Is ‘Sustainability’ Starting to Bite?

Time to sharpen your claws, toughen your skin, and amp up your diplomatic and collaborative skills ‘to eleven’ if you’re embarking on a journey to sustainably reconfigure your organisation, its offering, and how it thinks, breathes and behaves. How should we handle the inevitable bite-back when the introduction of sustainability begins to rattle cages?

In recent weeks Unilever received a broadside from one of their larger investors who despaired at their commitment to pursuing a sustainable business strategy.

‘Fundsmith Equity Fund, has branded Unilever’s focus on sustainability and brand purpose as “ludicrous”, claiming the strategy led to the FMCG giant’s underwhelming performance last year. Their criticism highlighted the stance being taken relating to a number of the brands, including Unilever’s decision to define a brand purpose for Hellmann’s mayonnaise stating “A company which feels it has to define the purpose of Hellmann’s mayonnaise has in our view clearly lost the plot. The Hellmann’s brand has existed since 1913, so we would guess that by now consumers have figured out its purpose (spoiler alert — salads and sandwiches).” The conclusion in appraising this approach was “Unilever seems to be labouring under the weight of a management which is obsessed with publicly displaying sustainability credentials at the expense of focusing on the fundamentals of the business.” (Extracts from Marketing Week – 12/1/22)’

Such ‘straight-talking’ from the investment community provides an ideal opportunity to respond with much more than a defensive statement. Those who lead and champion sustainability need to drive a deeper and more reciprocal engagement if they’re going to overcome such misinterpretation and knee-jerk ridicule from investors and shareholders. Here’s a chance to challenge hardened, exploitative aspects within the raison d’etre of business thinking and secure a lasting change to how businesses function and evaluate performance.

Here are a few suggestions to consider when tackling this type of scenario;

  • Clarify what the new ‘fundamentals’ of business actually are. It’s time to consider what new elements and measures need to be introduced to not only deliver profitability, but business success that also fulfils sustainable goals and creates a symbiotic prosperity across the wider stakeholder environment. There’s a chance to rethink business models and who benefits within both the micro and macro environments in which the organisation operates.
  • Embrace the new ‘Green Claims Code’ (that goes live this month – January 2022), investing time in reviewing your sustainability claims and the infrastructure through which your whole offering passes. Think about new systems and platforms – e.g. blockchain used by Tex Tracer within the fashion/clothing sector – that provides evidence and verifies sustainable sourcing, supply chains, manufacture and delivery of materials, products, and services. Make a commitment to not engage in ‘greenwashing’ by removing misleading claims and vague references, and take the time to demonstrate your proven sustainability credentials with the appropriate endorsements supported by evidence and a transparent, clear, hyperbole-free narrative.
  • Introduce attribution linking business activity with impact on the environment and climate. Using data sets and insights supplied from the scientific and academic specialists dedicated to monitoring climatic change and the impacts of ‘man on the environment’, so new performance reporting can beging to redefine and present an organisation’s success in wider terms instead of just a traditional financial balance sheet.
  • Advocate and drive culture change not just internally, but across the stakeholder, supplier, market and customer environments. Don’t just rely on straplines or a light narrative, but build a deeper stakeholder engagement approach armed with the data and evidence to design infrastructure, processes and measures that your stakeholders can agree on, articulate and implement. Using the seventeen UN SDGs (Sustainable Development Goals) is a handy starting point to help set the benchmarks for performance measurement. e.g Walgreens/Boots already use these to categorise and align their CSR (corporate social responsibility) commitments, demonstrating their contribution towards the global outcomes.

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