A (not-so) funny thing has happened since the start of the pandemic: sustainability has taken on new urgency and became a must-have rather than a nice-to-have.

Recycling and tree planting are often now just footnotes. Instead, annual report headlines publicly announce measurable commitments to having net-zero waste, making significant reductions to their carbon emissions, and taking specific steps to support biodiversity and promote circularity.

So why the change? Some businesses are subject to new regulations that require engagement by all parts of their supply chain to comply. Others are hearing calls from their employees, investors, industry associates, and customers that they can’t ignore. Whatever the reason, the activities that previously had been relegated to a marketing brochure have become a compliance and strategic business focus with C-suite attention—even for the smallest and leanest of companies.

But if your company doesn’t yet have a well-articulated plan or if your commitments are outdated, these new requirements might seem daunting. Improving your sustainability performance doesn’t necessarily mean gigantic leaps; you can take smaller incremental steps to create momentum and incite change. At the end of the day, doing something is certainly better than doing nothing at all.

Reconsider and update your strategy with these four steps.

Step 1

Many classic business models suggest that you baseline where you are now, but I think that’s backward. Instead, imagine your potential and dream big, taking into consideration what your colleagues in your industry have announced and what will be necessary for you to stay competitive. As Project Drawdown—an organization with a goal to stop the increase of greenhouse gases in the atmosphere—reminds us, 2040 or 2050 goals are good, but reducing our impact in the next several years will have positive climate and biodiversity multiplier effects for the future.

Step 2

Once you have your vision, you can baseline where you are today. Determine what gaps to fill, figure out the quick (and energizing) wins, and identify the lapses in your data collection methods that require near-term investment.

Step 3

Build a strong, multifunctional team to map how to achieve your goals. Prolific business writer and Harvard Business School professor emeritus John Kotter has written extensively about why transformation efforts fail. Chief among them is not building the right team with the ability to work across lines. Top-down and bottom-up efforts tend to fall apart unless they are spearheaded by a broad spectrum of key players.

Step 4

Get your people involved, engaged, and behind your plan—your employees, your customers and clients, your suppliers, and partners. This collective focus can and will help build momentum. Communicate your strategy and your goals, and measure and celebrate your successes together.

When you get right down to it, sustainability is about redefining our use of natural resources: direct fossil-fuel-based materials, that run our production facilities, fleets, and supply chain partners’ vehicles; and indirect fossil-fuel-based materials like water, fertilizers, irrigation, packaging materials, and production waste. North America, western Europe, and the affluent economies of the Asia-Pacific use a greater load of resources than the rest of the world combined. Reducing resource intensity is key not only to minimizing its environmental impact but also to saving money and reducing the cost of goods sold.

Every production process has some slack in it. But this slack, or leftovers as I like to call it, is our globally important untapped resource. When we define leftovers as unusable waste and simply discard them, there are significant environmental and cost implications. Alternatively, if we define leftovers as a resource and build a circular process to capture their value, we stand to gain a lot of advantages, and not just environmentally. There are plenty of business benefits as well, especially since the alternative is to be left behind.

This is not to say that building circular processes is easy. It would have been done already if that were the case. Creating or buying circular products requires a new way of thinking among stakeholders (not just the internal drivers of change), yet this approach is rarely incentivized or rewarded in performance evaluations—in part because results often can’t be achieved within a few quarters. Firms usually have broad sustainability targets but  insufficient circularity goals, and most aren’t tied to profitability (e.g., 75 percent of our profits by 2030 will come from circular purchases).

Circularity initiatives depend on close collaboration, but firms lack support from suppliers and key internal departments, especially supply chain and procurement, whose goals have typically been narrowly defined as getting the products in the quantity they need, on time, and for the lowest price. These goals are often set and fulfilled without regard to sustainability or maintaining supplier relationships to secure goods and reduce friction over time.

Beyond a failed collaboration within an individual company’s processes, there’s also a lack of a coherent ecosystem of peer companies, suppliers, industry consortia, technology and data partners, NGOs, and regulators aligned around a shared ambition. But this isn’t because it’s not possible. For instance, in the food service industry, companies like Sodexo, Compass Group, and ISS have been sharing ideas for fixing issues around packaging and single-use disposables for food and beverages, providing a service to the industry at large as well as supporting their own companies’ efforts to reach zero-waste goals.

As you set your goals, aim high. Think about what innovative leaders do:

• They define their stakeholders, understanding that each has needs that must be met for them to engage.
• They set specific revenue and performance targets.
• They leverage their partner ecosystem to generate new ideas, develop solutions, and create mutually satisfying results.
• They form or join precompetitive coalitions to invest in infrastructure development so the networks mutually reinforce growth.
• They incentivize departments with collaborative KPIs to achieve these goals together

At the end of the day, sustainability is going to be imperative for business growth and success in the coming years, if only because there is an increasing generational concern—even anxiety—around preserving natural resources and ensuring social responsibility. Millennial and Gen Z consumers are willing to pay more for products and services that don’t harm the environment, and they want to work for companies with a similar commitment. Even still, some corporate managers continue to view environmentally conscious actions and purchases as driving up costs rather than driving value, which in so many cases would actually save them money. But if you really want to increase your value to consumers, boost your sales and profits, and reduce your costs, a sustainability strategy and focus is the way you must go.

TAKE ACTION:
Analyze your current business strategy, and set at least three sustainability-driven goals you can start working toward today.

About the author: Simon Elliot is managing partner at boutique advisory firm 4xi Global Consulting, including their Sustainability Simplified^© practice. He’s focused on helping organizations with establishing, maintaining, and executing upon their sustainability strategies. Simon lives in the San Francisco Bay area and is passionate about how we can all make a difference in reducing our footprint on the planet, nurture, and protect Mother Nature for many generations to come.