What It Takes for Good Sustainability Management

1. What is sustainability anyway?
2. Profit is when everyone benefits
3. What exactly is sustainability management?
4. How does corporate sustainability management work in practice?
5. ⁠Getting everyone on board
6. The right tools for sustainability management
7. ⁠Patience & Perseverance - the challenges of sustainability management
8. ⁠What opportunities arise from good sustainability management?
9. ⁠Which companies already successfully implement sustainability management?
10. ⁠What you should keep in mind for sustainability management

Probably there is currently no worse and better time for an article about operational sustainability management. The ongoing acute crises are demanding our full attention. Meanwhile, sustainability is a crucial component in managing these crises. And all the others that are still waiting for us.

Why this is the case, we look at together today. You will learn what sustainability is and what it takes for good sustainability management in the company. There will be an overview of various software for sustainability management and also some examples from practice.

What is sustainability anyway?

The term sustainability comes from forestry. Already in 1713(!) Hans Carl von Carlowitz defined the term.. Because none of us here probably speaks fluent baroque German, I translate his understanding of sustainability: When clearing forests, only as many trees may be felled as (through reforestation) can grow again.

In forestry, this all makes sense. But how do we translate it to other industries that do not rely on renewable resources? I prefer the English term sustainabilitybecause it accurately describes what it is about: To sustain means to maintain, ability is capability. Hence, sustainability is the ability to sustain oneself.

Sustainability relies on three pillars, the famous three P's: People, Planet, Profit. Or in German ecology, economy, and social issues, which is not such a nice alliteration.

The planet is the limit

Because everything in nature is designed in cycles, it is important to look at the big picture. If we take something out of the cycle, it has effects elsewhere.

At the current time, we only have one planet and thus only limited resources available. We are pushing the limits of our planet year after year. Last year, Earth Overshoot Day fell on July 29. So as a world population, we had consumed all the resources that our home planet can regenerate within a year after just a little over half a year.

The consequences of this overconsumption are already showing in industries with acute raw material shortages. Even before Corona, for example, sand and high-tech raw materials such as cobalt, lithium, nickel, copper, graphite, and rare earths were scarce.

Sustainability management therefore includes dealing consciously with the resources that the earth provides us. To ensure that the extraction of these resources affects the ecosystem as little as possible. And to ensure that these resources return to the cycle after use. Only in this way can we ensure that the basis of life for our company is maintained.

People: What sustainability has to do with spoons

What applies to raw materials, also applies to Human Resources. We humans also only have a limited number of resources available each day.

In the Spoon-Theory, mental and physical energy is equated with spoons. Every day we have a limited number of these energy spoons. When we sleep, we recharge these spoons. On stressful days, we can borrow one or more spoons from the next day. But then we lack it the next day.

Borrowing a spoon occasionally is no problem. But if we constantly demand too many spoons from our employees, there is a high chance that they will end up in burnout.

Twitter post about sustainability management

So the company also has the responsibility to ensure that the team always has enough energy. Accordingly, social responsibility is an important component of corporate sustainability management.

Profit is when everyone benefits

The third pillar of sustainability is Profit. Often this is interpreted as: As long as you minimize the impact on people and the planet, you can make profits.

Of course, the financial health of a company is a deciding factor in whether it can act sustainably. Because the greatest idea will not have a long-term impact if it doesn't finance itself. But I think we need to look at more than just financial gain when it comes to profit.

Let's take the word profit literally. In a sustainable company, everyone benefits: employees are rewarded for the time they give to the company in such a way (not discounted) that they feel appreciated. Suppliers receive a fair price for their products that respects their preliminary work and ensures their survival. Customers receive a product that they can use sustainably and long term, so that the investment pays off for them….

This thought experiment could be expanded for all stakeholders. Ultimately, it comes down to this: In a sustainably managed company, not a single shareholder makes as much profit as possible, but all stakeholders profit from the (financial) gains of the common work.

What exactly is sustainability management?

