HOW TO MAKE SUSTAINABILITY GREAT

This article looks into sustainability, net positive futures and how to make sustainability great.

mount fuji

There are a number of stages that businesses pass through on their sustainability journey.

Early sustainability efforts are often focused on corporate social responsibility (CSR). These are philanthropic efforts where the company lets their staff volunteer in the community, or invests in worthy projects. This is certainly better than doing nothing, but there is still a lot of room for improvement.

The next stage is a bolt on sustainability stage. This is where companies build up an internal sustainability apparatus, but gives these people limited opportunities to change the strategic direction of the business.

In the next stage, companies progress to embedding sustainability within their business strategy. This is a very advanced level of sustainability. It involves the company choosing to not do things that are damaging and actively looking to create value in a way that is both socially and environmentally sustainable.

Up until recently embedded sustainability would have been considered to be the gold standard of corporate sustainability. Businesses that would have achieved this level would have had nowhere further to progress to.

But this is no longer the case. The Net Positive Project have raised the bar and there is now a new top tier of corporate sustainability. This is reserved for businesses who are committed to creating a net positive future. This means that they are not just committed to reducing all of their negative social and environmental impacts to zero. But they are committed to going into the marketplace and actively making the world a better place. The aim is to create value for all of a company’s stakeholders.

This is a much more inspiring message than the commonplace notion that sustainability is about “being less bad.” Companies that are committed to creating net positive futures aspire to be good actors. Whilst it may only appear to be a small difference, in practice it is dramatically different.

This is what needs to be done to make sustainability great. Compliance is simply not enough, it doesn’t stimulate enough change fast enough to deal with many of the pressing social and environmental problems.

CSR activities, although worthwhile often bare no resemblance to a company’s core business activities. It would be much better to leverage their core capabilities to do good in the marketplace.

For companies that are stuck in the bolt on stage, they need to place more emphasis on integrating sustainability into the overall business strategy. It is also not good value to hire a sustainability team only to not act upon many of their suggestions.

For companies in the embedded stage, the key is to think bigger and to think more systematically about how they can create value through sustainability. This includes looking at the business model they employ and seeing if a circular business model could be used instead. There are big opportunities from taking a systemic approach.

One opportunity is that through leadership in sustainability, your business could become the leader of a movement. Simon Mainwaring has a great video on how this works, which you can find via the link below.

Simon Mainwaring on Becoming a Movement

If you are the CEO of a company, then stretching the boundaries of sustainability and developing a net positive approach will mean that you are perceived in a different light. Take the outpouring of thanks and congratulations that was directed towards Paul Polman after he recently announced his decision to step down as CEO of Unilever. I found the article by Richard Edelman which you can find via the link below to be particularly striking.

PAUL POLMAN – THE CEO WHO CHANGED CAPITALISM

What you need to know

This article looked into sustainability, net positive futures and how to make sustainability great.

We looked into the various stages that businesses pass through on their sustainability journey. This used to begin with CSR and end with embedded sustainability. But this has now been surpassed by businesses who are committed to creating net positive futures.

Businesses who are committed to net positive futures reorient their activities towards creating value for all of their stakeholders. It is about having a regenerative approach, systems thinking, circular economy business models and actively trying to make the world a better place. By doing this, these businesses can lead a movement that benefits them financially by inspiring their customers and employees.

Incremental approaches and approaches that lean too heavily towards compliance simply aren’t good enough. These approaches are not getting us to where we need to be fast enough and there are much more effective and inspirational ways of operating. To make sustainability great, businesses should develop a net positive approach. There has never been a better time to demonstrate leadership in this area.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below or reach out to me on social media. What do you think needs to be done to make sustainability great?

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

BLUE OCEAN STRATEGY – KIM & MAUBORGNE

This book review  looks into Blue Ocean Strategy by Kim & Mauborgne. I had known about this book for some time. I was aware of the many copies it had sold and that it was responsible for coining the term Blue Ocean Strategy. Sometimes I think non-fiction books that have sold millions of copies can be over hyped, but this book is not in that category.

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This book is a treasure trove of good ideas and insights for how businesses can think differently about strategy and ultimately, be more effective.

They begin with the observation that:

What consistently separated winners from losers in creating blue oceans was their approach to strategy.

The companies caught in the red ocean followed a conventional approach, racing to beat the competition by building a defensible position within the existing industry order.

The creators of blue oceans, surprisingly, didn’t use the competition as their benchmark. Instead, they followed a different strategic logic that we call value innovation.

