Governance and embedding

Hallmarks of a leader in governance and embedding

  • A system is in place that allows the company to identify and capitalise on sustainability opportunities. The system allows for experimenting and risk taking and enables the organisation to learn from its mistakes.
  • Ownership and accountability for sustainable performance are spread across key business functions and staff. All staff have personal sustainability targets (although they may not be labelled as such) in relevant areas.
  • Robust and transparent governance structures are in place. This may include an external panel advising on current and future sustainability issues.
  • The organisation recognises that transformation towards sustainability is only possible through deep-rooted cultural change. Systems are in place to enable this change.
  • Company values reflect a commitment to sustainable development.
  • Staff are sustainability literate, and sustainability ambassadors/champions across the business drive the agenda. Internal and external learning networks are in place to support change happening at all levels.

 

Case studies:

Arup is a global firm of planners, designers, engineers and business consultants with offices in America, Australasia, East Asia, Europe and Africa and the Middle East.
 
In 2007 Arup released their sustainability policy.  It calls for a systematic approach to sustainability across all areas of business and provides a shared language to talk about it across all the regions that Arup work in. The policy highlights Arup’s objectives and outlines the actions they will take to achieve this in four key areas: core business, people, facilities and external relationships.
 
Influencing change from within is part of Arup’s  ethos and their policy provides a catalyst for ensuring sustainability practices become part of everything they do. Staff have a high degree of sustainability knowledge and expertise related to their core business.  Briefing notes on project sustainability issues are readily available and an electronic sustainability training resource ensures that staff from different regions can access the same training.  A sustainability forum enables employees to ask their colleagues anywhere in the world for sustainability advice for a project or just discuss more thought-provoking issues. 
 
Importantly, the sustainability policy is “by the people, for the people.”  Owned by the firm’s main Board, it has been born out of staff engagement and its high profile within the organisation ensures that is used and referred to. 
 
Embedding sustainability across all business areas globally is a vital step towards Arup’s mission “to shape a better world”.

InterfaceFlor in Europe, has created a multi-level training programme to ensure that all employees understand the company vision (Mission Zero). It is called the 'Fast Forward to 2020 Learning programme' with an aim of ensuring that there is sufficient knowledge surrounding the vision in all areas of the business in order to raise awareness which in turn will support the progress made towards 2020.
 
All employees go through a basic training, called ‘Level 1’. All managers of the company and all marketing, sales and customer support employees complete the next level, ‘Level 2 Functional Specialisation’, focusing on the relation between Mission Zero and their specific job roles. The senior management levels within the organisation complete the highest level of training, ‘Level 3 Critical Analysis’, where they learn more about the context of sustainability issues in relation to our vision and implications of it for the internal organisation. All Sustainability Ambassadors are eligible for the three levels of training.
 
Sustainability Ambassadors are those employees that from a personal development point of view have an interest in the topic of sustainability, which is key in our mission. In their role as Ambassadors they will be inspired to become and stay a driver of the vision within their own circle of influence, either by learning more about the topic or actively applying their knowledge in the organisation by engaging or initiating sustainability related projects on a voluntarily basis.
 
The Trees for Travel Programme which has been in existence since 1997 globally, offsets all business air travel carried out by employees.
 
For those employees concerned about the environmental impact of the daily commute InterfaceFLOR assists in contributing to the carbon offsetting payments through its Cool Commute® programme.

BT, a global provider of communications solutions and services, is able to clearly demonstrate how, where and why sustainability adds value to the company. Its detailed business case draws out five key factors as integral to its strategy and performance: marketplace opportunities, reputation, risk management, employee motivation and cost reduction.

BT is leading the way in moving from addressing sustainability as part of risk management to also viewing it as a business opportunity. In addition to its CSR risk register, BT has developed an opportunity map through its sustainable economic growth programme to quantify the market attractiveness and sustainability impact of some of its top sustainability opportunities.

BT also has an external advisory panel that regularly challenges the company’s thinking and advises on strategy around sustainability and CSR. In addition BT’s board discusses CSR each year.

Internally, BT’s board-level Committee for Responsible and Sustainable Business (CRSB) oversees the company-wide CSR strategy.

In 2006 EDF Energy launched its Sustainable Future Project. The purpose was to create a culture of sustainability that would be truly transformational. With this in mind, EDF Energy set out to ensure that sustainability management and delivery were firmly embedded in business operations, and linked to employee incentives.
 
Milestones include a new senior position – ‘Director for Sustainable Future’ – that reports directly to the chief executive. This new post is supported by both an internal panel of experts and an external stakeholder panel. Employees have been invited to debates on climate change, as well as a screening of Al Gore’s An Inconvenient Truth. Sustainability ambassadors throughout the company have two hours a week each set aside to champion EDF Energy’s sustainability performance.
 
Stretching targets commits the company to making substantial changes to its operations over the next decade. Performance against these targets is linked directly to the company bonus scheme which applies to everyone, including the chief executive.
 
What started off as an environmental initiative with a strong focus on climate change now embraces the social agenda, and the company has developed a set of ambitious social commitments to match its green ambitions.

Aviva established a Board CSR Committee in 2006 to improve the firm’s internal CSR governance structure and boost their degree of accountability. Meeting three times each year, the committee is chaired by Aviva’s senior independent director and otherwise comprises three other non-executive directors and the group Chief Executive. Further, the insurance group’s CSR policy and its implementation are reviewed in an annual meeting of the Board CSR Committee, CSR specialists from other parts of the business, NGO partners and external auditors.

Annual reports are compiled in accordance with the FORGE management and reporting guidelines (which are tailored to the financial services sector) and the disclosure guidelines as issued by the Association of British Insurers. Shareholders, customers, employees and the local community are all recognised as stakeholders. The group is responsible for providing clear and just governance and transparency of reporting, particularly as Aviva has a stated aim of becoming the world’s most trusted savings, investment and insurance provider.


Whole Foods Market, a leading retailer of natural and organic foods, has evolved an innovative management structure and employee compensation system to deliver what its CEO John Mackey describes as “conscious capitalism”.

In contrast to the conventional retail model where management occurs at the store level, small departmental teams, such as fresh produce, make decisions over what produce to stock or who to hire. Decisions on sourcing local and regional produce are devolved to the store, along with the independence to support small producers in scaling up and improving their products through the provision of low-interest loans. This approach encourages a culture of ownership and the organisation is able to develop knowledge from the bottom up.

Employee compensation is aligned with Whole Food’s vision of ‘interdependence’. Bonuses are paid to teams and not individuals, fostering a collaborative atmosphere, whilst all employee salaries are included in the wide range of financial data made available internally. In recognition of the contribution each employee makes to the success of the organisation, a salary cap limits the maximum salary to 19 times the company-wide annual average. That 94% of stock options have been granted to non-executives is an impressive reflection of this approach.

Whole Foods maintains that success is measured across a balance of factors: customer satisfaction, and strong financial returns, but also the happiness of employees, environmental enhancement, and community participation. There are undoubtedly challenges to face in maintaining commitment to these core values across a growing organisation, but to date Whole Foods has seen success in parallel across a number of these indicators. Whole Foods has grown rapidly from a single store in 1980 to more than 270 stores today, delivering the highest profits per square foot in the industry. It is consistently listed in the FORTUNE "100 Best Companies to Work For", achieving a rank of number 5 in 2007.