May 21, 2015
This is the first of several posts on the six (6) components of a resonate and effective Sustainability Strategy for Corporate Operations and Real Estate. In particular, I will introduce below some of the advantages of carefully and efficiently developing a CEO endorsed “Vision” for a successful Sustainability Strategy.
Working with more than 70 leading global companies and real estate owners over six years, Sustainability Roundtable Inc. (“SR Inc”) has found that the highest performing enterprises develop and drive a Sustainability Strategy in operations and real estate. Sustainability Strategies take the “noise” of excellent but disparate sustainability initiatives – or even conventional resource optimization initiatives – and roll them up into an organized “signal” that top management, customers, employees, investors and regulators can recognize and reward.
Sustainability Strategies create this positive “signal” through organizing and driving a coherent and pro-active approach that advances alignment with key corporate stakeholders while enabling the tracking and reporting of relevant successes and lessons learned. In general, these strategies include change management processes that are multi-year, milestoned based and explicitly aligned with enterprise-wide objectives. They regularly drive substantial, documented, and progressively increasing annual operational savings while simultaneously building brand through enhanced top talent, customer, investor and regulator engagement around the shared goal of a more sustainable enterprise.
Over these last six plus years, I have had the privilege of being assisted by terrific SR Inc Sustainable Business & Enterprise Roundtable (“SBER”) Advisors. What we have found is that the highest-performing enterprises excel at six distinct components of a world-class Sustainability Strategy. Consequently, five years ago we began to develop a confidential, annual assessment and recommendation process for SBER Member-Clients to ascertain their current state in regard to each of these six components of a world-class Sustainability Strategy.
This confidential annual assessment is aligned with leading sustainability standards world-wide and for several years it has helped us identify for Member-Clients their opportunities for efficient improvement. It has also enabled us to help SBER Member-Client enterprises with the year over year tracking of their internal management improvements and provide an annual confidential, industry specific, comparison to peer enterprises.
Specifically, in addition to our other SBER Charter Member requested management best practice research and SBER vendor neutral Solution Assessments, we have been pleased to help Member-Clients develop effective Sustainability Strategies and track their success in: Vision, Governance, Strategy, Guidance, Implementation, and Results.
Before examining the role and advantages of the first component – Vision – it is helpful to better understand why so many SBER Member-Clients have become excited about rolling up disparate Sustainability initiatives into a Board resonate Sustainability Strategy.
Most Member-Clients have found that a Sustainability Strategy for corporate operations and real estate provides an under-explored opportunity for executives to build on and go beyond a conventional commitment to continuous optimization and innovation. Several SBER Member-Clients had world-class Sustainability Strategies for products and marketing when joining SR Inc but none explicitly for corporate operations and real estate. Remarkably, it has not been unusual for Member-clients to join with: (a) marketing leading enterprise-wide Sustainability Strategies; (b) market leading continuous improvement efforts in corporate operations and real estate; and, (c) no Sustainability Strategy for operations and real estate.
This situation, in particular, creates an outstanding opportunity for these executives to help lead on a high-profile corporate strategy regularly reported to the Board of Directors. Because most all enterprise-wide Sustainability Strategies & Goals – even if originally developed by the product and marketing side of the business – meaningfully depend on impressive and improving performance from corporate operations and real estate. And, indeed, many Member Executives – especially at information technology and service companies – who are operations and real estate executives, help lead of lead the enterprise-wide efforts towards greater corporate sustainability.
Corporate Sustainability as an Unprecedented Opportunity for Operations & Real Estate
Most all SBER Member-Clients have come to recognize that the seemingly always growing interest in Corporate Sustainability is an unprecedented opportunity for corporate operations and real estate. This opportunity is shaped by three related facts. First, operations and real estate have long been responsible for real estate, energy, waste, water, transportation, dining and a great deal of procurement. Second, market leaders in operations and real estate have long sought to make these functions exceptionally efficient. Third, growing interest in Sustainability has prompted the C-Suite, top customers, employees, investors and regulators to become interested in the efficiency of these functions.
Corporate Sustainability, however, demands more than just efficiency in that it also requires a strategic use of an enterprise’s resources and management time to advance an efficient approach in diverse operational areas that ultimately improve an enterprise’s relationship with the communities and environment within which it operates. Moreover, a smart CEO-endorsed Sustainability Strategy will specifically cultivate and substantially reward innovations in operations and real estate that provide breakthrough advances in greater shared sustainability with customers, employees and regulators.
SBER Member Executives have found that this added demand of Corporate Sustainability that requires that efficiency efforts are guided by the compass of Sustainability – so that they advance both efficiency and a more broadly shared interest in greater shared Sustainability – helps corporate operations and real estate move from being perceived only as a “cost center” to being a recognized value creator. Because when this additional demand of advancing greater shared Sustainability is met, corporate operations and real estate suddenly becomes a highlight of the enterprise that is important to better engaging top customers, employees, investors and regulators. This is especially true when innovations in operations and real estate enable an impressive advance towards greater shared sustainability.
SBER Member Executives have repeatedly found that an organized commitment to Corporate Sustainability:
A Vision For Progress & Profit
Fundamental to the success of a Sustainability Strategy is the outline of a clear vision. This vision should be developed with appreciation for the social and environmental relevance of a more sustainable approach to business and reflect an understanding that a more sustainable approach to business should enable a for-profit company to drive a growing margin in an increasingly global and resource-constrained economy. Without enterprise-wide agreement that a more sustainable approach to business must not only benefit people and the planet – it must also benefit the profit bottom line – a Sustainability Strategy will not be nearly as well resourced and successful over time as it could be.
