Tag Archives: #sustainability #business #sustainability in business #leadership #environmentalleadership

Why I am tired of the statement ‘Our people are our greatest asset’

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People like plants need more than a basic environment in which to thrive

(2 minute read)

As soon as I see this statement in CSR reports, on websites and in marketing statements, I immediately dig deeper and look for positive proof that the statement can be backed up. I am often disappointed!

This phrase is at risk of becoming a modern day cliché, and any CEO tempted to use it should ensure that they have satisfied themselves:- firstly that the organisation has put a bit more thought behind the phrase than just good PR, and secondly that they personally have an understanding of organisational reality at shop floor or operational level.  In fact I often recommend to organisational leaders that they leave the safety and power-interactions in the C-suite and spend time regularly engaging with the workforce …… in listening mode!. Go out and listen to what they are saying, it can be tough but rewarding. Why? because it is common for less than 20% of a workforce to feel ‘engaged’ with the organisation and its existing leadership group.

Whilst it is without question important for employee’s to ‘hear’ a CEO express such a statement, it means nothing unless they ‘feel’ it in their employment or more importantly ‘know’ it in their interactions with their leaders and managers.  That’s the true route to having an engaged workforce. 

Sustainability means different things in different market sectors, but employee relationships are common to all businesses, and the way in which an employee feels they re ‘valued’ is not just a financial relationship. It can involve many tangible and intangible factors – the organisational culture, how the organisation aligns with their own beliefs and values, and the manner in which the business treats them and wider society – especially in the knowledge based or innovation driven employment sectors! This often determines whether the intangible factors of their goodwill, support, loyalty and ultimately presence are sustained or lost.

An active leadership approach to sustainability within organisations helps employees engage better with the organisation and to feel alignment with it. The best way to demonstrate ‘value’ (rather than state they are valued assets) is to explain directly how the work they are doing is appreciated and important to the business. Take time to research how their contribution fits into the larger picture, and by investing in their growth, engagement and satisfaction.

Reflection point: Do your employees ‘know’ and ‘feel’ your organisation’s core values, and are they aligned with your sustainability objectives?

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 At Leading Green, our approach to sustainability in business training & consulting encourages our clients to look closely at their own internal leadership strengths and goals.  Helping them adopt an inquisitive state of mind and supporting them in how sustainability can support their long-term business strategy. 1

Stranded Assets: Why Sustainability Scenario Appraisals are now part of smart business practice

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Two monthas ago I posted a Linked In article identifying how fighting natural disasters is increasingly becoming ‘business as normal’ for some industries faced with increasing climate change impacts. The case study concerned the Pacific Gas and Electricity Company (PG&E) and their mounting liability ($billions) arising from wildfires linked to network infrastructure.

It was with regret that I read that PG&E had filed for Chapter 11 bankruptcy protection in the US after being brought to its knees through mounting liabilities for wildfires and the deaths of over 100 people.

In August 2017, Hurricane Harvey hit southern Texas killing as many as 60 people, and caused damages as high as US$180 billion across government bodies, businesses and property owners. In addition, the hurricane shut down, damaged or destroyed Texas energy operations and related businesses. The final bill was estimated at up to 1% of US GDP.

The point in my original article was about how smart organisations, especially infrastructure asset management businesses, are starting to take real note of sustainability risks, notably Climate Change and Megatrends, and had started to incorporate them into thier Enterprise Risk Management portfolios, particularly via futurecasts (looking forward) across various anticipated scenarios. This approach integrates well with marketing and business planning activities where an open commercial mindset is applied. It tests future business strategy, assumptions and investment, but just as importantly it can uniquely identify redundant processes or future ‘stranded assets’.

Asset heavy state and private businesses, often effectively monopolies in terms of the business and customer base are most at risk of encountering this risk. Why? because thier comprative size, thier longevity, lack of real competition, and at times leadership complacency that significant competitive barriers to entry exist can lead to a false sense of security.

