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SustainAbility's three steps to green leadership transparency

Think tank SustainAbility breaks down the problem into the six attributes of leadership…and solves the trickiest part: making them all work together. Read More

Green wave image by jenny downing via Flickr

Making a business sustainable can be arduous, and laying the groundwork to keep it sustainable—no matter how big it grows—takes even more planning and effort.

To this end, SustainAbility and GlobeScan collaborated on the Regeneration Roadmap, interviewing sustainability pioneers for ideas and insights for a greener future. The research culminated in the recent “Changing Tack” (PDF) report, which tackled the problem of accelerating and scaling systems-level sustainability solutions. The answers give us a blueprint for leadership with integration and transparency at every step.

Six attributes of leadership, with transparent glue integrating them

“Changing Tack” presents the six attributes of leadership: vision, goals, offer, brand, transparency and advocacy. Each one of these attributes is complex. That said, getting them all right is synonymous with achieving sustainability integration, the key to leaping beyond incremental improvement to that step-change toward which we are striving.

Infographic courtesy of SustainAbility

There is a particular relationship between integration and the Transparency attribute. We see this as extending far beyond sustainability reporting, which is where much of the transparency conversation hovers today. In “Changing Tack,” we make three transparency-related calls to action.

1. Improve the use of disclosure mechanisms

2. Use technology to better signal to internal and external stakeholders

3. Value externalities more fully and accurately

Do these three things well, and get the other five leadership elements right, and voil?, you’re integrated—by which we mean your sustainability and other business objectives are directly linked, if not in fact one and the same.

Integrate transparency at every level

Integration is not the same as saying “Sustainability is in our DNA.” We often see this claim without any details of what else might be competing for prominence among the corporate chromosomes. Apparently many humans have Neanderthal in our DNA. Just because it’s in our DNA doesn’t mean it defines us.

Let’s face it: Who checks whether a company that says it has sustainability in its DNA actually undermines as many needs as it serves? We need a proper litmus test for integration.

Enter transparency. We need transparency designed to enable better decisions, where “better” means more likely to have net positive impacts on society and the environment while also serving the business’s financial needs.

Green glass image by Jarno via Flickr

At the moment, most stakeholders lack effectively transparent information. Whether grocery shopping and confronting limited information on ingredient sourcing, or buying electronics of indeterminate origin destined from design for obsolescence, consumers rarely find sufficient information to make better decisions.

The same conundrum confronts other stakeholders, from investors who lack adequate information to truly understand a company’s potential for sustainable success, to policy makers tasked with shaping markets and social structures in an age of increasingly urgent social and environmental pressures.

This is why we see these three calls to action as key to achieving the kind of leadership required to make the change we seek. Here’s what they might look like in action.

1) Improve disclosure mechanisms to better assess, describe and communicate past and anticipated impacts. While great gains have already been made, in no small part through the persistence and collaborative successes of the GRI , IIRC, SASB and others, there are ample opportunities for companies to improve. For example, are key decision-making points mapped in the supply chain? Are buyers and product designers informed of the impacts of different choices at these points? Are impacts tracked and communicated to those who make the decisions? These are just a few examples of how disclosure mechanisms need to be integrated across the business. We are seeing this already in retailers’ supplier indices, such as the apparel sector’s ZDHC). That’s the tiniest tip of the iceberg, albeit a good start.

2) Leverage technology to collect, analyze and distribute information internally and externally. Whether it’s a massive database or a basic app, we have tools today that were unthinkable 20 years ago. Technology can better communicate with consumers, for example through interactive consumer websites such as the Your Questions site for McDonald’s Canada. It’s also changing the flow of information across, into and out of the business, whether by empowering factory workers to share labor standards data in real time, by using Big Data for operations managers to see opportunities and risks previously not visible, or by making ESG data available to investors as many of the agencies outlined in our Rate the Raters research do. Harnessing these technologies to ensure the best decisions possible are made will be a major leap towards integration.

3) Understand how a business fits into a greater whole by being aware of-and ultimately accounting for- both social and environmental externalities. Unlike some of the more abstract financial exercises influencing markets today (e.g. speculation), externalities are based on reality. Recognizing this-painful and complex as reality can sometimes be-is an important evolution for the 21 st century business. In other words, the bees don’t care about a company’s stock price, but a company’s stock price may care about the bees. In which case, their buzz (or the risks if it is silenced) needs to be integrated into corporate strategy.

Bee image by Mike Myers via Flickr

Doing all of the above — improving what, and to whom disclosures are communicated; leveraging technology to effectively signal to decision-makers; and taking into account the value of social and environmental capitals beyond a business’s four walls — comprise leadership in transparency, a fundamental attribute of overall leadership. Such integration has the potential to foster the systems-level adaptations businesses must undergo to thrive in a truly sustainable economy.

Green wave image by jenny downing via Flickr

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