The ten most common challenges sustainable businesses face were presented in a previous article, “Top 10 Sustainability Hurdles for Businesses in 2013“. Last week, we discussed getting over the first five hurdles in “Overcoming Business Sustainability Hurdles – Part 1“. This is the second part of the series and explores overcoming the remaining five hurdles.
6. Companies have difficulty discriminating between the most important opportunities and threats on the horizon.
Numerous threats are looming for business—from financial crises, to climate change, to local land issues, to health pandemics. It is difficult to judge which of these risks warrants attention, and often more challenging to prioritize them. Businesses need guidance on how to evaluate the materiality of an issue, both for disclosure purposes and for strategic planning. To begin a sustainability focus, simple is better, and less is more. Equipped with an understanding of which risks and opportunities are most material to their organization, managers can then prioritize material issues, translate them into internal strategies, and communicate them to stakeholders.
7. Organizations have trouble communicating their good deeds credibly, and avoid being perceived as greenwashing.
Claims made by some businesses and Non-governmental Organizations (NGOs) regarding sustainability are perceived to be credible, whereas others are met with skepticism or disbelief. The different reactions are likely related to attributes of the organization making the claims—its size, structure, actions, or motivations. Even leading businesses are wary of touting their successes, as such communications can invite public criticism for the things that they aren’t doing. Companies want to know how to communicate their message credibly, so the integrity of their efforts is clear. This issue is critically important as most of the benefit of Corporate Social Responsibility (CSR) activities can depend on whether stakeholders believe the message to be truthful. One manager noted: “Polls show people consider academics and NGOs more credible than corporations and government”.
8. Organizations need to have a better understanding of the people within the regions where they are conducting business.
Organizations need to understand the regional perspective on sustainable development—which extends the traditional view of sustainability in resource development beyond the environmental, social and economic pillars to include more local community dimensions. This understanding may inform the business community of new approaches to sustainability and stakeholder engagement, both within local communities and outside of them.
9. There is no common set of rules for sourcing sustainably.
Businesses want to purchase products and services that are environmentally and socially responsible. But the process of identifying sustainable suppliers is not always straightforward, and the means for comparing products is not always obvious. Sustainable sourcing decisions may also require industry-specific knowledge and practices, or data that just may not be available. Identifying a set of best practices for sustainable sourcing would provide organizations with targets for benchmarking as well as guidance on managing their supply chains. It would also yield an opportunity for leading businesses to showcase their good practices. Sustainable sourcing is not just about sustainability—it is also about managing and mitigating risks. This issue is clearly one in which the business case and societal good are aligned, and yet many businesses remain perplexed about how to manage their supply chains sustainably.
10. Those companies that try leading the sustainability frontier often end up losing.
Leadership in any field – sustainability included – carries with it some clear rewards. For instance, leading organizations can attract new customers and foster loyalty with employees and community stakeholders. But there are also risks associated with being on the cutting edge. When you are on the leading edge, an unrealistic burden of proof is put upon the activity and insinuation of motives appears.
The bottom line, yes, there are hurdles but taking small steps and making sure there are regular reviews of the program to tweak ineffective activities or redirect the focus is key.