It’s almost 15 years since sustainability guru and author John Elkington came up with the concept of the ‘triple bottom line’ – where business is run not just on economic performance, but also on how it impacts on the community and the environment.
Yet attend any graduate fair or download the agenda for any senior executive conference, and the term ‘sustainability’ is higher than ever on the agenda. Increased pressure on corporate governance, publicity about the threat of climate change, and shifting demographics have all forced employers to think deeper about what will help their businesses to survive in the long term. And when it comes to recruiting Generation Y – the new generation of graduates – they’re as concerned with their potential employer’s business ethics as they are with promotion prospects.
But is sustainability really anything different from corporate social responsibility (CSR) or ensuring that every office has a recycling bin?
“It’s not just about green projects – it’s about pulling it all together,” explains Matthew Thorogood, a partner at business services firm PricewaterhouseCoopers. “You might offer flexible working or a car-share scheme, but if these things aren’t pulled together as a strategic objective they are not effective. It’s about how you reward people, how you develop them, how you live your values.”
One of the most striking examples of this, according to Thorogood, is Marks & Spencer’s well-publicised ‘Plan A’ initiative, which champions ethical business practices that help both communities and the environment. The difference between this and an everyday CSR programme? Plan A will also boost M&S profitability and improve its employer brand – so far, 570 ‘Plan A Champions’ across the business have managed to reduce in-store energy usage by 5.3% and have increased hanger recycling by 32%.
It’s this “pulling it all together” that offers a real opportunity for HR to make a name for itself, says Richard Kemp, director of executive development programmes at Henley Management College.
“From a strategic HR perspective, this is an important thing to go and claim,” he says. “Some organisations have brought it in as a response to climate change, but in the long run I believe [sustainability] will sit in HR or organisational development. It’s part of how you see yourself as an organisation and part of building up your talent pool.”
But by taking on the sustainability mantle, HR has to be careful not to preach – this isn’t about policies, it’s about developing a value-set that everyone in the organisation understands and most importantly, lives, says Kemp.
“Legislation will catch up, for example on carbon emissions, but most organisations have spotted this as the right thing to do already. It’s not reactive – you should be able to say: ‘This is how we are’. HR fosters and holds that community together’.”
It goes without saying that the impetus for putting these values in place should come from the very top of the organisation, which in turn brings HR closer to the chief executive. This has certainly been the case at IT services company Logica (see case study left/right/below), where chief executive Andy Green, alongside the company’s chief financial officer Seamus Keating, sponsors Logica’s many environmental and community projects, but “HR is driving the delivery”, according to UK HR director Pam Chase.
“It’s not just a fluffy HR thing or a nice-to-have, there are business reasons for doing this,” she says.
So what’s next? Peter Hamill, senior consultant at development centre Roffey Park, says: “Organisations have got to the point now where they’re saying: ‘What changes do we need to make to our business processes to make them truly sustainable?’. It’s easy to manage someone to maximise profit, but if you want them to make money and still have a positive social and environmental impact then there’s more ambiguity. How do they live these values and still make money? For HR, it’s about how they train line managers to do this.”
This means honing many of the skills that HR is already well-known for, and sharing these around the organisation.
Jock Encombe, director of occupational psychology firm YSC Scotland , says: “Skills such as the ability to be courageous, empathy – the ability to get on others’ wavelength, creativity and coherence are all crucial to embedding sustainability into an organisation. The danger is that organisations approach this in a fragmented way with one or two policies here and there. This is a missed opportunity.”
This means spotting ways in which corporate programmes can complement each other – for example, cycle-to-work schemes offering tax incentives, or sending someone on a secondment to a deprived community that will build their decision-making skills more than any classroom-based training ever could.
Hotels and services group Accor runs a sustainability programme that covers everything from protecting children against sexual exploitation to providing access to water in deprived areas. It measures its performance against the UN Global Reporting Initiative (GRI), which provides a consistent framework of 90 sustainable development indicators.
