The question begs to be asked: Is a sustainable strategy, an internal policy that is often communicated externally via company sustainability reports, also a stakeholder strategy? In most instances, the two ideals are not the same. In fact, they often gingerly sidestep each other.
Sustainability strategies usually come in the form of a document, a publication I recently alluded to as being one thing or another:
- a possibility, a goal that is within reach and the company has developed a plan to get to that goal;
- or simply lip service for the greater community at-large.
What is a Sustainable Strategy?
Broadly speaking, it is a business manifesto of sorts that plots a course towards a more environmentally conscience approach to the way the company operates. It may suggest a zero waste goal of reducing packaging, changing industrial production to account for the ‘downstream’ impact of those processes, or simply doing what it can to divert products from the landfill, or more specifically, from a single-use existence.
Shareholders and customers do read these documents and some activist investors and customers do hold the company accountable. However, the vast majority of us are passive. This is not suggestion that this passivity is wrong. In almost every situation, the accountability for these types of documents does not get our attention until the strategy either fails spectacularly or simply doesn’t align with the company’s profitability goals.
What is Stakeholder Strategy?
Twenty years ago, Ann Svendsen asked a similar question in her book “The Stakeholder Strategy: Profiting from Collaborative Business Relationships” (Brent-Koehler). The book began as research into how to audit the non-financial impact of how a company operates, its direct impact on its customers, shareholders, suppliers and the community in which they conduct their business without creating an assigned dollar amount on the so-called ‘social’ effort. This is no easy task and is still creating confusion in larger companies within departments that do not often align.
Traditionally, the how-much-is-this-going-to-cost assignment to non-financial business activities created deep divisions amongst leadership turning what should be an objective discussion into a subjective one. In other words, the common questions is always focused on how this will translate into profits? This is a viable question and one that every business of every size needs to ask.
Socially Responsible Investing Goes Mainstream, Sort Of
In a previous life, about the same time Ms. Svendsen’s book was being published, I began a financial writing career that lasted almost twenty years. At the time, socially responsible investing (SRI) was considered well out of the mainstream. It was deemed a fringe approach to wealth creation and not always the path for investors to reach out-sized returns. Companies within SRI mutual funds were categorized by their focus whether it be linked to religion, the environment, the way they conducted themselves on the global stage or some other social goal such as guns or energy. The companies these funds invested in understood the non-financial impact of their citizenship and sought to find responsible paths to achieving those goals – and returns beyond the fuzzy feeling of doing something right.
Today, companies need to proclaim their stewardship to the environment in order to quantify the non-financial accounting they must explain to their shareholders. Understandably, this is no easy task. No company is willing to miss a quarterly number or suggest that profitability might slow as the business shifts focus or retools major components of its current processes. Company leadership and the folks who do full accounting for them understand the goals. However, they seldom want to pay for them.
Last week, by a 10-1 margin, the European Parilment voted to ban some single-use plastics. This includes straws and cutlery. Numerous regions throughout the US have banned the use of single-use plastic bags. While we all have seen images of the refuse floating in our open oceans, we have not yet done much more on a collaborative scale than simply identify the problem exists. Nor do we want to be legislated into action.
In this instance, as with many large companies, the sustainability strategy is leading the way, almost blindly. While plastic straws and utensils do pose a serious environmental risk, changing the composition of the product does not create a more sustainable world – these items will still be wrapped in single use plastic to protect the public from itself and in many instances, the local municipalities have not upgraded their disposal processes fast enough to keep pace with those new strategies. It does do one thing effectively though: It increases the pressure on a company’s stakeholder strategy.
When considering plastic as an example of a sustainability strategy that has begun to gain a foothold, stakeholders should be aware that there are no shortage of plastic recyclers. There is no shortage of material being produced and being used. There is no shortage of people and communities at-large who want to focus on eliminating this problem. Sure, China and a growing list of foreign destinations might not want it however this is not a reason to give up.
The Answer is Collaborative
Logistics is often defined as the “detailed coordination of a complex operation involving many people, facilities or supplies.” Logistics needs leadership. Unfortunately, any reference to logistics is missing from the vast majority of sustainability strategies. For instance, pronouncing a company-wide ban on single-use bags by such-and-such a date in the future does not explain the cost of that goal (the consumer will be required to pay for those new reusable bags, which, despite being reusable, will still be made of plastic and will not necessarily be compostable and/or biodegrade – even if they claim it will – in most communities). If it was easy, it would have already been done – without the fanfare.
Most companies understand the goal. They assume that the gap is linear, a point A to point B journey, the vehicle of which has yet to be invented.
That gap will not be closed necessarily through announcing good intentions. It will come as a logistical collaboration. And it will require creativity. This is where Zero Waste Consultants comes in. We have no problem shaking the tree or reinventing the wheel. There is a better mousetrap when it comes to sustainability and we have the resources to help you get there.
We have been on both sides of the problem. We are able to gather the resources needed to utilize what currently exists. In almost every instance, we attempt to align sustainable with a company’s stakeholders and create a strategy that reflects profitability with environmental progress. Shouldn’t we just talk about it?