When developing a “Vision” for a Sustainability Strategy, how it is developed and adopted is as important as its content. A savvy and experienced Operating Executive can work with Sustainability Experts to understand what her or his peer companies are doing and unilaterally propose a Sustainability Vision adapted to her or his company that expressly aligns with her or his company’s enterprise-wide vision and mission. Involving the C-Suite and other strategic internal stakeholders as early as possible in the process is mission critical. Smartly coordinated contributions from key external stakeholders will not require endless meetings or undue delay and will create a robust, collaborative, and informed Vision for the Strategy that will help establish the process for verifying the Strategy’s successes that will help justify continued dedicated funding (including funding from savings).
Executives should formulate a sustainability vision for long-term value creation that will enable them to manage risk and best seize opportunities with available human, financial, technological, and other resources. Optimally, this Vision should be personally endorsed by the CEO. To be most effective, it will be a Vision that is:
The topical areas an effective Vision highlights will depend on the sustainability related items that are most “material” to long-term and growing (i.e. sustainable) success of your enterprise. What those are will vary in different industries and at different enterprises (please contact your SBER Advisor if interested in “materiality” and assistance with materiality processes). The following areas are regularly highlighted in Sustainability Strategies focused on – or led by – corporate operations and real estate:
The Initial Draft Of A Sustainability “Vision”
What your particular Vision will focus on will also be shaped by your enterprise’s leadership, history, culture and planned future. But formulating an initial “first draft” proposed Vision for a Sustainability Strategy need not – and indeed should not (at least in the first instance) – involve a “formal” multi-stakeholder process. SBER Member-Clients with only nascent Sustainability Strategies have found it important to have a very small number of executives (2-4) “nominate” the initially proposed draft Vision and then champion what began as that draft through a time bound amendment process eliciting highly targeted input from two to four key influencers (e.g. CFO, Communications, Investor Relations, Risk Management). Then, and only after seeking timely “ratification” from a broader Sustainability Committee (or proto Sustainability Committee), the proposed Vision is presented as a “final draft” for CEO endorsement.
In this way, a proposed initial Vision for a Sustainability Strategy can be developed early to help organize and animate the development of a Governance structure (which we will discuss in the next post in this series). It can and probably should be adjusted later through the multi-stakeholder processes of a more mature Sustainability Committee that is that is ready to execute on a CEO endorsed Sustainability Strategy.
Updating A Sustainability Vision (and adding “Teeth”)
More mature Sustainability Committees can timely develop an organizing Vision or update their existing Vision, as SR Inc has done with several Member-Clients, in conjunction with a new and specific Charter for the Sustainability Committee, the development of select enterprise-wide Sustainability Policies that will be made public as well as an internal Strategy Roadmap that is multi-year, milestone based and reflecting the selected Goals, KPIs, Metrics, Reporting Systems and Implementation Scorecards that the Sustainability Committee has helped develop and prioritize.
In that way, the CEO can endorse a well organized and updated Sustainability Strategy implementing the new Vision. That comprehensive approach, however, assumes a fairly developed Sustainability Committee and certainly warrants a smartly coordinated process with internal and external stakeholders to identify, map and prioritize the sustainability related items that are most material to your enterprise. Indeed, the quality of that multi-stakeholder materiality process will be important to your enterprise’s success in focusing on the items your key stakeholders care most about that will sustainably improve your organization. Moreover an effective multi-stakeholder process will be important to communicating your success because leading global sustainability standards and reporting organizations are increasingly requiring a well documented materiality process – precisely because it is so important in achieving appropriately comparable high-performance in more sustainable business.
Conclusion
SR Inc has found that establishing a clear and compelling Vision for an effective Sustainability Strategy is a critically important step that can win C-Suite support for a profit enhancing Strategy that helps organize and animate efforts to achieve multiple enterprise-wide goals. We look forward to introducing on this blog the other components of a world-class Sustainability Strategy that have been detailed in multiple SR Inc Member Briefings, Member Advisories, and Consultations during the coming weeks. In the meantime, interested Member Executives can access our full report on “Sustainable Buildings & Business: Executive Guidance on Sustainability Strategy for Operations” in our Digital Library and are encouraged to connect with their SBER Advisor regarding any part that is of special interest.
Jim Boyle is CEO & Chairman of Sustainability Roundtable, Inc. (SR Inc). For more than six years, Jim has led full-time teams of diverse experts assisting world-leading corporations, real estate owners, and federal agencies in their move to greater sustainability. Before founding SR Inc, Mr. Boyle advised fast growth technology firms, private equity firms, and institutional investors as an advisor on real estate strategy and implementation, and before that, as a large law firm attorney assisting corporate and investment clients on complex real estate and environmental compliance-related issues. He has led in developing SR Inc’s confidential, sector-industry specific, annual management assessment and recommendation process for more sustainable operations and real estate that is compatible with major public standards globally. Further, he has directed the development of hundreds of pieces of SR Inc original Executive Guidance, Implementation Playbooks, Solution Assessments and Tools to assist SR Inc Member-Clients with Strategy Development and Implementation, Portfolio-wide Energy Management, Energy Procurement Strategies, Renewable Energy (on and off-site globally), Enterprise Energy Carbon Accounting Systems, Building Intelligence Portfolio-wide, Sustainable Leasing Strategy (& Tools), Alternative Workplace Strategies, Employee & Occupant Engagement, Sustainable Procurement, Sustainably Healthy Workplaces, Materials Management and many other areas related to their move to more sustainable business. He is a graduate of Middlebury College and Boston College Law School, who early in his career served as a federal law clerk and as an aide to John F. Kerry in the U. S. Senate.