Sustainability should also be a core consideration in how and where an organisation works. Working 12-hour days, for example, is not sustainable for most staff in the long term, but more flexible working approaches require greater input from HR and line managers. And Andrew Pegg, managing director of environmental consultancy Midas Corporate Consulting, urges HR to think about the office environment.
“People recycle and they turn the lights off,” he says, “but if your organisation rents a 10,000sq ft office, and 20% of people are on holiday at any one time, 20% work from home, and you have 10% off sick, then you really don’t need 100% of that space – you could reduce it by half.” And make sure your initiatives don’t contradict each other, he adds: “You may run a cycle-to-work scheme, but if your car pool is full of 4x4s, employees will begin to question your motives.”
Ultimately, sustainability comes down to your decision-making processes as an organisation – if we do this today, it will have this outcome tomorrow. With HR driving these values, the profession could just be the saviour of the earth.
How do you define sustainability?
“It’s a human decision process, not a system. I believe there are four key elements: living within the premises of the earth greater equity for all working in a way that benefits future generations and respecting the harmony of life forms.”
Richard Kemp, director of executive development programmes, Henley Management College,
“My own personal definition of sustainability is ‘thinking for the long term’ – on an organisational, society and personal level. If society is not sustainable then your organisation isn’t either – you have no consumers, no resources. It’s an apocalyptic view but a healthier society is a better functioning one.”
Jock Encombe, director, YSC Scotland
“Business must develop in a way that meets present needs as well as profit-making capability, without compromising the ability to do the same if not better in the future.”
Matthew Thorogood, partner, PricewaterhouseCoopers
“Sustainability comes down to how you balance the triple bottom line – the social, environmental and economic implications of what you do. Businesses are accustomed to balancing the bottom line financially – now they need to look elsewhere.”
Peter Hamill, senior consultant, Roffey Park
Case study: Logica
When IT services provider Logica recruited chief executive Andy Green from BT in January 2008, the key task for his first 100 days was to look at where the company was doing well and where it wasn’t. One of his first conclusions was that the company was too internal facing, that it needed to become more customer-focused and appeal to a key recruitment market: Generation Y.
Part of the company’s response to this has been to build sustainability initiatives into the business, driven in great part by UK HR director Pam Chase.
So far Logica has:
- cut air travel by 30% and road travel by 10% in 2007
- introduced a ‘StampDown on Carbon Footprint’ initiative, whereby staff are encouraged to switch everything off when they leave
- removed all low-efficiency cars (rated F&G) from its company car scheme
- replaced printing equipment so it automatically prints double sided
- increased video conferencing by 50% in 2007
- decided to ‘bin the bins’ so staff are more likely to recycle their waste.
- introduced ‘smart working’ – keeping people engaged with the work culture while also allowing them to work from home.
- emitted 1.6 fewer tonnes of carbon
- held lunchtime seminars on environmental issues.
Chase is keen to stress that these initiatives are not just to improve the company’s image.
“Everything has an end goal,” she says. “We need to make money and these things help to drive the bottom line.”
Chase works closely with Logica’s chief financial officer Seamus Keating, who sponsors the campaign alongside a full-time environmental programme manager. There are also 40 ‘ambassadors’ for the programmes across the business.
“I like the idea that the sponsorship for the project comes from the chief finance officer. That means it’s directly linked to the business. Otherwise it’s ‘just another bloody HR initiative’,” says Chase.
Creating a sustainable and responsible business is also key to winning business, she says, with an increasing number of clients asking to see Logica’s environmental and corporate social responsibility credentials before it even makes the supplier shortlist.
Finally, Chase has been careful not to issue HR edicts on how staff should behave.
“What we try to do is create an environment where people want to act differently rather than imposing policies and procedures. For example, with homeworking, there’s been a change in mindset around enabling people to work at home rather than introducing a policy,” she explains.
HR Directors Club networking dinner: HR’s role in ethical business
Join us for a three-course dinner at the Barbican in London to discuss HR’s role in ethical business on 3 June. Free to members of our HR Directors Club.