This really sets the scene for the central theme that the book is about.

For more information  on value innovation, the authors had this to say:

Because buyer value comes from the utility and price that the company offers to buyers and because the value to the company is generated from price and its cost structure, value innovation is achieved only when the system of the company’s utility, price, and cost activities is properly aligned.”

The diagram below is useful for showing how value innovation is created in the space between costs and buyer value.

value innovation

Effective frameworks are important during the strategy formulation process. This book has a number of excellent frameworks, but there was one in particular that stood out for me. It was the Eliminate-Reduce-Raise-Create Grid. This grid forces businesses to scrutinise every factor that the industry competes on. The inclusion of the eliminate quadrant forces businesses to not over-engineer solutions to problems. Deciding to not do something can be as important as deciding to do something. You can find more information in the grid below.

ERRC

Later on, in a chapter titled ‘focus on the big picture, not the numbers’ the authors have this advice:

“The strategic profile with high blue ocean potential has three complementary qualities: focus, divergence, and a compelling tagline. If a company’s strategic profile does not does not clearly reveal those qualities, it’s strategy will likely be muddled, undifferentiated, and hard to communicate. It is also likely to be costly to execute.”

The quotation above sums up the overarching theme of the book. Effective strategy cannot become all about doing new things. It should be about doing things that a company already does but doing them better and about eliminating things that don’t create value.

Later on, there is a great section on technology and how it applies to Blue Ocean Strategy. The authors had the following to say:

Unless the technology makes buyers’ lives dramatically simpler, more convenient, more productive, less risky, or more fun and fashionable, it will not attract the masses no matter how many awards it wins. Value innovation is not the same as technology innovation.”

I thought this quotation was great. Too often technology is thought of a panacea where more is always better. In reality it is only effective technology that we need more of, not technology for technology’s sake.

The price that a company decides to charge for its product or service is a key component of the strategy formulation process. The authors issue the following guidance:

The key here is not to pursue pricing against the competition within an industry but rather to pursue pricing against substitutes and alternatives across industries and nonindustrues.

Towards the end of the book, the authors offer the following advice for how to create a successful strategy:

At the highest level, there are three propositions essential to the success of strategy: the value proposition, the profit proposition, and the people proposition. For any strategy to be successful and sustainable, an organisation must develop an offering that attracts buyers; it must create a business model that enables the company to make money out of its offering; and it must motivate the people working for or with the company to execute the strategy.

This is great advice, which if taken onboard will help companies with the strategy and execution process enormously.

If companies do manage to transition away from a red ocean into a blue ocean, they may find that others try to copy them. The authors set out a number of barriers that limit this imitation.

One is the alignment barrier. Aligning value, profit and people into an integrated system is not easy. This limits imitation.

The cognitive and organisational barrier. Imitation often requires competitors make substantial changes to their existing business practices. Organisational politics prevents this from happening.

The brand barrier. Brand image conflict can prevent companies from imitating a blue ocean strategy.

The economic and legal barrier. Natural monopoly blocks imitation when the size of a market cannot support another player.

What you need to know

This book review looked at Blue Ocean Strategy by Kim & Mauborgne. Some books really force you to think differently and leave a lasting impression. This book certainly had that effect on me.

Even if you consider yourself to be astute at strategy formulation, by reading this book you can learn something.

Strategy when used incorrectly can be dangerous and can lead organisations to pursue lost causes. But when used correctly, it can be a potent force for change.

I would definitely recommend this book.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below or reach out to me on social media. What is your favourite book on strategy?

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

GREEN, GRÜN, GRÖN: WHAT DOES IT ALL MEAN?

This article looks into various definitions of the word green in sustainability.

green bean

Words are powerful. They can inspire a nation to greatness or lead them towards darkness. Ideally, we would have a fixed sustainability lexicon, where individuals would be free to use terms and those terms would be widely understood. But when it comes to the word green, it is very hard to define what it actually means.

A great resource in this regard comes on page 19 of Patrick Moore’s book Confessions of a Greenpeace Dropout. He states that:

At its worst, green is a shameless marketing slogan, used to promote various products and services as environmentally friendly. Yet it is a useful term, a way of distinguishing relatively damaging technologies from ones that have less impact, if it is used objectively.”

Patrick goes on to conclude that:

Green is more of a political or marketing term than a scientific one and therefore refrain from using it when renewable, sustainable, or clean will do. If asked what green means to me, I would say it must pass the test of being sustainable and clean.