Stranded Assets

Stranded assets are assets that suffer from unanticipated or premature write-downs, devaluations or conversion from ‘asset’ to ‘liability’. Stranded assets can be caused by a variety of factors (climate change, policy transfer or societal concern) and are a phenomenon inherent when a company starts to focus internally rather than externally in its search for innovation, market intelligence and forgets to repeatedly ask itself ‘Why do I exist?’. Rapid technology or sociatal value changes in several technology sectors are evidence that it can happen across many market and service serctors. Leaving previously successful companies behind newer entrants, leaving them asset heavy and effectively market redundant in a previously regarded secure sector. Stranded assets can pose a significant risk to shareholders, organisations and the communities within which that business operates as it can effectively wipe out a business’s commercial viability as the balance sheet tips over towards liabilities and the investment call required to catch up with competitors becomes unsustainable as debt. Many coal based supply & generation resources, and other hydrocarbon-based indutries, now have the potential to become stranded through climate change as the world engages in a fossil fuel phase out.

For the financially minded it can be summarised quickly as a once valued asset that is not performing well in the marketplace but which must be kept on a financial statement in order to record a loss of profit!

A recent report by the NGO Climate Tracker outlined that the increasing competitiveness in renewable energy costs and the price drop in energy cost to consumers will leave $60 billion of coal burning plants in Indonesia, Vietnam and the Philippines ‘stranded’ within 10 years. In Indonesia alone it identified $34.7 billion of stranded assets if policies were brought in to meet the goal of the Paris climate agreement to restrict global warming to less than 2°C.

Sustainability Scenario Analysis

Sustainability Scenario analysis is a useful starting tool for forecasting the potential liabilities and implications of sustainability issues, megatrends and in particular climate change on a business’s asset management strategy, its future investment scenarios and operational practices as a business and as a leadership tool through which to stimulate longer term scenario and strategic thinking. At a leadership level it starts to prompt a movement away from the concept of the ‘effeciency of the existing process’ towards a more sustainable ‘effectiveness of the future outcome’.

This blog is part 1 of a longer discourse on sustainability strategy in business and scenario analysis

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

Innovation is at the heart of Sustainability

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There are some great media stories out there extolling the steps that a company or brand has taken to minimise single plastic usage.  Some are small scale in their impact, but others will have a significant impact on plastic usage, amounta leaving via the factory gate, and its potential after consumer use to enter the environment as waste.  These are great stories and actions that hopefully will become ‘business as normal’ in the future!

One element that has fascinated me, during all this, is the range of alternative solutions and strategies that have emerged.  The challenge of reducing single use plastics has obviously released a lot of innovative thinking within these organisations. 

So, why had no-one released this innovation earlier? Why had it taken these organisations so long to wake up to the possibility of reducing plastic usage within their systems?

A key business driver for sustainability is challenging and changing established practices or beliefs that this is the only way to conduct a business, drive a process or use a material.  Sustainability leadership has at its core the need to ask questions that nobody at first can answer and to stimulate answers to problems nobody had questioned.   It is closely integrated with innovation, and when practiced as a business tool stimulates innovation internally or across supply chain partnerships.

So why don’t business harness and seek to create opportunities to release this inherent innovation more often within their organisations.  The answer I feel is that sometimes they don’t realise it is there or that it is centred in distinct parts of an organisation that has ‘defined innovation’ areas. 

What is important to me within these single use plastics initiatives is that the innovation probably arose internally through debate within a wider pool of employees than normal, it probably brought different players into contact and required organisational silos to interact and work more closely together.  Sustainability issues are notable for being trans-organisational – that is what makes a sustainability managers life so difficult at times. 

But look at the outcome of this innovation.  The internal workforce has been presented with a challenge or has sought to solve an inherent risk by coming forward with solutions.  This has probably had a positive impact on those involved, a clear sense that they are ‘doing good’ in terms of aligning their values with how they want to behave, a reinforcement of how they expect their employers to behave, and externally how customers and society feel they should behave.  In bringing this forward thier innovative solutions into the marketplace they will have been supported by the businesses’ leadership group, and everyone is feeling good about themselves.  An ideal ‘I Win – You Win – We Win‘ scenario that has then pounced upon by PR and Marketing teams as a positive story to take out into the marketplace.

