A group of experts discuss business sustainability in the first of a two-part article. Chaired by Iris Cepero.
Research conducted by The British Association of Facilities Management in 2015 shows an increase in barriers to fulfil sustainable practices. Are we assisting a “sustainability crunch” and what could be the causes? What are, in your experience, the main barriers?
Lowellyne James: We are beyond the “sustainability crunch”; it’s more like a sustainability crash that was firstly precipitated by the financial crisis of 2008 and senior management’s fixation on the economic dimension of sustainability, and it has been prolonged by a recent slump in oil prices. Economic survival has been the mantra reinforced in political rhetoric as the ‘age of austerity’, and with this signal businesses have focused on profit maximisation. Besides perceived lack of political leadership, the research that underpins my recent book Sustainability Footprints in SMEs – Strategies and Case Studies for Small Business indicates that the main barriers are sustainability competing with other issues on the agenda, time constraints, the transience of sustainability (sustainability is not a static goal), inability to recoup costs of sustainability initiatives such as carbon footprint measurement, failure to recognise benefits of sustainability programmes, generational issues such as the perceived negative attitudes to sustainability among senior business leaders, and stakeholder communication.
Keith Whitehead: In my experience barriers to implementing more sustainable practices come in many forms. Many depend on internal organisational and operational factors as well as external geopolitical issues and weak political will in some countries.
If I were to try and structure them I would suggest:
Lack of senior management commitment
Senior management commitment is critical in driving through any significant changes within an organisation and this is perhaps one of the main success factors, or lack of such, in helping to implement more sustainable practices. On a personal basis, motivation of managers is a complex issue and main factors tend to be remuneration (though this is not always the main motivator), recognition and status, increasing autonomy and responsibility, and job satisfaction. Managers within an organisation will be motivated personally by these factors and will see benefits to the growth and success of the organisation as a way of progressing their own agenda. However, in areas such as climate change and green gas reduction it is difficult to gain commitment for long-term events given the relatively short- term life of a typical CEO post and five year business plan.
Lack of financial resources
Clearly the introduction of effective environmental/sustainability practices will in the long term deliver a cost saving; however there may be a degree of ‘up-front’ costs in the short term in developing and implementing them which often stop things in their tracks. Often, health, safety and environmental professionals have been weak in developing clear business cases and often don’t have the authority or budget control to lead implementation or are overridden by short-term financial decisions. But this is a complex issue and depends on the size of the company and other stakeholder requirements. The government has tried to increase access to funding and grants but again their success and implementation has been carried out with many, ironically, shelved or cut due to financial constraints.
Lack of skills and knowledge
This can be an important barrier to effective environmental/sustainability practices as changing to a more sustainable approach may require considerable knowledge and skills. A general issue may be the level of general environmental knowledge of staff – strongly influenced by media and peer opinions. Senior managers may have received no formal training or education in sustainable principles and often the role of environmental management is wrapped up with health and safety and as a result can take a back seat to what are perceived as more important or pressing issues.
In many other countries, the role of environmental manager is often given to an engineer - this is particularly prevalent in places like India and the Middle East - but are not given wider training, so any initiatives tend to be very operational and production-based. Moreover, and often as a result, many businesses don’t have any formal reporting system or data collection processes for measuring effective sustainability outputs.
Disinterest & resistance to change
There is a tendency among employees in general to be resistant to change and to effective environmental/sustainability practices, as recognised in many models for change management. Disinterest is a separate matter and may be due to a whole range of factors such as lack of awareness, lack of knowledge, the failure of previous company initiatives or low workplace morale.
It’s a sad personal observation and experience that in many countries the policing and implementation of environmental law is weak, often non-existent, and sometimes mired in corruption; this means that there are no external drivers for companies to implement more effective environmental/sustainability practices. In practice, this means they don’t put any effort in implementing globally accepted minimum health, safety and environmental standards or practices and this is sadly reflected in the prices we pay for imported goods and the HS&E disasters we hear on the media.
