Why the FD needs to get involved an organisation’s sustainability agenda.
Sustainability supporters say that it can bring both cost reductions through energy and waste savings and stimulate the creation of new products and services.Save and earn? It sounds more like a retailer’s ‘loyalty points’ promotion campaign than a business proposition!
So does the business case stack up? The answer is a cautionary ‘yes’.
Sustainablity will attract ROI proposals to the FDs desk like bees to honey. So before you use sustainability to reinvigorate your organisation, look closely from where these benefits will emerge. In our experience there are some important pitfalls to avoid otherwise you could do a lot of work for little financial gain.
1. Putting equipment before behaviour
Unless your business has only a handful of employees, the best benefits will come first from your people, not your equipment or buildings. Be aware of signing off investment proposals before staff engagement programmes have been fully implemented. Be very sceptical of claims that the new equipment will mitigate the need for behaviour change. Rear seat belts were installed in cars for 10 years before passengers started wearing them. Only after it became compulsory were injuries significanlty reduced.
2. Imposing sustainability
If your staff are not personally engaged in sustainability, energy saving initiatives like automatic lighting and heating will soon be seen as intrusive, irritating or inconvenient and be overridden. It’s a universal attitude because we feel that technology should enhance our lives not constrict it. We frequently hear energy managers complain that staff overide systems and the savings evaporate.
3. Singling out sustainability for special reporting
Sustainabilty critical success factors (CSF) should be seen as part of normal operating procedures and must be included in the existing management systems. Don’t make it special. Because we humans resist change, the more normal a change appears the more likely we’ll accept it. Sustainability is a means to an end, not an end in itself so it should not be singled out for special treatment.
The CSO leads the way but who manages?
Sustainability initiatives range from low cost behaviour change programmes to highly expensive building and equipment refurbishments. If you employ a CSO then you might expect them to manage these initiatives. However, their role is usually a strategic, providing an overall vision and direction for initiatives, rather than operational management.
Few CSOs have the operational experience to assess the detailed financial viability of a project, the authority to change the way the organisation measures its KPI/CSFs and have access to large capital budgets. This may change in the future but most CSOs are thought leaders, advisors and influencers, not managers. Therefore it is vital that the CSO gains the active support of the Finance Director who has the means to monitor and control the success of these initiatives.