If you want to learn about the mechanics of change in business as we head into 2020, look no further than the world’s response to the threat posed by our degradation of the environment. While Greta Thunberg is using simple acts to teach people about the power of collective will and demonstrating ‘no one is too small to make a difference’, some of the brightest minds in the world are stuck in offices unable to connect the potential of sustainability with commercial reality.
I’ve been provoked into looking closely at why change has so frequently faltered in this space, by two things: the looming landmark of 2020, a nice round number which once looked extremely good on corporate reports citing ‘2020 vision’ and ambitions for zero-emission businesses; and the recent conversations with sustainable procurement leads as part of collaborative value creation groups we’ve set up at Procurement Leaders.
Here are three delaying factors that have jumped out to me, that I think we’d be wise to look at how we collectively solve.
For every company or government that’s ever started with a headline-setting environmental target that they didn’t hit(which is…errr….all of them?), incremental change is going to come through thousands of smaller decisions, projects and investments – gambles, even – which will take place all over the value chain. To say ‘we want to be zero emissions by 2030/40/50’ might be an articulation of earnest ambition, but is at its best too detached from the reality of each difficult decision that needs making, and at its worst, empty marketing. We need pole stars to follow, but until those are translated into targets that make sense to an organisation, a culture, a group of people, it’s meaningless enough to be deprioritised, misconstrued, delayed and forgotten.
On a recent working group call, several procurement executives from leading consumer brands – representatives from organisations that are overtly committed and bought in to the sustainability agenda – expressed one key challenge: if businesses have forever been struggling to capture and understand the total cost of any decision they make, why should they be any better when it comes to sustainability?
Suppliers might have a great innovative solution to a sustainability problem, but it may not be cheaper. So unless it’s something that will influence a customer decision, how does a buyer recognise the value of choosing that supplier? These aren’t problems without solutions, but it puts into focus the vital role procurement has to play here: becoming a solver of supply chain problems and a guardian of value against myopic decision-making.
It’s amazing how many people agree that something needs to be done about environmental problems. But businesses and shareholders will necessarily prioritise their own survival and short-term prosperity over those problems: that’s what they’re built to do. So, if there’s cost pressure on an industry, it’s been no surprise to see sustainability slip down the agenda and decision-making predicated on cost above-all-else. For sustainability strategies to succeed, they need leaders to back them and champion them. For procurement teams, there needs to be accountability in their own decisions, but also a responsibility for creating that cohesive pressure throughout the organisation. Sustainability is making procurement into brand champions – they need to embrace that.
This article is a piece of independent writing by a member of Procurement Leaders’ content team.