Accordingly, corporate sustainability management is the conscientious handling of resources in the areas of raw materials, people, and finance in the company and along the entire supply chain. In this way, all activities of the company contribute to the self-preservation of the world, its inhabitants, and the company.

What is important to me to emphasize: A sustainable way of thinking is the key. Without it, sustainability cannot really be integrated into the company and does not allow for long-term transformation. From the outside, then any sustainability measure quickly looks like greenwashing.

How does corporate sustainability management work in practice?

The basis for successful sustainability management is a sustainable way of thinking. With this, we can look at every area of the company and ask questions like these:

• Where are we using resources (raw materials, energy, money)?
• Are these resources renewing on their own or do we need to help?
• What happens at the end of the day with these resources?
• In which environment do we operate and what indirect effects does our action have on the environment and people?
• Are we ultimately contributing to the preservation of our planet, our people, and our company?
• And who actually benefits from the profits we make?

From this, you can derive sustainable Key Performance Indicators for the different areas - and you can manage these. Not sustainability as such.

Sustainable KPIs could be CO2 emissions, waste reduction, or overtime. From the individual KPIs, you can derive goals, define responsibilities, and derive individual ToDos. In other words: What do we want to achieve? What do we need to do for that? Who does what and by when?

⁠Getting everyone on board

And this, no surprise there, is the same with sustainability management as with any other business area. As with any other area, it is essential for success that everyone on the team understands the importance of sustainability and adopts a sustainable mindset.

If the rest of the team doesn't understand that it's important to budget costs, but regularly blows the budget, then the CFO will eventually throw in the towel. If your team doesn't make decisions from a sustainable mindset, it will eventually drive your sustainability manager into burnout.

Unfortunately, the biggest challenge for sustainability managers is still not managing the KPIs, but getting everyone on board. A sustainable mindset is not simply learned. For many people, this is a huge step out of their comfort zone. It's a process that you as a sustainability manager can initiate and accompany.

For example, by bringing all team members together and discussing what is personally and professionally important to you:

• Why do we want to become sustainable(er)?
• What values do we have?
• Which subject areas do we find particularly important?
• In which areas are we willing to make concessions?
• What do we perceive as just in the context of the company?
• Where is our common denominator in all these things?

All these questions help you develop a sustainability strategy that everyone in the company stands behind. They also help you set priorities: Which areas do we tackle first? For this, you can then develop KPIs, derive ToDos, and so on.

The right tools for sustainability management

As individual as your company's sustainability strategy is, so varied are the tools and software available for corporate sustainability management. Which of these are right for your company depends entirely on which topics are important to you. Here is a small (by no means complete) overview of various tools:

⁠CSR Reporting

For: Bundling all data relevant for corporate sustainability management and making it public according to international standards.

Examples: Envoria, Verso, worldfavor, sustainIQ, ecodesk

⁠Emission reduction

For: Measure, reduce, and possibly compensate greenhouse gas emissions along the supply chain.

Examples: The Climate Choice, Plan A, Planetly - aus dem Markt ausgeschieden, puro.earth, CO2mpensio, offsetra, go climate, Cozero, right.based on scienceworldwatchers

⁠Supply chain transparency

For: Make the social and ecological impact in the entire supply chain visible and manage it.

Examples: Afts, Seedtrace, OURZ, circularise, circularTree, sustainabill, tracks.eco, carbon chain

⁠Mobility management

For: Track and analyze commuting paths and business trips and offer alternatives.

Examples: Mobiko, circula

⁠Waste management

For:Analyze, reduce, recycle, and resell generated waste.

Examples: circuly, Resourcify, Cyrkl
⁠

Energy management

For:Analyze energy consumption and manage own energy production.

Examples: node.energy, Greentrax

⁠Purchasing

For:Collective platforms for sustainable raw material procurement and digitize purchasing processes.

Examples: Cyrkl, cirplus

⁠Product design & Life cycle analysis

For:Analyze ecological footprint and life cycles of products and design more sustainably.

Examples: ecochain, Makersite

OMR Reviews has recently added its own category for Sustainability Management. There, you will find many more tools that simplify your sustainability management in various areas. In the overview, you can filter the tools by ratings and company size (small business, middle market, enterprise).

