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Making investment decisions is about weighing up probabilities of risk and expected return, alignment with strategy and capacity to deliver. Investments in sustainability are no different once you’ve got to the point of setting out what you want to do and why – the business case.
But getting to that point is tough, as today’s latest report, Ethical Corporation’s Europe’s State of Corporate Responsibility Sustainability 2016, highlights. It’s one of the biggest surveys of its type in the industry, so is a good way to help you distil the signals from the collective noise of opinion, data, indices and reports.
85% of respondents say CSR is becoming an increasingly important part of their business strategy. 55% said it’s delivering revenue for their organisations. But 25% say their budgets are in the $0 – $10,000 range and only 26% say expect budgets to increase in 2016. Just 4% say their budget is in the $500,000 – $1,000,000 range.
In short, this says ‘it’s important and delivers clear value, but we’re not investing much in it.’
What separates the ones that invest from the ones that don’t is simply whether they know what role sustainability plays in their business or not. Once this role or frame is clear, then the business cases get seen in that light.
The widely recognised leaders, who unsurprisingly are big investors in sustainability know this. They make the role of sustainability very clear for people inside and outside the business.
IKEA have connected it to their vision ‘making everyday life better for the many people.’ For them, better’ is where sustainability comes in. The role of sustainability is therefore about innovation at product and process levels.
Bank of America talks about sustainability as a way to better serve their customers and society. Their stated purpose is ‘to make the financial lives of those who do business with us better.’ Within this purpose, sustainability becomes a way to serve more responsibly and therefore better.
Nike sees sustainability as part and parcel of innovation according to their President and CEO Mark Parker “Nike’s success as a growth company is tied directly to our culture of innovation. Today we believe that sustainable innovation that benefits the athlete, the company and the planet will play a key role in the future of our business.” They’ve locked their organisation into this by making sustainability the remit of their Sustainable Business & Innovation team.
For those without a clearly defined role for sustainability within the organisation, are simply falling back on the default associations people will have of sustainability in their minds. As many senior leaders within organisations worked their way up before sustainability made a real mark. Unfortunately, this means their default way of looking at sustainability is acts of ‘doing good’ or ‘giving back’. With that mindset, it’s no wonder investment levels are so low.
Asking ‘what role does sustainability play in your organisation?’ seems like a very good question be asking right now.
Written by David Willans.