustainability transformation is to expect quick turnaround. The ESG transformation journey involves developing a deep understanding of the organization’s current status and its capacity in sustainability, setting a comprehensive strategy and action plan, developing and executing communication, alignment, and engagement plans, investing in initiatives, and implementing technology and process changes, and monitoring and reporting. These are all intensive and time-consuming steps but are essential and effective in securing a sustainable future if planned and executed properly. More importantly, in most cases, it involves changing culture and shifting mindsets, including those of external stakeholders. So, it is not going to be an overnight shift. While it is important to be bold on ESG ambitions and targets, it is also vital to be realistic about the organization’s capacity in achieving the goals and milestones.
- “It’s all about process improvement and local adjustments; we can do it in-house.”
While there are opportunities for every organization to drive sustainability by introducing marginal improvements in processes and day-to-day activities, the deeper and long-lasting transformation on sustainability, in most cases, involves disruptive changes, paradigm shifts, and complete abandoning and replacement of some of the existing technologies and processes. Incrementalism is not going to get you there.
One of the key consequences of this phenomenon is that relying on the existing knowledge and know-how within the organization will most likely need to couple with the experience, methodologies, and insights of an external consulting team to deliver the change. As such, most of the organizations will need to partner with external teams with the right combination of expertise and experience to be able to identify these disruptive opportunities, bring innovative and impactful ideas to the table, and walk the organization through the challenging course of the transformation.
- “ESG transformation is a project.”
ESG transformation is a mindset, a leadership approach, and a continuous effort to learn, implement, monitor, and adjust; not a project with a temporary team and predefined start and completion dates. Sustainability strategy may start as a project for many organizations, but in order to make it last and make it have long-term impacts, it needs to become an ongoing process. The first iteration of the strategy may not be perfect as the organization is still learning and the strategy itself may have many assumptions that need to be verified and adjusted, but it becomes more streamlined and more accurate with every cycle of planning, implementation, monitoring, and adjusting where the organization will reap the benefits of this learning curve on sustainability transformation.
- “We can do this internally without engaging external stakeholders.”
Traditionally, strategy development and deployment have been internal tasks and organizations do not share strategic plans with external teams and individuals as much as possible. Sustainability strategy is fundamentally different from business strategy in this aspect. Key groups of stakeholders, including those external to the organization, are at the core of any sustainability strategy and this goes even beyond the direct business stakeholders such as employees, customers, and suppliers. A successful sustainability strategy needs the involvement of all stakeholders, not only in the implementation and delivery phase but just as much in the development and design stage.
- “It’s an operational issue, no need to involve the top management.”
Sustainability transformation takes commitment and sponsorship from the top to be successful. A leadership team that is fully onboard and strongly believes in sustainability—not only as an effective differentiating approach and a fringe movement but also as the only path forward—is essential for the success of any organization’s sustainability efforts. In successful organizations, leadership is the ultimate owner of sustainability strategy, overseeing and leading every step of the process.
- “It’s the responsibility of one team and we don’t need to bother other teams within the organization.”
Sustainability transformation is a collective effort and must engage various stakeholders. The team or department responsible for developing and monitoring sustainability strategy can vary from one organization to another. Larger organizations have a sustainability department. In other organizations, it will be the responsibility of the corporate strategy team, HR, or other departments. But one thing is the same for all organizations: it is the fact that no single department or team by itself can be successful in delivering the change. Everyone has a role to play and it’s the responsibility of all the teams and individuals within and around the organization to make it happen.
