It is an all-too-common refrain: The lack of internal buy-in for corporate sustainability projects and strategies. In 2019, we worked with the Cornell University Sustainable Global Enterprise (SGE) Center to survey 19 corporate sustainability professionals. We found that 85% of respondents need more and better metrics to make the internal business case for sustainability initiatives.
“What do I commiserate about with my colleagues at sustainability conferences? No one at my company gets it... How do I get more buy-in?”
– Sustainability Professional
Metrics That Make The Business Case For Sustainability
Move Beyond Materiality
To date, most sustainability metrics are focused on addressing progress toward resolving social or environmental challenges that have a material impact on the business. Once these “materiality” metrics are defined, they are often tracked in accordance with external reporting standards or guidance such as the Global Reporting Initiative (GRI), the Carbon Disclosure Project (CDP), or the Sustainability Accounting Standards Board (SASB). Unfortunately, while materiality metrics are critical for addressing the concerns of external stakeholders—advocacy groups, shareholder activists, regulators, etc.—they do little to generate support inside the company for investing in sustainability.
To build the internal case for sustainability projects in large companies, sustainability teams also need to develop and track metrics that align with the priorities of internal stakeholders. Operations units need to understand how efficiency will be increased or costs reduced. Procurement or sourcing teams want assurance that projects will increase productivity, reduce costs, or reduce risks of supply disruption. Human resources teams want to know how sustainability initiatives will help attract or retain talent. Marketing and corporate affairs teams need to understand how sustainability initiatives could bring value to the brand or increase license to operate. The list goes on.
Plan For Different Perspectives
To make the business case for sustainability, internal metrics will need to differ from standard materiality metrics. So, while outward-facing sustainability plans will likely map alignment with the UN Sustainable Development Goals (SDGs)—for example, in percentages of energy and water consumption reductions or number of individuals reached through health and livelihood initiatives—the internal, behind-the-scenes metrics a company will use to drive success may look quite different.
For example, before sponsoring new or existing sustainability initiatives, procurement teams will want to know how health initiatives in their supply chains could translate to higher quantity or quality of yields from their farmers. Operations teams will be interested in the savings and payback estimates of energy efficiency initiatives, so that they can calculate the return on investment.
To create metrics that effectively convey how sustainability is good for business, you need to start by understanding the objectives of key business units from across your company. Typically, business unit goals within a company will include:
- Creating new revenue streams by accessing and attracting new customers or developing new products or services
- Reducing costs by operating more efficiently, thereby reducing energy, water, labor, or waste costs
- Improving product quality by sourcing high-quality materials or improving working conditions in supply chains or operations
- Increasing volumes, productivity, or yields in supply chains by helping suppliers improve resource or workforce management practices
- Reducing reputational risk by proactively monitoring and managing human rights and environmental issues
- Attracting or retaining talent by elevating the company’s brand or by developing workforce training or development projects
These examples help paint the picture of how different departments are evaluated and rewarded. However, this list is not meant to be exhaustive: Sustainability professionals don’t necessarily need to become experts on business metrics. Instead, they need to invite the experts to the table. Here are three steps sustainability teams can take to set themselves up for success at the beginning of any new project:
How Sustainability Teams Can Set Themselves Up For Success
1. Clearly articulate the business value
The sustainability team needs to articulate why a sustainability initiative is aligned not only with overall corporate strategy, but with the goals of other business units in the company: procurement, operations, marketing, HR, etc.
2. Identify and engage internal stakeholders
Identify the internal stakeholders whose business goals align with the business value of the sustainability initiative. For example, an initiative to empower women in supply chains might be of interest to procurement teams because it could also reduce absenteeism at manufacturing plants in the supply chain. Or investments in regenerative agriculture could help procurement teams enhance the resilience and productivity of key supply lines.
3. Align on project metrics
Meet with priority, aligned business unit teams to understand what they are already measured on. What is in their performance plan, individually and as a team? What metrics does their boss care about? Once you have an understanding of the business value and the internal stakeholders, you can then align with those metrics and embed the sustainability project into these existing systems and processes. (For example, many procurement teams have been tasked with diversifying their suppliers; this unlocks new potential for sustainability teams to advance plans for sustainable sourcing and/or social procurement.) Moving forward, you can use this information to prioritize projects based on what the company and its internal stakeholders care about most, which will greatly increase your likelihood of success.
Once a sustainability project has been given the green light, ensure that internal teams are in agreement with the stated metrics and that they are willing to partner on measuring success. Then set up a way to track the metrics, collect the first round to establish a baseline, and decide how often to collect and check progress.
During the course of the project, the sustainability team should coordinate closely with partner teams to understand the challenges encountered. Monitor metrics during the agreed-upon timeframe and evaluate if the project is delivering the anticipated results. If not, convene with partner teams again to understand what isn’t working. Report back to leadership on a regular basis on successes of the projects, to help gain more momentum and investment.
Moving Forward With Better Metrics To Gain Successful Sustainability
As the importance of corporate sustainability continues to grow, sustainability professionals must develop and make use of metrics that help show the value of these projects to the rest of the company. Better metrics can go a long way in generating the internal buy-in needed to make sustainability initiatives successful.