Patrick’s contribution is a welcome one, as the former co-founder of Greenpeace, he should certainly know something about the word green and its use in mass communication. His analysis is that it must be used objectively, and that ‘green’ products or services must pass other tests to justify their environmental credentials.

I came across the shades of green framework by CICERO recently and I thought it was really interesting. It should make it easier to decipher between projects that are green and projects that are not. You can find the framework below.

CICERO is Norway’s foremost institute for interdisciplinary climate research. Their opinions are graded dark green, medium green and light green to offer investors better insight into the environmental quality of green bonds.

Green

Bonds that they flag as dark green must go towards financing projects that are aligned with a long-term low carbon future. This includes projects such as wind energy.

Those that they flag as medium green represent a half-way house towards a long-term low carbon future and includes projects such as hybrid busses. These are more sustainable than regular busses, but not quite as sustainable as fully battery powered busses.

Bonds that they flag as light green are projects that are environmentally friendly, but not attached to a long-term vision. This includes projects such as efficiency for fossil fuel infrastructure. These are better than nothing, but do not decouple development from its ties to fossil fuels.

Those that they flag as brown are the last category. These do not deserve the banner of green at all, as they are in opposition to a long-term low carbon future. This would include new infrastructure for fossil fuels, especially coal.

Whilst there is a lot to like about the CICERO shades of green framework, there are still things left unanswered. This includes the fact that green is being used to describe innovations like wind turbines and solar panels, even though they are made from non-renewable materials and often require fossil fuels to create them. The fact that the shades of green framework exists at all shows that there is a spectrum of projects that can be described as ‘green’ with varying degrees of sustainability.

What you need to know

This article looked into various definitions of the word green in sustainability.

We looked at the analysis of Patrick Moore, who personally doesn’t use the term, because of its lack of specificity.

We looked at the CICERO shades of green framework which can be used to rank the projects that green bonds fund from dark green to brown.

Overall, I don’t think the word green is a particularly useful term. It is far too vague and lacks any real meaning.

Clearly green when used in the context of sustainability is being used to describe a product or service that confers some sort of social or environmental benefit. But, it is in that window of uncertainty that unscrupulous businesses will use greenwashing to oversell the benefits of their offering.

Companies pronouncements of how green their projects or initiatives are should therefore be treated with caution, until you can verify what additional sustainable benefits are involved.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below or reach out to me on social media. What does the word green mean to you?

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

 

WHAT IS DRIVING TROPICAL DEFORESTATION?

This article takes a quick look at tropical deforestation and its causes.

deforestation

Tropical deforestation is an issue that raises passions among many people. The thought that the worlds most valuable ecosystem, made up of trees that have stood for hundreds of years could disappear in the next one to two hundred years is something that most people know is wrong. More than half of the world’s plant and animal species call the tropical rainforests their home. They are the most outstanding terrestrial ecosystem. But if we know all this to be true, why has so little progress been made in solving this problem?

Deforestation and tropical deforestation in particular are closely linked to climate change. Deforestation is responsible for 10% of global greenhouse gas emissions. Trees store carbon, which reduces greenhouse gas emissions and release them when they are cut or burned. Climate change is a complex problem to solve, but reducing deforestation is one of the cheaper and easier options available.

In one of my first articles back in February 2017, I wrote about the 3 deadly C’s. These are combustion, cattle and chainsaws. These were outlined by James Lovelock as being 3 aspects of human activity that are having an outsize impact on the environment. You can find a link to my article below. 

The 3 Deadly C’s & Sustainability

I think we can build on James Lovelock’s analysis and be more specific about the drivers of tropical deforestation.

Forest Trends have a great paper, which you can find via the link below. Some of the figures point to what the drivers are.

Supply Change: Tracking Corporate Commitments to Deforestation-Free Supply Chains, 2017

Commercial agriculture is driving at least 2/3 of tropical deforestation globally. This means that action in this area is absolutely essential to controlling tropical deforestation.

The majority of forest clearance stems from the production of the big four commodities. These are:

  1. Palm
  2. Soy
  3. Timber & pulp
  4. Cattle

It is fairly straightforward to understand that a forest would be cleared for the valuable timbers that it holds within it.

The recent focus on palm oil has brought a greater degree of attention to the links between this commodity and deforestation.

