Six ways bold leadership can release innovation in sustainability

Davide Stronati
20 October 2015

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Sustainability

Embracing radical change will help to meet and exceed sustainability goals and brings commercial rewards too, writes Davide Stronati.

Sustainability improves an organisation’s ability to manage risk, creates opportunity, and strengthens commercial performance. But to realise these benefits, business leaders have to move out of their comfort zones.

This was the key message at the Mott MacDonald 2015 Sustainability Conference which drew together 140 senior figures from clients and partner organisations representing infrastructure, manufacturing, digital technology, academia and the public sector.

Speakers from 13 companies, including UPS, Kingfisher, Diageo, Willis, Siemens, Sellafield and Thales discussed why they have embedded sustainability in their business planning and highlighted the bottom line benefits, brand advantage and resilience they have gained by doing so.

These are the six key ways highlighted by speakers that bold leadership can bring a step change in sustainability while strengthening your business:

1) Harness the power of competition

We all know competition leads to innovation in goods and services. Sustainability introduces a new set of targets to compete towards – energy and resource efficiency, and social value, for example.

"One good example is the Consumer Goods Forum (CGF) bringing together more than 400 retailers from 70 countries to achieve zero net deforestation among its members by 2020."

Create competition between different departments and offices and within your supply chains. Get them to find radically more sustainable and cost-effective ways of meeting your needs by breaking  with ‘business as usual’. And work with natural competitors through business councils and industry bodies to pursue your joint sustainability goals. One good example of this is the Consumer Goods Forum (CGF) bringing together more than 400 retailers from 70 countries to achieve zero net deforestation among its members by 2020.

2) Turn risks into opportunities

Most business understands the main risks they face. These risks can come from new regulation, new technologies, or new trends. Avoiding them is impossible, but some organisations still don’t have the strength or ability to respond adequately to these risks, simply ignoring them or trying to stave them off. Being aware of risks and of the business’s strengths and weakness is the starting point to transforming these risks into value by identifying which will deliver competitive advantage if adequately addressed.

3) Embrace big data

Buildings and infrastructure have not kept up with the digital revolution. The easiest and most sustainable way of realising efficiency gains with existing assets is to manage them better.

"Gather performance data, analyse it, use it."

Gather performance data, analyse it, use it. And when creating new assets, enable instrumentation to see whether design assumptions are correct, then apply observations to following projects to maintain safety while reducing redundancy.

4) Invest for the long-term

Conventional business plans requiring 5-10 year returns on investment prevent firms from looking at whole life costs which will often have the bigger bearing on the strength and sustainability of a business.

"A forward-looking business should be willing to wait for dividends which will be cumulatively higher in the long-term."  

A forward-looking business should be willing to wait for dividends which will be cumulatively higher in the long-term.  

5) Question everything

Just because things have always been done a certain way doesn’t mean we should continue to do them that way. Question standard solutions and practices, look at the potential of new techniques and technologies, and pilot new ideas. Then upscale rapidly.

6) Invest now in climate resilience

The effects of climate change already cause up to US$100bn in global insured losses each year, a figure that is set to rise as the size of the global asset base grows and as climate impacts increase in frequency and severity. Many assets are only designed for one-in-five year risk events, but the steady pace of climate change is quickly rendering this level of risk management insufficient.

Building climate resilience is essential for business continuity: resilient businesses will gain market share and reputational benefits by outperforming rivals that perform badly or fail altogether following a major climate impact.

Implementing these principles within your business will require you to move out of your comfort zone, with policies and investment decisions that may at times seem costly or counterintuitive. Strong leadership and nerve are required to achieve change. However, commercial gains are available for businesses that do so.

Davide Stronati is Group Sustainability Manager at Mott MacDonald.