Sustainability issues are often political and moral ones. Within this, companies try to ask themselves the questions on what are their duties in terms of it.
Sustainability means different things to different people. It will depend on the culture, religion, geographical location or the value in supply chain. Some people also believe that we should explore what our values and act in accordance with them.
Everything starts with setting the right values.
Regional varieties and obligations however are challenging. This is raising many questions. for example, how businesses operating in many areas should address all the issues?
Universality is not easy.
Acting only accordingly to our own values cannot be very flexible. Ethical and health and Safety concerns could be different for different regions. Therefore some flexibility may be necessary. Some companies prefer to address the subject on the "case by case basis" and evaluate what is really needed depending on the situation.
The challenges are very substantial.
Companies are still at the early stages of learning the process. Main obstacles are fearing the costs, ability to set suitable targets, measuring the progress and link to financial impact.
Many blame the business management for lack of understanding the concept of sustainability and what its development means to an organisation.
The above issues mainly come from two factors:
1) lack of clarity and definition in terms of expectations towards the environmental and social responsibility issues
2) potentially, deep cultural business changes are required and this can be a really tough to do
We are now going to think on what is standing on the way and these need attention by the businesses.
Leadership
Sustainability issues are often linked to marketing and Public Relations departments in organisations. More over, in many companies no-one has overall responsibility for sustainability management. It is proven the major factor allowing to fail even the start of sustainability subject in the company.
Without proper board management, sustainability efforts will fail and the senior management buy-in to the efforts is crucial.
This tone from the top is all important.
Supply chains
Supply chains become more global and their sustainability management becomes a global concern. Too few businesses view supply chains as any area for attention. There is also an area of competition operating in less regulated environments, therefore applying sustainability standards can be a major challenge.
Many suppliers also add additional difficulty. Talking hundreds or thousands of suppliers seems like an immense activity.
Additionally, supplier responses are not clear and not straight forward with such resource intensive activity.
Despite all these complications, attention to supply chains can be beneficial. Sustainability issues can provide new opportunities. Many times, it is an opportunity to awaken and educate suppliers to ramp up their standards. Better relationships, better products and better control of price can be created.
Reporting
Too many companies do not report on their sustainability efforts. Many still try to ask themselves the question on what to report and measure the progress. Many companies performing improvement activities in the direction, but do not call it sustainability. However those who put their environmental and social accountability promises should monitor and check whether it is actually done. This is because it keeps them accountable and give credibility. Reports generated will be an interest not only for employees, but also government, regulators and, of course, consumers.
Businesses, however, are faced with the challenges of setting KPIs, developing reporting tools, measuring the performance and meeting reporting needs of different stakeholders.
It is true, that setting suitable KPIs can be tough.
several organisations found the way on reporting standards from ISO14000 to AA1000.
Developing processes
Sustainability requires efficient processes and structures. The challenge is that environmental and corporate values were not applied in the past.
One way to do it is to integrate financial, environmental and social goals to be successful. But creating such behaviour throughout the company is not straightforward. Often it appears a major challenge for middle management to meet their targets and it does not appear to be a serious priority for them. This issues need new skills and ideas and therefore communication and raining is imperative.
It is also argued, that for efforts to be successful the sustainability should not be a subject only of the PR or development department, but be embedded in the processes of all parts of the business. It will take time for businesses to acquire this skills. This is including understanding of all business departments that accountability lies with everyone.
Establishing financial impact
Companies who believe that they can do well on sustainability are generally seeing better financial results. Many companies still argue, however, that the benefits are minimal.
The link is difficult to demonstrate numerically. But the truth is that if the business does not see itself being sustainable, it will most likely not be successful.
On the other side, many points out, that good behaviour does not cost much and sustainability efforts in the right direction can bring savings to the organisation.
concerns about the cost of implementation is still an issue. Therefore, it should be considered as a long term investment. But companies will often take pragmatic view on the issue. Often, they will monitor the activities of their competitors and if they are proven to bring results, they will follow the path.
Reputation
Companies who value their reputation as 'very important" will consider the sustainability subject more seriously. Often companies see the efforts as a way for attracting customers. An important priority here, however, is reporting to its stakeholders.
Reaping the benefits, its not wither easy or straightforward. Many companies use sustainability as a public relations tool. But pursuing good reputation is bad business strategy. Reputation also puts certain pressure on businesses that can be difficult to maintain. Therefore, reputation should not the the priority, but treated as a side effect of sustainability efforts.
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