Sustainability is very much on the mind of business leaders and stakeholders and companies are increasingly setting targets to reduce the impact they have on the environment, as a new report from the National Association for Environmental Management (NAEM) shows. The report also demonstrates how corporate sustainability initiatives are maturing, becoming standard operating practice and involving key company decision makers.
Based on interviews conducted in 2015 with more than 20 environmental, health, safety and sustainability (EHS&S) experts in the field, the NAEM’s report identifies nine major sustainability issues on the mind of these business leaders. Representatives from Unilever, Deere and General Electric were among those interviewed. Sustainability efforts like working to increasingly reduce the environmental impact of company operations were identified in the report, as was the aim to engage more with stakeholders on corporate social responsibility programs and take a closer look at possible supply chain risks to ensure compliance to government EHS&S regulations.
Perhaps the most important trend identified in the report is how companies are getting more serious in how they tackle sustainability, taking more action than in previous years. NAEM, a nonprofit and professional network for EHS&S leaders, also published a “Planning for a Sustainable Future” report in 2014, based on interviews with sustainability leaders and experts conducted in 2013. In the latest report, NAEM identified how in the last two years, they have seen many corporate sustainability programs evolve and businesses going from thinking how to improve sustainability initiatives to taking action on them.
“Where companies were once engaging suppliers to reduce sustainability risks, they are now starting to establish business requirements associated with environmental, social and governance ESG performance,” this year’s NAEM report said. “Where they were once privately assessing their exposure to climate risk, companies are now publicly advocating for policy solutions. Where they were once recognizing the limits of existing systems, they are now partnering with others to change the rules of the game altogether.”
A Radical Transformation Taking Place
NAEM Executive Director Carol Singer Neuvelt said the 2016 report shows companies are “in the throes of transformation” regarding sustainability — silos are being broken down within businesses and leaders across different departments are collaborating to achieve corporate sustainability goals. It’s a trend not just identified in the NAEM report, but across corporate culture as sustainability becomes a more central part of business.
“The most remarkable kind of transition I see today is that we are in the throes of a transformation that companies are really understanding that the way their organizations are aligned, the management systems they have in place and the relationship to society now is all changing,” Neuvelt said.
Neuvelt also spoke to the shift in how supply chain leaders have gone from focusing on routine operations like on-time performance and cost management, to seriously looking at the sustainability issues and the risks of non-compliance to government regulations around the environment, health and safety of workers in the supply chain. As a result, she said, these supply chain leaders are putting into place clear criteria to address these issues.
“That is an indication of where we are going in the future,” Neuvelt said.
Elizabeth Ryan, director of communications at NAEM, also spoke to the changes in company culture she has heard about when speaking to companies for the group’s Planning for a Sustainable Future reports. She, too, has seen an evolution of how companies go from having a concept on how to address sustainability issues to developing a business management system around them, she said. Companies are also redefining their goal setting processes, with many looking five years ahead to 2020 and others setting longer-term goals to hit over a period of 10 years.
“They are recognizing it is going to take a lot longer to accomplish their goals and are giving themselves the time to do it,” Ryan said.
Collaboration Between Procurement and EHS&S Leaders
Procurement plays a primary role in corporate sustainability efforts. Moving forward, as companies continue to define how they will tackle sustainability and reach their corporate sustainability goals, Neuvelt said collaboration between procurement or supply chain professionals and EHS&S leaders is going to be critical.
“This will be the most significant corporate relationship to advance sustainability elements,” she said.