7 July 2015

Green to the core: sustainability based strategy

People from all backgrounds, from end consumers to business strategists, are driving – and grappling with – changing expectations about sustainability in business. Organisations are facing pressure to serve today’s conscious consumer, while achieving more ambitious business outcomes. At the recent “Green at the core” sustainability panel discussion hosted by the Master of Management Society, panellists from the areas of consumer goods, sustainability leadership, strategy and ethical consumption discussed whether both of these goals could be pursued concurrently in a meaningful way.

The audience, mostly Master of Management and Master of Management (CEMS) students, represented another part of the fray: a young, ambitious workforce, more empowered than ever, and seeking strategies to affect change within their workplaces and the world more broadly.
The four distinguished panellists provided insights into current sustainability business trends and gave the audience direction and tips on how to affect change within their own workplaces. The panellists included:

  • Scott Matyus-Flynn, Head of Strategy,  Republic of Everyone, an award-winning sustainability consultancy and PR agency 
  • Gordon Renouf, CEO, Good on You, an ethical fashion destination bringing transparency and empowerment to the consumer and letting you shop your values, and Co-Founder, Ethical Consumers Australia, a social NFP which makes it easier for people to make consumer choices that match their values
  • Kate Harris, CEO, Centre for Sustainability Leadership, a NFP which offers leadership development to educate clients on conducting business in a sustainable way
  • Paul Connell, Business Unit Leader (Homecare), Unilever, the world’s third largest consumer goods company
The success of any CSR or sustainability strategy, Paul argued, requires serious commitment from top leadership. The public commitment of Unilever’s global CEO (Paul Polman) to the company’s sustainability-centred business model, which pledges a 50% reduction in environmental footprint by 2020, is a fundamental reason for its successful adoption across the company globally. “When you tell people to double revenue and halve environmental impact, it forces massive innovation…We’ve seen significant drops in can size and increases in detergent concentration, for example.”

The idea of ‘greenwashing’ was raised, a phenomenon whereby companies market their products as ‘natural’ or ‘sustainable’, sometimes spending more money on communicating their sustainability achievements than actually reducing their environmental footprint. Paul highlighted that this trend was under fire from increasing consumer awareness and knowledge. Companies like RoE were at the front lines of this movement, guiding companies in building transformative sustainability strategies but also in communicating them in an appropriate way, both internally and externally.

Nevertheless, as Kate suggested, too many companies are overlooking sustainability because they have done their ‘bit’, perhaps in the belief that embedding a degree of sustainability exempts them from striving for bigger goals.

Ultimately, the panel agreed, it is far more effective for companies to ‘clean up their act’ than to invest in rebranding to greenwash their image to the public. If for no other reason, the internet’s democratisation of information simply makes the alternative too risky.

That is what Gordon’s startup, Good on You, aims to achieve. Having recently launched an app and crowd funding campaign to make ‘on the go’ ethical shopping easier, Good on You rates fashion and beauty brands for their ethical and environmental soundness. While consumers are complex and varied, a major barrier to ethical consumption behaviour is poor or misleading information, which Good on You hopes to address. Another challenge is the existence of a “green gap” between consumers’ intentions and their decision. Panellists believed this gap could be bridged by improving consumer education, having values-based conversations and presenting clearer business cases for investing in sustainability.

Resonating with Kate, she added that there is now a move towards engaging with stakeholders and not just shareholders. A practical example was in the issue of waste, where reducing waste not only had a net positive environmental benefit, but also reduced costs which could be passed down to the consumer. Providing a business case for sustainability, and being able to articulate it to the relevant stakeholders, was seen as just as essential a skill for new graduates as knowing the key principles of sustainability.

Kate’s work at the Centre for Sustainability Leadership was bridging the knowledge divide in the workplace by “getting people who care into positions of power”. Similarly, Gordon’s work at Ethical Consumers Australia involves empowering end consumers to make more sustainable decisions. The panel agreed that the onus was not only on consumers to make more sustainable decisions, but also on corporations to make that choice easier for us.

The question of Australia’s sustainability sector and attitudes towards sustainable consumption compared to the rest of the world drew impassioned responses from the panel, who mostly agreed that Australia’s political and economic orientation was lagging behind that of Europe and Asia, regions that are largely “getting on with” sustainability. Nonetheless, Australia’s green building industry and grassroots movements were highlighted as definitive strengths.

The panellists, as industry leaders, did an exceptional job at breaking down a complex issue and making it relevant to future business leaders in the audience.

Patrick Nguyen
Current student at the University of Sydney Business School

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