Fifteen years ago when Sophie Rifkin began working in the corporate sustainability space, very few people understood what that entailed. "They thought it was about recycling," says the Senior Director for Sustainability at Banza. But what was once a niche-position has gone mainstream as the prevalence of Chief Sustainability Officers has increased by more than 200% in the last 10 years, with over 50% of them held by women.
The push for more corporate sustainability — specifically environmental sustainability — is being driven by both consumer and investor demand, with more consumers demanding sustainability in their products and business practices, and more investors and potential clients asking for sustainability details in their RFPs and RFIs. These requests can include life cycle assessments, carbon footprints, and investor scorecards from disclosure platforms like EcoVadis and the Carbon Disclosure Project (CDP).
The vast majority of Fortune 500 companies already have some environmental stewardship programs in place and have been getting such questions from investors or clients for a decade, explains Jennifer Woofter, Founder and President of Strategic Sustainability Consulting. The most daring examples include PepsiCo's commitment to improving its water-use efficiency by 25% by 2025 and CEO Mary Barra announcing that GM is ending fuel and diesel vehicles by 2035.
"The next wave of environmental stewardship is coming for midsize businesses who may have escaped the first wave of pressure," says Woofter.
How to Integrate Sustainability Into Your Plan — If It's Not There Already
When it comes to sourcing raw materials, a company can create a supplier standard for sustainability and directly engage with the suppliers to understand their environmental, social, and governance sustainability (ESG) throughout, or leverage third-party certifications to help set these standards, such as Rainforest Alliance or USDA Organic. Though the environment sector gets a great deal of attention, Rifkin encourages company leaders to look at all three aspects of sustainability — including social and governance.
"Once they know where [the company's] biggest [potential] impacts are, they can understand the different levers to influence. That might [include] setting a sourcing standard and guidelines for suppliers, [such as] a supplier code of conduct," says Rifkin, who has advised companies on sustainability strategies as a consultant, and who helped launch the Center for Sustainable Business at NYU Stern and George Washington University's first Office of Sustainability.
Setting goals and targets are just a few ways for company leaders to hold themselves accountable and to inspire action. Another option is for executives to partner with industry peers or NGOs, especially when attempting to target global and macro supply chain issues that an individual company cannot solve on its own.
For professional services and B2B businesses that don't have a traditional supply chain or a need for raw materials, sustainability efforts could include focusing on travel and the office blueprint, or the social and governance pieces, by addressing worker treatment, employee fairness, diversity, executive compensation, and socially-minded policies like paid family leave.
Woofter, who has been working with companies on sustainability matters for over 20 years, says she's seen the dramatic trend toward more accountability and standardization in the space. There has been more documentation and attention on the outsized role that businesses play in the environment, from commuting and air travel which increases carbon emissions, to plastic waste and single-use plastics that end up in the ocean.
The important part in addressing sustainability, says Woofter, is coming up with a cohesive plan that takes all facets of a company into account. Companies may begin to think about sustainability in different areas, such as the marketing department considering a company's image, HR thinking about talent recruitment, or facilities management wondering about lowering the cost of the electric bill. But without a cohesive strategy, she says, the company will be limited in how much it can accomplish.
"So many of these topics have been politicized," says Woofter, referring to the debates about climate change and regulation. "But if you step back, separate from the moral imperative, what do these trends tell [you] about what business will look like five years from now? Whether or not you believe in climate change, you know that the movement is towards more regulation surrounding climate change. Your personal feelings don't matter — [the trends] tell you how to plan for your company's future."