But I think the link between soy and cattle, and deforestation is less well understood. Forests are cleared to create land to graze cows. Further land is cleared to grow soy to feed to the cows. This is not only a highly inefficient process, but destroys an irreplaceable ecosystem, not to satisfy human needs, but to satisfy human wants. More emphasis of the benefits of plant-based diets is needed.

What you need to know

This article looked at tropical deforestation and its causes.

We looked at how tropical deforestation poses a threat to biodiversity as well as contributing towards climate change.

We looked at how commercial agriculture is the primary driver of deforestation, with the big four commodities making up the lions share of that deforestation.

Little progress has been made in solving this problem, because of the disconnect between the environmental destruction and the products that it creates. Until recently there was little public understanding  of the link between the palm oil in their goods and deforestation. A lot of people may not have been aware of the presence of palm oil at all.

Timber and pulp are areas that have been well covered by the Forest Stewardship Council (FSC) and Programme for the Endorsement of Forest Certification (PEFC). But there are still a lot of uncertified forest products on sale in developed countries and in developing countries there is only a small appetite for certified products.

With regards to soy and cattle, which I will link because 70% of soy that is grown is fed to animal livestock. There is little public understanding that their desire for low cost meat is driving deforestation. Despite progress in the other two areas. Progress in this area will remain slow until there is a clear link in the mind of consumers between their desire for beef and tropical deforestation.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below or reach out to me on social media. How do you think tropical deforestation can be controlled?

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

HIRING FOR SUSTAINABILITY

This article looks into the hiring process and how it can be used to advance sustainability.

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The hiring process is not something that probably comes to mind immediately when you think about sustainability at a corporate level. But the hiring process is key to developing a workforce that are capable of dealing with change and share the company’s passion for sustainability.

If you want to be a purposeful business, you will need employees who share this common purpose and vision.

This can be done in a number of ways.

One way is to infuse purpose into job descriptions. By rewriting job requirements with purpose in mind, this will automatically draw purposeful candidates towards your business and screen candidates who are looking for something different. But this is far from a formality.

Another way is to make sure that you are evaluating candidates for their purpose in interviews. This can often be sidestepped and the focus can be on competency and experience. But it is imperative to drill down into how purposeful a candidate is in the interview process.

The last way, is to raise the bar for purpose required for executive level positions. These will be the leaders, who drive purpose throughout the business, so it is important that they display exceptionally high levels of passion and purpose for sustainability. Without this, sustainability can exist in a paper form only and not in real life.

What you need to know

This article looked into the hiring process and how it can be used to advance sustainability.

A business is just a group of people who come together to achieve a shared goal. The hiring process is instrumental to making sure that that shared goal is sustainability.

I would definitely recommend that businesses implement the actions contained within this article to accelerate sustainability within their organisation.

Steve Jobs said that “people with passion can change the world.” So, you absolutely must be screening for passion and purpose during the hiring process.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below or reach out to me on social media. How do you think the hiring process can impact sustainability?

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

WE NEED TO TALK ABOUT POLAR BEARS

This article looks into effective marketing strategies employed by sustainability leaders and why corporate messages about polar bears don’t have their intended effect.

bears

This is based upon observations extracted from Green Giants: How Smart Companies Turn Sustainability Into Billion-Dollar Businesses by Freya Williams. This is an excellent book and I highly recommend that you buy a copy and read it.

She has a great quotation on page 182 which you can find below.

The mainstream, eco messages about polar bears will never beat ones about personal health, status, prosperity or happiness. Make it about people first, not the planet.”

Freya works as a CEO for Futerra in the USA. They are known for their effective approach towards sustainability communications. I would say with the above quote that Freya has hit the nail on the head.

The mentioning of polar bears, ice caps or other attempts to guilt trip consumers into buying items will never develop a product’s appeal among the masses. These concepts are too abstract to drive most consumers towards making a buying decision. It may work for the very small group of extreme environmental activists. But this group will tend to source out sustainable products anyway, regardless of the marketing. A very aggressive, guilt laden campaign will alienate the masses, for whom sustainability, whilst no doubt important, is not a top priority.

Companies should focus on people, their goals, their aspirations and their dreams in life. Explain to them how your product makes them a better version of themselves.

We have explained what’s wrong, what words should companies use to get it right?

On pages 190-191 Freya has an excellent breakdown of the most frequently used words by a number of sustainability leaders. Her findings are intriguing and go as follows.

Tesla’s top-used words are forward-looking, long-distance, cost, energy, fast, and performance. It never uses green and only rarely sustainable.

