CEO of BlackRock, Larry Fink, predicted in 2022 that “The decarbonising of the global economy is going to create the greatest investment opportunity of our lifetime.”
But like any investment opportunity, you need to strike early to get the best results.
Luckily, a lot of the groundwork is already in place.
In just two years, even Gen X’s preference for sustainable brands rose by 25%. This trend shows no signs of stopping, with Gen Z poised to overtake Millennials as the biggest demographic of consumers by 2031 — and almost 90% of them willing to pay 10% or more extra for sustainable goods.
So what is stopping businesses from adopting more sustainable practices?
In this article, we’re going to look at the challenges currently surrounding corporate sustainability and how businesses from all sectors can play their part in spearheading a more sustainable future.
Leadership challenges in sustainability
As a relatively recent phenomenon, we’re still lacking the right sustainability training, culture and best practices. There’s a clear disconnect between what consumers want and what leaders think they want. Two-thirds of consumers express a willingness to spend more on sustainable products, while an equal proportion of retailers believe that customers won’t pay extra.
The result is that leaders tend to dismiss corporate sustainability or go for simple solutions that can do more harm than good.
Structures such as carbon credits, for example, have encouraged businesses to pay the problem away, without making any meaningful efforts. However, this has led to accusations of greenwashing when companies don’t do their due diligence.
Now that consumers are not only aware but concerned about sustainability issues, credibility is now defined by evidence of integration and impact, not just marketing claims.
Clearly, the main challenge is that companies have no clear vision of what real corporate sustainability looks like. Therefore, we’re now going to look at some standout examples of how companies have thrived by embracing sustainability.
Successful leadership strategies in sustainability
Just as there is no route-one way to grow a company, there is no go-to method for incorporating sustainable practices. Below are a range of different avenues for companies to take serious steps toward genuine corporate sustainability.
The transfer of ownership to NGOs
Patagonia has long been seen as a leader in sustainability. Their commitment covers supply lines, social responsibility programmes and how they source their materials.
However, their decision to transfer ownership to NGOs is an unprecedented step. One entity, the Patagonia Purpose Trust, holds the company's voting stock, while the Holdfast Collective owns non-voting stock and will reinvest profits into environmental initiatives.
SMEs opting for fractional Chief Sustainability Officers (CSOs)
Not all companies can compete with multinationals, but other ways exist to make a sustainable impact.
Many small and medium-sized enterprises are making the most of the “fractional CSO” trend. With such a limited talent pool, proven CSOs are in high demand, and some have decided to split their time between two teams.
This is especially helpful for companies on limited budgets who may not be able to afford a full-time executive. As we wait for educational institutions to provide talent in the field of corporate sustainability, this act of collaboration is a more-than-viable stop-gap.
FMCG businesses working together to address common challenges
UN Global Compact has provided another channel for collaboration. Aiming to create a more sustainable future for all participating companies, it is based on ten principles that go beyond sustainability to encompass broader UN Sustainable Development Goals.
Their new Board Chair & CSO of Colgate Ann Tracy, recently described the mission of her US branch.
“We are laser-focused on empowering US businesses to advance the UN Sustainable Development Goals while enhancing their resilience and sustainability in an ever-evolving world through our programs and engagement efforts."
Through Accelerator Programmes and Peer Learning Groups, small companies with lower budgets can access cutting-edge corporate sustainability best practices.
B Corp certification
A B Corp certification is awarded to businesses that meet stringent standards around social and environmental performance, transparency and accountability, with the aim of balancing profit and purpose.
On the consumer side, it cuts through suspicions about company claims and supply chain promises giving customers peace of mind. This makes a B Corp highly attractive to sustainability-minded buyers, who can rest assured that they’re dealing with an ethical company.
As employers, B Corps attract leading talent as they are more likely to respect work-life balance, pay a fair wage and offer clear pathways for professional growth. This symbolises a breakthrough in combining a social impact mindset with a for-profit structure.
It’s not easy to qualify to become a B Corp, but the effort is worthwhile. A B Lab white paper found that from 2019 to 2021, B Corps grew more reliably than regular companies. They are more resilient too, with 95% still in business in 2023, compared to 88% of non-B Corp organisations.
The future of corporate sustainability
Looking forward, the only certainty we have is that you can’t avoid a meaningful shift to corporate sustainability. So what does that mean in practice?
Recently, universities and business schools have made ethics and sustainability a key component of every course they deliver — not just dedicated courses on sustainability itself. As these cohorts take up executive seats, we will see greater implementation of corporate sustainability across functions, from finance and HR to operations and supply chain.
As governments worldwide introduce more stringent environmental regulations, companies will need to get up to speed on their compliance, transparency and reporting. Businesses that are already part of the UN Global Compact or that have B Corp certification will be in a stronger position to absorb these regulatory changes.
The circular economy will move from a trend to an accepted way of working. Drawing on best practices from those already succeeding, and hiring profiles with a strategic understanding of how to implement them, will stand you in good stead to design products for longevity, reusability and recyclability.
Partnership and collaborative efforts with governments, NGOs, communities and even other businesses will come to the fore. These collaborations will inspire shared solutions and encourage a better pooling of resources and expertise.
Technological advances will play a role in enabling corporate sustainability in areas such as renewables, energy efficiency, waste management and sustainable materials. Staying ahead of the curve on these issues will be essential to forward-looking companies.
Taking the first step towards corporate sustainability
Successfully implementing a sustainability roadmap is more than a basic understanding of policies and systems — it requires leaders to set a clear example through behaviour, strategy and action.
With decades of combined experience, Eunity Partners vets leaders based on their perspectives on key issues around sustainability. We help decision-makers to identify senior and C-suite candidates who:
Combine care for the planet with results-driven leadership
Demonstrate a track record of effective strategies and cultural impact
Look beyond their own company for inspiration and collaboration
Frame challenges as opportunities, rather than obligations
Influence stakeholders to get universal buy-in
Eunity Partners has recently begun innovating with new talent solutions tailored to organisations that are restructuring their sustainability function and embedding talent within their other core functional areas.
So if your business is poised to embrace corporate sustainability, reach out to our team of consultants.
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