Want to define your sustainability strategy? Start by defining your purpose.
First, two important definitions:
Purpose – the specific positive change you want to see in the world that drives every decision you make as a business – your “why”.
Sustainability – the set of actions you take to ensure that your business is socially and environmentally sustainable. i.e, that it is helping to support social and environmental stability, enabling the long-term resilience of your business for all of your stakeholders.
This is the fifth of a series of 10 insights from co:collective on how your business can join the sustainable economy.
Enlightened business leaders look at purpose and sustainability as drivers of undiscovered business value.
For the last 50+ years, the received wisdom in economics has been that the sole purpose of a corporation is to enrich shareholders. Fortunately for all of us, there is a growing recognition that this view was, at best, overly simplistic and has led us to a place of perilous instability, both socially and environmentally – climate change, ecosystem collapse, widespread social unrest and outright global conflict are some of the negative results of relentlessly pursuing this philosophy.
The dawning understanding today is that businesses don’t operate in a vacuum, but instead are part of widespread, dynamic and interconnected systems including human communities, the global financial economy, the global energy and resource economy, and the planetary biosphere including all other living things.
As a result, enlightened business leaders have been asking themselves deep questions: if enriching shareholders is too narrow, then what IS our broader “why”? How might we benefit not only shareholders, but also the wider set of stakeholders upon which the success of the business actually depends – our employees, the communities we do business in, the other members of our value chain, both upstream and down, as well as the planet we all depend on for our survival? When you look at it through that lens, hopefully it’s easy to see how purpose and sustainability are deeply interconnected – in fact, it’s almost impossible to pull them apart. It’s also worth acknowledging that in some quarters, both purpose and sustainability are still seen as a “tax” on a business. But enlightened business leaders are realizing that, in fact, they can be a powerful accelerant of innovation and other value creation – what Stuart Mclachlan and Dean Sanders call “sustainable performance” in their well argued book “The Adventure of Sustainable Performance.”
Some of the world’s most progressive and innovative companies have taken the tack that their purpose and their sustainability strategy are one and the same.
We see companies like Patagonia defining their purpose as “Defending our home planet”. Tesla’s purpose is to “Accelerate the world’s transition to sustainable energy”. Unilever’s purpose is to “Make Sustainable Living Commonplace”. Vital Farms’ purpose is to improve the lives of people, animals and the planet through food. In all of those purposes (purpii?) the sustainability strategy is right there in plain sight. The work that needs to be done from a sustainability standpoint is defining the “how” – creating a detailed plan for implementing, measuring, and optimizing the sustainability actions over time so that at the end of every year progress has been made.
Not all purpii are so overt, but you can still feel the sustainability strategy in there: Nespresso’s is “Coffee is a force for good – At Nespresso, we promise the finest coffee in the world that preserves the best of our world.” They then go into much more detail about how they define the “best of our world”.
Some lean further into social sustainability than environmental sustainability: Tony’s Chocolonely’s purpose is “to create a world of slavery-free chocolate”.
And finally, some well known Purpii don’t mention the planet or society at all: Google’s purpose is “to organize the world’s information and make it accessible and usable”. Pursuing that purpose, Google has created one of the most valuable companies in the world measured by revenue. But I think it is an open question whether that purpose is fit for purpose today. Is it truly serving all of Google’s stakeholders? Or just shareholders and a subset of users? Time will tell, particularly as Google faces the rise of deepfakes, fake news, and Googles’ own existential transition to AI with all the wide-ranging human and planetary impacts – for instance many people are unaware of the exponentially higher need for electric power that adoption of AI at scale causes. A more modern take on Google’s purpose might be something like “To enable a future where humanity continues to thrive by providing sustainable, equitable access to safe and verifiable information.” At any rate, it might be time for some deeper thinking about purpose at Google.
Is it possible to define your sustainability strategy without embracing purpose and a stakeholder-led point of view?
Absolutely, yes. But a watchout is that without a true purpose to live up to, those strategies can veer into compliance – the box checking “what is the minimum we have to do to remain a legal enterprise?” line of thought. That’s ultimately a defensive strategy subject to almost daily change as the hailstorm of social and environmental sustainability legislation builds, globally. As Mclachlan and Sanders point out: “[Compliance] quickly becomes groundhog day. It turns into a never ending cycle of data collation and disclosure to fulfill the demands of ceaseless litany of reporting standards and acronyms…” If you take this path you risk having to revise your sustainability strategy quite often, and you also risk being called out for virtue signaling/inauthenticity by the growing group of consumers who expect more than the minimum from businesses today.
The advantage of first defining your higher purpose is that, if it is fit for purpose, your sustainability strategy will feel like a natural extension of it and your customers and employees will better understand why you are making some of the tough choices you inevitably have to make in business. This approach also often leads to proactively doing more than is strictly required in sustainability and embracing the practice of focusing less on the short term and more on the long term – both healthy practices in any business. But the larger point is that by defining a higher purpose for your business first and laddering down to a sustainability strategy that aims to restore social and environmental stability you set your business on a pathway to success not just in the next quarter, but over the next quarter century, or more.
Key takeaways:
→ First defining your overall purpose and thinking deeply about all of your stakeholders makes the task of defining your sustainability strategy clearer and easier.
→ Approaching your sustainability strategy with a compliance mindset is a hamster wheel.
→ Rather than thinking of purpose and sustainability as a tax on their business, enlightened leaders are using them to define and unlock areas of undiscovered value – sustainable performance.
By Ty Montague
Co-Founder, Chairman, Chief Purpose + Creative Officer
Ty and his partners founded co:collective in 2010 as a strategic and creative transformation partner that designs generative organizations with purpose at their core. He is an author and frequent speaker on the topics of innovation, sustainability, business transformation and the power of purpose. Ty spends most of his time working within co:’s sustainability offering, partnering with clients to define their sustainability strategy and embrace circular business practices.