The next step I hope is that these initiatives reveal potential cost savings and data on how much plastic usage has been offset from environmental escape.  I would also like to know how many Environmental Management Systems had paid previous attention internally to plastic usage and how many had ignored their external impact altogether…. perhaps for another blog!

What I do want to conclude on, is that here is a clear example of how seeking to enact sustainable solutions can galvanise organisational innovation and bring forward new initiative to take out into the marketplace.  They were faced with an uncomfortable truth over their products association with single use plastics, they thought about it and took positive action and the marketplace welcomes their innovation.  Becoming more sustainable hasn’t rocked the boat, hasn’t caused investors to man the life rafts and no one has dies of leadership shock by taking a risk in changing direction.  In contrast the staff are feeling good about themselves, their company and what they have achieved. Internally the initiative has probably brought new internal; teams together to solve a challenge and has given these companies a great story to add to their brand and marketplace communications. 

So, my Big Question is: Why aren’t organisational leaders utilising sustainability more as a business driver to challenging their staff to achieve further sustainability outcomes if the outcomes can only be beneficial?

The issue of plastic waste isn’t new.  The five oceanic gyres hadn’t developed overnight, and environmentalists have been raising concerns about Man’s plastic usage and the environment for years.  So why has it taken so long for action to permeate the strategic tiers of businesses?

Sustainability has the potential to galvanise innovation within and across businesses, it provides a positive culture for business expansion and a repositioning of brands within the marketplace.   

So, business leaders try setting a sustainability challenge to your organisation, a problem that needs to be solved or a resource that needs to be reduced.  Something that can deliver a reputational boost to the brand and that attracts consumer attention, but most of all something that stimulates innovation across the organisations

If you want innovation, give sustainability a try!

Leading Green offer a range of ‘brainstorming’ workshops for leadership teams and wider organisational groups, helping them address and focus on sustainability issues, priorities and future pathways. Contact ross@leading-green.com to see if we can help your organisational needs.

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.

Getting Green Done ……

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I was amazed as a young environmental colleague lamented the lack of success, she had had recently in presenting her CEO with a new sustainability initiative.

‘He threw out most of my proposal and gave me only 30% of what I wanted!’

The initiative was wrecked, she was down-heartened, she had embarrassed herself, and her enthusiasm was now at a low ebb through disappointment.  It had been a bold initiative, it had matched her vision for what the company could achieve, had aligned with their new sustainability policy and could have delivered real business value.  The whole initiative reflected well on her and the career training she had received to date. 

‘Wow! I was thinking, 30% – that’s just great as a first step I mused, but in her disappointment, I sensed the frustration that many graduates today in the sustainability field feel when entering the workplace.  They leave their institutes with high expectations and run full tilt into the operational realities and encounters that are so common in organisational bearpits.  What was once so clear and rational in the classroom becomes murky and complex when it must be delivered through workplace colleagues.  Organisations just don’t act as rationally as sympathetic classmates with shared worldviews on sustainable development. ‘We must do this’ becomes quickly challenged by ‘Why must we do this?’, ‘But….’, ‘Perhaps when we have the time and money!’ or even a stonewalling ‘No!’. 

It took time to explain to her that I was impressed and pleased for her, that 30% success is not failure but success when you are trail blazing!  For after two decades in corporate environmental risk management and sustainability you learn that any advance or step forward is a good win. 

In sustainability, we are first and foremost business change managers, our role is to ratchet up organisational performance, to deliver value outcomes and to continually progress ‘getting green done’ within organisations.  There are very few ‘Look at Me!’ and ‘Aren’t I Great!’ moments for many environmental professionals within organisations. 

Personally, my greatest inner satisfaction comes from watching others adopt sustainability thinking into their work because it now makes strategic sense to them, aligns with new business direction or reinforces a strong organisational culture with a new worldview.  That is my reward. We all like success and the recognition of high performance by our peers, but when your leadership is enacted via changes in the behaviours of others don’t be surprised if it is overlooked.  Remember that people rarely own up to changing thier past opinions. 

