Memo to the Boardroom: Start asking the right questions about Sustainability!

Dear Sir

Our Sustainability Adviser has started to speak a different language from the rest of the workforce. It sounds like our native language but is punctuated with strange grammatical clusters such as triple bottom line, carbon footprint, climate change, natural capital, green infrastructure, circular economy, true cost accounting, zero harm and materiality assessment.

It all sounds jolly interesting and something that we should be engaging in, but we are scared to speak to them in case we upset their feelings, don’t understand their response or are made to look stupid!

Can you advise?
The Boardroom

Idiotic I know, but the serious question behind it is whether boardroom members are now obtaining the information they need, in a format they can understand, and in a language that aligns with their problem solving and decision making skills!

Many businesses are striving to become increasingly sustainable, especially in the service and premium brand sectors. Their senior leadership teams understand the rationality and business value behind it and are supporting significant business transformation exercises. Others have, as their environmental management systems (EMS) matured, started to step up from purely resource management to have it play a greater role in the design of products, brand differentiation and asset management.

New-comers in some sectors have seen it as a way of clearly differentiating themselves from established brands, their competitive nature utilising its intangible value and the appeal to consumers in addition to the more familiar technical and financial attributes of business growth.

As the quote goes ‘in business, the competition will bite you if you keep running, if you stand still, they will swallow you.’  Indeed, in many boardrooms, sustainability has become too embedded in the fabric of the business—and too critical for competitive performance—to be left to junior managers and the company’s EMS system alone. As a result, many senior executives are now expected to engage with sustainability issues as part of the day job, and in boardrooms across the globe their strategic view of how sustainability will shape their organisation’s economic future is starting to take its first tentative steps. As boardrooms turn their attention to sustainability issues they are increasingly running into a dialogue problem.

They are increasingly asking questions that seek to ensure that they focus organisational and financial resources on the right issues, but often are confused by the language of sustainability, its constantly changing jargon and how ‘issues’ will transform into operational concerns.

If we are to encourage active boardroom involvement and commitment, because it is undoubtedly the key mechanism to change management towards sustainability and the route to investment. Then communications between boardrooms and sustainability advisers must improve.

Boardrooms need to master the basic language of sustainability and its core trends, but equally many sustainability advisers need help in developing a dialect that can be understood by senior leadership teams – one focused on business outcomes, value and competitive advantage. With a higher degree of linguistic fluency between the two parties, leaders in both camps can make better decisions about how to expand an organisations most successful services and brand initiatives and when to pull the plug on those that will fail future sustainability tests or audits.

From my own experience as a non-executive director on several boards, board directors are likely to obtain better answers if they routinely ask six key questions relating predicted benefits – and to expect six evidence laden replies in return.

So utilise these questions and adapt them when sealing with sustainability issues:

  1. How does this [sustainability initiative] integrate with, and benefit, the core business strategy or annual business plan?
  2. Walk me separately through the Political, Economic, Sociological, Technological, Legal, and Environmental (PESTLE) advantages of this initiative?
  3. Does this investment in time, money and people focus closely on what our customers really want and value? (How much will our customers gain, save or improve, and where does this place us in respect of our competitors?)
  4. What ROI, of both financial and intangible value, will the organisation get from this [sustainability] project?
  5. What does this proposal solve or offer in terms of long term assets or organisational improvement?
  6. What impacts or benefits to corporate culture will accrue? (A nice way of saying ‘what buy in have you got already from internal stakeholders’, and ‘why should the senior team buy into this?’)

By systematically considering each question, a board member can generate an objective and focused conversations about the sustainability issues under consideration, the required management or investment decision, and its resourcing requirements in terms of people and money. In addition to understanding what needs to stop or change.
The core languages of business revolve around performance and value, these questions can help executives understand what value sustainability initiatives bring with them and the performance rewards or risks offset that can be expected, particularly in respect to comparison with competitors. The costs associated with sustainability initiatives or asset performance must remain an important topic in the boardroom, and cannot be swept aside just by emotional argument. They have to be rationally and objectively justified, even when the issue itself is emotive and subjective in essence. Hence also the need to monitor returns on significant projects.

Making these questions a formal part of sustainability discussions can also help sustainability advisors adopt a more value driven position and determine exactly what qualitative and quantitative evidence relating to sustainability issues (and subsequent metrics) will be most useful to the leadership teams.

So perhaps the reply letter will read in response:

Dear Boardroom

There is never a ‘right’ answer in sustainability challenges, but boardrooms can start the communication process by asking the ‘right’ questions of their internal advisors.

As for the language issues, many sustainability advisors need more time spent helping them to understand the higher level management processes that you are so familiar with.  Give then your active support and provide mentoring to help them position your business sustainability issues clearly into the organisational context. You will soon see the benefits that arise when it is truly integrated into other business systems, and how real financial, reputational and process value can be obtained.

Finally, talk to them beforehand about sustainability issues of genuine interest that are on your corporate radar. Slowly the language barriers will begin to disappear.

Keep up the challenge!
Yours sincerely
Leading Green

At Leading Green, our approach to sustainability in business consulting encourages our clients to look closely at their own internal leadership strengths. Helping them adopt an inquisitive state of mind and supporting them in how sustainability can support their long-term business strategy.