Embedding Sustainability !

Sustainability has already become a widely talked about agenda globally. CEO’s around the world continue to face pressure from responsible investors and societies regarding the way they conduct business and how they interact with the stakeholders.

For those who hate personnel working in Corporate World and studying in Business Schools even to the extent of abandoning them should learn that Corporate world ain’t that selfish anymore and pupils studying in the business schools are not just concerned about wealth generation rather they too have a heart for the betterment of humanity.

At the heart of sustainability, lie two basic concepts:
1) Businesses assuming responsibility for the sake of betterment of society
2) There is a business case for sustainability when businesses invest in those areas for the betterment of society, which are linked with its own value chain.

In developing countries like Pakistan also sustainability is gradually coming to limelight in the corporate world with few companies taking responsibility and striving to take lead in pushing the Sustainability agenda. These companies include Engro Corp and its investment companies, Lucky Cement, Attock Cement, Crescent Steel and Allied Products and others. These companies have not only focused on the reporting aspect of sustainability rather they are keen to embed sustainability within their organization by assigning targets and also by inculcating it into the day to day routine and habits of their employees. Such embedding of sustainability will ensure that sustainability should not only be forced from the top of hierarchy rather it should also evolve from the bottom of organizational hierarchy.

Now the question is what sort of tool is appropriate to embed sustainability into an organization? Well, one can also think about using the flexible tool of Balanced Scorecard to embed sustainability targets and commitments. What Robert Kaplan and Norton came up with was Balanced Scorecard, a tool with four dimensions i.e. Customers’ Perspective, Finance Perspective, Internal Perspective and Learning Perspective. Using the tool, measurable targets are assigned to individuals and departments. If this tool can be slightly modified to include sustainability aspect, it can be helpful in cascading down the overall sustainability strategy of an organization to operational level.

The fifth perspective should be included in the tool as ‘Sustainability’ – this will include targets and commitments pertaining to the areas of:

  • Environment – Key Performance Indicators (KPIs) covering this aspect include Emissions intensity (e.g. tons of CO2 equivalent per unit of production), Energy intensity (e.g. Giga Joules of Energy per unit of production), Water footprint, waste, material consumption;
  • Occupational Health and Safety – KPIs covering this aspect include Total Recordable Injury Rate, Number of lost days, work-related fatalities;
  • Community investments’ impact – KPIs covering this aspect include number of children educated, number of patients treated;
  • Economic aspect – which not only ensures financial stability of the Company but also how the company can have a positive impact on the society. The KPIs pertaining to this aspect may include total amount spent on local suppliers engaged, number of employees hired from the local community, total payments made to the exchequer;
  • Labour and Human rights Practices – KPIs covering this aspect include employee turnover rate, top talent ratio, time to hire new employee and also ensuring that no child labour or forced labour incidents occur;
  • Product responsibility – KPIs covering this aspect include reduction in energy requirement for using a product, number of new sustainable products and ensuring no banned product is sold.

By embedding these aspects in the organization using Balanced Scorecard and by also making relevant KPIs part of the job description, will invigorate employees as they will now be held accountable and their career growth becomes dependent upon becoming truly responsible in their behavior and conduct.

We also need to move beyond restricted sustainability, this requires inculcating in the habits of employees to not only display responsible behavior within the organization but also in their personal lives. The employees should be recognized for displaying a responsible behavior in every walk of life – this recognition can be in terms of any award or incentive. This is an ideal state where employees develop a conscience which intrinsically holds the employees responsible for displaying a behavior of responsibility.