Kick-off Session 1 Outputs
September 30, 2019
Three overriding themes came out of the Kick-off Session of “Vision to Action: Sustainability in Business: the importance of information sharing, of measuring/ rewarding performance, and of public communication.
TAKEAWAYS
Participants in all discussion groups pointed out that more information about sustainability in a business context was needed at all levels within organizations. The formation of standing resource centers to provide education was recommended as a solution. Academia can help by working on the narratives and terminology around sustainability and researching how to harmonize disparate frameworks and assess value.
Without business leaders (and policy makers as well) being assessed on their performance in advancing sustainability practices and having that performance tied to compensation, it has been difficult to make progress on sustainability. This is true of businesses as a whole, too–we need to find ways to quantify impact and monitor how we proceed from a baseline.
Finally, businesses should use their public face, their brand, to explain the efforts that they are making around sustainability and educate their customers with the massive marketing power that they now apply to persuading their customers of the superiority of their products as they are today.
Our full session synopsis:
What are the blockers of moving towards a sustainable business model?
— Internal blockers
The concept of sustainability is still in development. A question of “Where to start?” arises
There are budget constraints
Awareness and knowledge is lacking at all levels across the organization, including at senior levels
Employee level engagement strategy is often lacking
We need short-term measurement on engagement–need to assess how an organization is engaging and the impact of that engagement
There is a perception that “we are already doing it” + E.g. Perception that Japan is actively engaging while it is not; divisions or departments that are in markets where there’s been a good deal of progress overall may believe they don’t is much additional progress that they need to make
Compensation structure in C-level + There are no targets around sustainability, so we are lacking a link to C-level performance assessment; the focus today, instead, is mostly on buybacks, which are seen positively by investors
Talent attraction & retention for resources who are knowledgeable about sustainability
— External blockers
Lack of regulation
Lack of customer pressure
Lack of reporting constraints (KPI) + Reporting is a must-do, integration in strategy and operations not yet viewed with the same urgency
Lack of peer pressure + Collectivist Japan – No company wants to be the minority or first
Lack of social media & reputation crisis
— International issues
Canadian companies, for example, abide by Canadian regulations locally, but their operations in African countries does not require the same rigorous approach and they may not follow their home regulations in such overseas markets
— Opportunities after overcoming those blockers:
Competitive advantage
Operating efficiency
Talent attraction
Branding
Leadership & innovation opportunity
What information are we lacking?
— In general, we are lacking:
Top management education and understanding + Mid-management can’t make a difference on their own - They can’t make decisions because they can’t quantify SDG impact
External pressure on C-level positions + Independent Board member + Investors + International conferences (need for more pressure applied at these forums) + Business Community, Keidanren + Government
— Information we are lacking:
Information to convince employees that is: + Concrete + Impactful + Numerical + And connected with SDGs
— Resource Center where employees at all levels can access useful information such as case studies, research reports, industry benchmarking about sustainability
— Argument about quantification:
Some data is unquantifiable by nature, we should accept and work to make those at senior level and investors more comfortable with that reality, while still working to identify ways to quantify aspects that can be quantified (reference to helpful book about this topic: “The Purpose of Capital” by Jed Emerson)
There is no need to simplify this data and argument for top management, but there is need to sell the importance to them.
What types of resources are needed?
— Recognizing collaboration
Encourage and endorse collaboration + Internal +Cross-sector + Cross-industry + Cross-stakeholder
— Identifying who needs resources
Resources needed for all level + C-level + Department managers + Resources and information have been too C-level focused and must be at all-level - Integrate sustainability-oriented information in new employee orientation
— Data and technology
Baseline/ desired state + Gap analysis + Target and KPIs
Mechanisms + Incentives +Penalties
Understanding from all levels
Opportunities: + Roll sustainability thinking into a succession planning + Encourage internal and external innovation + Stay relevant to customers - Must be commercial to stay sustainable
What needs to change in our environment, market, and elsewhere to create a business environment for change?
An ideal business environment for change:
— More Independence
— More Accountability
— More Transparency
Changes we need:
— Government level
Improve government programs
More SDGs Awards for public recognition
Increase regulation on Environmental Impact disclosure
— Corporate level
Become B-Corps + As a branding strategy + Doesn’t necessarily have to be required – rather it can be leveraged as a very useful self-assessment tool
Education of business executives
Coordinate with Keidanren
Pressure also needs to come from media + Asahi
Information exchange + Such as this discussion series
Increase and promote disclosure
Investment ESG + PRI
— Consumer level
Consumer-side education + Companies are responsible to educate more consumers + Promote more sustainable products
Partnership with NGOs
Research
— Opportunities
Productivity + Job retention + Job satisfaction
Financial return + Good for everyone
What role could academia play in supporting businesses through this transition?
— Information
C-level understanding of success from sustainable strategy
Case studies on successful examples
Research for awareness + E.g. Nuclear energy’s pros and cons in Japan + Analyze human behavior and choice from academic perspective
— Developing/Integrating tools
Integrate existing frameworks and tools + There are too many frameworks and difficult to compare + Ideal example: One tool for different departments internally
— Story telling/Creating a new name
Build awareness in society
Changing terminology and narrative + PET bottles: call them "resources" instead of "waste" + Environmental crisis: is a human crisis
— Academia as organization
Divestment from fossil fuel assets
Procurement of sustainable products and clean energy sources
Read the Air—Trista Bridges and Donald Eubank are cofounders and principals of Read the Air, a Tokyo-based specialist advisory service that enables companies to put sustainability at the core of their business, for purpose and profit. Read the Air guides commercial enterprises in designing, implementing and executing powerful business strategies that create sustainable business models. (www.readtheair.jp)