It was clear that her CEO had been supportive and had giving her a chance to progress her initiative but had yet to be totally convinced enough to give her the whole package.  She had first to deliver on this element before any further funding or support was granted – a clear pragmatic leadership decision.

We all need mentors in our professional lives, colleagues who can guide us through the organisational minefield, suggest alternative ways forward and pick us up when we are downhearted or discouraged.  It took time to show my colleague that her disappointment in the meetings outcome was unjustified and had in fact been a win.  She had set her heart on 100% success, her CEO in supporting her had granted 30%.

So now we have started work on ensuring that she does successfully deliver on the 30% she has been entrusted with.  In doing so, we are working out what her strategy will be and how she will bering on other colleagues to gain the next 30%, and the 30% after that, and the 30% after that ……until she wins over the CEO and gets his full backing for her vision. 

So, don’t expect 100% success overnight, building a sustainability foundation within an organisational culture involves a slow but continuous ratcheting up of performance over time.  It is a marathon, not a sprint and that ultimately success is in…just Getting Green Done!

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Note: I have happily borrowed the phrase ‘Getting Green Done’ from the book of the same name by Auden Schendler, Vice President of Sustainability at Aspen Skiing Company. It is a useful read for sustainability professionals enetering any work sector.

‘Consume less’ to save the Planet or ‘Consume more’ to save your Economy

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Photo by Skitterphoto on Pexels.com

A political and economic paradox, but a paradox that is currently operating in the UK.

Over 2/3rds of the UK’s GDP depends on household consumption.  Whilst this helps to explain the resilience in the economy to Brexit chaos and most post-war UK recessions, as exports and investments are relatively minor components of current GDP.  It stands against us as a measure of UK future economic sustainable development.

In contrast, what does cause economic recession in the UK? – when we consume less and when we save more!

Both issues raise questions about how business & sustainability professionals address future ‘growth’ strategies.  There are many UK businesses whose leadership have committed their organisations towards responsible leadership practice and the integration of business sustainability within their core strategies.  These actions are to be praised and applauded as they form the keystones of the UK’s commitment to a greener business economy.

However do we truly believe that the next phase in sustainable development is sustainability modelled around continued rises in household consumption?

Increasingly consumers now demonstrate greater awareness and response to what they spend their incomes on, and how they view ethical brands, sustainable goods and services. This is great news and is helping to demonstrate the growth and value benefits to businesses of responsible leadership and sustainability in businesses. However, consumers are also not letting up in their desire to spend and acquire more. We are purchasing smarter but we are still purchasing more than we need, and save less than other European nations.

We are still decades away from getting to grips with a circular economy or one that is sustainably balanced in terms of inputs and outputs.  However, there needs to be a bridging phase during which we embed more sustainable business models into the economy, coupled with policy & societal models that:

  • incentivise households to save towards a longer life expectancy
  • incentivise household savings towards the purchase and implementation of sustainable household infrastructure – renewable energy, lower carbon construction outcomes, reduced ecosystem service and impacts) that offsets living costs
  • offset household consumption on materially unsustainable goods or services that have a higher than desirable impact on ecosystem services or climate change.
  • incentivise the UK’s trading balance towards the growth in export of goods and services that promote a greener global economy, and
  • address the deep structural cracks that current economic policy will have on tomorrow’s economy.  It was a great model whilst you couldn’t see the forest for the trees, but now that the forest has been cleared to the size of a coppice we need some new economic ideas and practices.

If economic theory is logical, and political economic science rational – how can a society, such as the UK, develop more sustainable economic indicators, be encouraged to pursue these through more stable economic models and to promote household sustainably over  household materialism.   Where is the economic leadership that allows us to switch tracks from GDP Key Performance Indicators based on unsustainable consumerism to those more suited to the realities of the future?

Individuals and businesses are capable of great innovation but future recession beating policies must accept that you cannot enable sustainable development through mass consumption, and that household savings can ultimately contribute to societal sustainability.

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.

Contact ross@leading-green.com