Article - Environment & Sustainability - Innovation & Acceleration -Companies

Making the Business Case for Sustainability

- July 29, 2019

How to get buy-in on your project with better metrics

“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

It is an all too common refrain: the lack of internal buy-in for sustainability projects and strategies. A recent study, conducted jointly by the Cornell University Sustainable Global Enterprise (SGE) Center and Resonance, found that 85% of sustainability professionals surveyed need more and better metrics to make the internal business case for sustainability initiatives.

Move beyond materiality

To date, most sustainability metrics are focused on addressing progress toward resolving social or environmental challenges. Once these “materiality” metrics are defined, they are often tracked in accordance with external reporting standards or guidance such as GRI, CDP, or 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 efficiency or productivity in supply chains, 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. The list goes on.

Plan for different perspectives

To illustrate how internal metrics differ from standard materiality metrics, take the example of Ayala Corporation’s recently launched Sustainability Blueprint. With impressive clarity, the blueprint addresses alignment with UN sustainable development goals (SDGs) and Ayala corporate strategy: percentages of energy and water consumption reductions, number of individuals reached through health and livelihood initiatives, and much more.

But behind the scenes, the metrics a company designs to drive success may look quite different. 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.

Typically, business unit goals within a company will include:

  • Creating new revenue streams by accessing new customers or developing new sustainable products or services
  • Reducing costs by operating more efficiently thereby reducing energy, water, labor, or waste costs
  • Improving product quality by 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 developing workforce training or development projects

These examples help paint the picture of how different departments are evaluated and rewarded. However, the 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 teams can take to set themselves up for success at the beginning of any project:

  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.
  1. 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.
  1. Align on project metrics
    Meet with each of these partner 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. Moving forward, you can use this information to prioritize projects based on what the company and stakeholders care about most, which will increase your likelihood of success even more.

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.

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.

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If you are a corporate leader and would like to be a part of a discussion about these and other issues in the presidential transition, contact Resonance Strategic Partnerships Manager, Seth Olson.