Louise: Many organisations have achieved the easy wins in respect of sustainability which provide the greatest cost benefits. These are usually in respect of waste and energy management. Achieving continual improvement following big wins such as this gets harder, and, unless the company is a potentially big polluter there are fewer legal requirements. This results in green issues falling down the agenda. If it also falls down the agenda for clients and stakeholders there are no incentives from there either.
Do you think the argument that ‘high engagement in sustainability delivers real, tangible benefits’ has really permeated business plans, decisions and reporting?
Lowellyne James: Stakeholder engagement is vital in embedding sustainability within the organisation. As sustainability issues in essence are intangible – for example, greenhouse gas (GHG) emissions which are an altogether invisible subject – this couples with the limited empirical proof to connect sustainability initiatives and profits. My research indicates that perceptions play an important part in the adoption of sustainability initiatives creating a ‘love/hate’ relationship, not only among senior management but also stakeholders such as employees. This ambivalence is contextual and is dependent on the perceptual proximity of the individual to the issue(s), for example, a nuclear power plant, and it varies depending on the context (many would argue ‘not in my backyard’).
The nature of this ambivalence impacts on the adoption of sustainability initiatives by senior management and the buy-in to sustainability strategy by employees/stakeholders. Therefore, the pursuit of strategy or the adoption of strategic alternatives may not be based on sustainability principles due to the perceptual orientation of the strategist/CEO: sustainability positive, sustainability passive or sustainability negative.
Likewise, stakeholder support for sustainability initiatives such as GHG reduction may not be forthcoming depending on perceptual orientation of the individual. Managers should seek to encourage stakeholders to remain sustainability positive through appropriate training, instruction, supervision and the promotion of proactive learning. This engagement will foster organisational commitment to sustainability initiatives.
Keith Whitehead: I think the fact that the new ISO 14001 standard requires, among other things, that top management take on more responsibility for the effectiveness of the management system and the integration of environmental management into business processes, indicates that in the past environmental and sustainability management has not been part of this process. The environmental policy should include a commitment to protect the environment beyond the corporate boundaries. It’s not really enough for a company to declare it will ‘go green’. Environmental management and sustainability initiatives must be integrated into every aspect of the company and decision-making; from how materials are procured and risks are identified. It is only when sustainability is recognised as an organisational goal at the very top layers of management and driven down through every aspects of their business that companies will reap true triple bottom line rewards.
Louise Hosking: Definitely. Ultimately the organisations who really do walk the talk have it ingrained in everything they do and this can only be achieved if it is incorporated into everyday business decisions. If the leaders of the organisation do not believe it is important, the culture within will not reflect this either.
The ISO 14000 family of standards and guidance cover environmental management systems, auditing, performance evaluation, etc. Do you think that adhering to the standards is sufficient?
Lowellyne James: The ISO 14001 2015 standard outlines the minimum requirements for achieving environmental objectives, ensuring environmental performance and meeting compliance obligations. However, the environment is only one pillar of sustainability the others being economic and social —with economic concerns being monitored using established financial reporting mechanisms. Sadly, the social impacts of business operations are overlooked. Specifically small and middle enterprises, due to their size, perceive limited influence over social issues.
Keith Whitehead: I often describe ISO 14001 as the baseline for managing a company’s environmental responsibilities. The analogy is ISO 14001 is a new house which is sound but is devoid of furniture. The implementation and reference to other ISO guidance and standards is the furniture that improves the house. However, many environmental management representatives I speak too aren’t even aware of these supporting guidance and standards which often links back to lack of training and qualifications in environmental management. Their house remains unfurnished, so to speak. Using the full range of guidance and standards is the first step on the road to becoming more sustainable. On top of this, companies should be engaging and using other sustainability tools and reporting on their triple bottom line.
Louise Hosking: In my experience ISO 14001 and the other associated environmental standards are badges companies feel they now have to achieve. I have seen a huge difference in the standards of those organisations who provide certification. In many cases very large organisations, in my opinion, are not always being properly audited and smaller companies over-checked. Once achieved, the momentum to come up with new ideas and really incorporate standards can fall away unless there is a positive culture within the company.
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