Nike’s words are design, innovation, performance, movement/motion, and technology; sustainability is in the top 10, but green is second from the bottom.

Unilever is a heavy user of sustainable—after all, it’s in the name of its plan—but the rest of its language includes children, life, future, open, and world.

Whole Foods leads with responsible and then uses fresh, health, new, pesticides, protect, and transparent.

In its Ecomagination communication, power, technology, and solutions dominate GE’s vocabulary.

These companies have developed a lexicon which has stayed far away from the clichés of polar bears and other aspects of environmental degradation. Rather they focus on positive aspects of their own products and sell those features as much as they possibly can.

Judging by the fact that almost all of these companies are performing well in the marketplace both in terms of sustainability and in terms of their business success, I would say that it has been a pretty good strategy.

What you need to know

This article looked into effective marketing strategies employed by sustainability leaders. We also looked into why corporate messages about polar bears don’t have their intended effect.

We looked into some observations drawn from the excellent book Green Giants by Freya Williams.

We looked into how sustainability is not a top priority for the masses and so communications need a more human approach and to focus on things that are important to the majority of people.

We looked into the language used by sustainability leaders, who prioritise selling the benefits of their products that people like and avoid clichés as much as they possibly can.

Overall the use of polar bears and other similar communication techniques should be avoided at all costs. Businesses should sell a product that makes consumers lives better. It should save them money, last longer, be better. Focus on these benefits, not clichés.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below or reach out to me on social media. What do you think makes a sustainability communications campaign effective?

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby

WHY ZERO-BASED TARGETS ARE SO POWERFUL

This article looks into zero-based targets and why they are so powerful. It follows on from last week’s article on the circular economy and why inertia plays such a prominent role in blocking progress towards circular business models.

sprint-zero

Oftentimes the things which stall progress are not technological or environmental factors. But they are to do with factors internal to organisations and related to any biases and preconceptions that individuals may have.

The first example of why zero-based targets are so powerful comes from Gareth Kane. Gareth has a great blog and a video series which you can find via the link below.

Is zero waste really possible?

Using the example of transitioning to zero waste, Gareth explains that zero is the ultimate stretch goal. It is a powerful number that can inspire an organisation. Gareth also explains that the zero-based target needs to be understood within the context of the organisation. He mentions that if perfection is not possible, but a 98% reduction is made, that is still amazing. Gareth also explains that it requires a language change, away from talking about waste towards talking about resources and materials. I agree with Gareth wholeheartedly there. The overall takeaway from using a zero-based target for waste is that it is about a mindset change.

The second example for why zero-based targets are so powerful comes from Steve Howard. In his Ted Talk which you can find via the link below, he sets out his case.

Steve Howard: Let’s go all-in on selling sustainability

He uses the example from his time at IKEA where they decided to go all in on sustainability, by only selling LED lights and removing all other inferior versions. He also mentions about how 100% can be easier, as if you have a 90% target, everyone in the business finds a way of being in the 10%. Having a 100% or 0% target makes it clear of the direction of travel and the ultimate destination.

The third example of why zero-based targets are so powerful comes from John Elkington. In his book The Zeronauts he opens with the statement that: “the Zeronauts are a new breed of innovator, determined to drive problems such as carbon, waste, toxics, and poverty to zero.

He goes onto mention that: “the power of zero has been trumpeted in various areas of business, notably in relation to zero defects.” It seems sensible after total quality management approaches had such incredible success for Japanese companies, that zero-based approached could bring a new dynamism to sustainability.

For more information I would definitely recommend reading John Elkington’s book The Zeronauts, or you can find out more by watching the video below.

John Elkington on ‘The Zeronauts – A new breed of leaders’

What you need to know

This article looked into zero-based targets and why they are so powerful.

We looked at an example from Gareth Kane which related to zero waste. We looked at an example from Steve Howard which was to do with IKEA and we looked at an example in John Elkington’s book The Zeronauts.

The overall takeaway is that zero-based targets force businesses to think differently and to make different priorities and choices. They also force middle managers to act differently, when pressures on time and for results can mean that sustainability gets side lined. Zero-based targets draw a line in the sand and point towards a positive forward direction. They force businesses away from a mindset that aims for incremental achievements towards one that looks for breakthrough successes.

Thank you for reading,

By Barnaby Nash

Please share your thoughts in the comments section below or reach out to me on social media. What do you think about zero-based targets?

Let’s stay connected

I can be reached on LinkedIn and on Twitter @FollowBarnaby