Tim Smith, Professor, Sustainable Systems Management
You’ve thought about it. You’ve talked about it—a lot. You’ve included it as a bullet point on hundreds of PowerPoint presentations. But for many senior leaders, sustainability has been a subject that’s outside of the normal scope of business—too difficult to wrap your arms around and too all-encompassing to manage effectively.
Multiple goals, multiple disciplines
While smart businesspeople understand the core components of running a profitable enterprise and can easily connect the roles of finance, marketing and operations, they can get tripped up when trying to manage to sustainability. Why? One reason can be that while each successful business function maintains its own unique competencies, they are all ultimately aligned around a single metric of maximizing shareholder wealth. But when you take on the issues of sustainability, not all profits are equal. How you seek profitability becomes influenced by a wide variety of complex issues, ranging from removing toxic substances in products and reducing greenhouse gas emissions across diverse supply chains to increasing workplace safety, advancing community development, and incentivizing diversity and inclusion in your supplier network.
Not only are there more things to measure, but managing sustainability requires new and different skills and capabilities to find profits amid stakeholder-driven trade-offs between sustainability objectives, shifting social and environmental impacts across geographies and organizations, and long-term performance targets spanning decades. Without the increasingly requisite business acumen of sustainability, it can feel like just a collection moving targets that are difficult to measure and rarely actually accomplished in any real sense.
Many organizations are investing in their employees and systems to measure, report and improve sustainability performance. It’s widely reported that more than 80% of large companies are reporting on their sustainability goals and performance, a niche activity just five years ago. And, it’s not just reporting. More than 300 global companies, representing $6.5 trillion in market value and CO2 emissions of 158 million cars annually, have committed to set “science base”’ emissions reduction targets in line with the United Nations Paris Agreement to limit global warming to less than 2 degrees Celsius.
Companies don’t commit to targets lightly. It’s no surprise that within companies like 3M, General Mills, Target, and many more, the sustainability function is growing and increasingly being integrated into the strategies and operations in order to successfully meet sustainability goals.
Investments in sustainability are admirable, but when it comes to the bottom line, they still need to pay off. Finding where your company’s opportunities to integrate sustainability reside isn’t always easy, but it can lead to cost advantages, risk reduction and preferred status among key customers. An example of this in action can be seen in firms’ efforts to manage sustainability in their supply chains. Companies want to know the sustainability impact of their supply chains, and much of my research focuses on helping them uncover these upstream risks and opportunities.
For the past three years, we have been working with environmental non-profits and large food companies to map high-impact agricultural inputs through complex food systems’ supply chains. This work highlights that the strategies most effective to reducing emissions or managing water impacts for Cargill are very different than those available to Smithfield Foods or Tyson Foods. In the case of Smithfield Foods, our models and tools have helped inform the company’s recent commitment to reduce its total CO2 emissions by 25% by 2025. Targeted strategies to meet this goal–and the increasing requirements of large downstream retailers–are being implemented across feed procurement, energy and manure management, and in their operations and transportation.
Finding your way to action
With this range of challenge and depth of expected outcomes, how can senior business leaders navigate the multiple and winding pathways of sustainability from talking points to action plans? One excellent place is with the new eight-day Comprehensive Executive Program on Leading Sustainability.
To describe this program as “multidisciplinary” does not begin to do it justice. A partnership between the Carlson School and the Institute on the Environment, this course began by the gathering of input from seventeen regional firms with a proven record of sustainability effectiveness. The course itself will be presented by business practitioners from leading companies and professors from top universities, all of whom are actively shaping sustainability best-practice on the ground.
It’s an opportunity to move from thinking about sustainability to uncovering ways you can effectively act on it within your own organization. To present meaningful and robust living case studies, we’ve gathered leaders from companies including Target, General Mills, Cargill, and 3M to help shape and enhance this course, ensuring a highly inspirational, educational, and practical experience. Participants will have the opportunity explore and create sustainability frameworks and analyses through exercises, homework, and group work. We’ll work with you to find ways to prioritize sustainability aspects appropriate and applicable to your own organization, and to open doors to meaningful and prosperous action toward sustainable practices.
Interested? We’d love for you to join us January through April 2018, for a program that can help propel your organization toward a step-change in sustainability leadership. Learn more here. https://carlsonschool.umn.edu/executive-education/courses/leading-sustainability