Each software has its own profile, explaining the purpose of the tool. Of course, the sustainability software can be rated in the usual OMR categories User-friendliness, fulfillment of requirements, Customer support and easy setup.

Since the category is still so new, most of the tools currently (June 2022) do not have any reviews. So check out the tools and if you are already using one of them, then write a review so others can learn from your experiences. Long live swarm intelligence :)

⁠Patience & Perseverance - the challenges of sustainability management

I think it has become clear by now that sustainability is not a goal, but a journey. And like any journey, this journey begins with the first step. So start, start running!

Yes, the path will become arduous. You will have to overcome many hurdles. Team members who do not participate, the general daily madness, acute crises and problems, little budget, to name just a few.

The good news: Thanks to your sustainable mindset, you are well prepared for all these challenges. Otherwise, it just takes patience and perseverance. Often the most sustainable option is not the one that solves the problem the fastest, but it does in the long term.

⁠What opportunities arise from good sustainability management?

One of the most important effects of sustainability management? You get to know and understand every facet of your company and your product. A supply chain analysis reveals internal and external relationships and dependencies. A life cycle analysis detects weak points in the product and production, just to name two examples.

All this provides important data that help you face challenges with a clear head. You know the regulating screws and know at which place you need to turn to achieve the desired result.

No wonder, then, that sustainability is an economic success factor: A meta-study (i.e., a study that examines bundled data from other studies) has shown that companies with strong sustainability management operate better and are therefore more profitable.

The determining success factors are diverse: Creative cost reduction, higher revenues, better customer retention, risk distribution, just to name a few.

I would like to go into one success factor in particular: Team bonding. In view of the shortage of skilled workers, I dare to say that sustainability is no longer a nice-to-have for companies. According to the latest study by XING, every fourth person is currently thinking about changing jobs. And since the pandemic started, every 10th person has changed jobs. Important reasons: The respondents miss the meaning in their job or desire a better work-life balance.

An ideal case of sustainable corporate management offers exactly that: giving the employees the feeling of making a valuable contribution, while respecting the individual limits of the person. Sustainability is lived appreciation.

⁠Which companies already successfully implement sustainability management?

Phew, this question is not so easy to answer. In our current world, a completely sustainable company is not yet possible. Even the most sustainable companies have to compromise in some places.

There are companies that are pioneers in certain areas. For example, Frosch is focusing on the Cradle to Cradle principle in product design. New cleaning products are developed in such a way that they can safely enter biological cycles. The bottles are designed in a way that a bottle of equal or even higher quality can be made from an old bottle. For this, Frosch must know the entire life cycle of the product.

The Cologne label erlich textil has set itself the goal of producing underwear as sustainably as possible. An important component of the sustainability strategy is transparency. Even though they are not subject to disclosure requirements, they regularly publish sustainability reports. The fact that all company activities are disclosed builds trust with the customers. To keep an overview of all relevant information, erlich textil uses the CSR reporting software VERSO.

Some companies have confirmed their effort with various certifications. This not only increases credibility, but also gives you concrete goals and actions. For example, the green mobile phone provider WEtell had its common good balance examined. The evaluation showed in which areas the company is already contributing to the common good and in which areas there is still a need for action.

⁠What you should keep in mind for sustainability management

First of all: Thank you for reading my article up to this point. It shows me that you care about our world and you want to change something in your company. We need more of you!

If I wish for one thing that you take away today, it is this: Sustainability starts in the mind. For good sustainability management, a sustainable mindset is required. Otherwise, the company runs the risk of greenwashing.

Get everyone on board find your common values and themes and a common definition of sustainability. Learn to deal consciously with your resources and to estimate the consequences of your business activity. This will make the work of the sustainability managers much easier.

Once you have created a foundation, you can get stuck into the real work. And then there is no difference at all for corporate sustainability management from the other business areas: define KPIs, set goals, create ToDos, find the right tools. That sounds doable, doesn't it?