Strategy & Management

Sustainability Day by Day

10 Principles for Success in Management and Communications

06.10.2010 -

Today, sustainability is a key strategic issue for companies, in B2B and consumer markets alike, and as a result, senior executives are naturally anxious to ensure they have the "right" sustainability strategy. Ever since it started trading as an independent company in 1999, specialty chemicals supplier Cognis has put sustainability at the heart of its business model. But what makes a successful sustainability strategy? And what role does communication play? This article presents 10 principles, derived from practical experience.

Anyone who thinks sustainability is solely a question of image is not doing their job properly.

Sustainability is not just something that companies can use to polish their image once a year by producing a glossy sustainability report, and then forget about. Instead, they need to show how they put the principles of sustainability into action in their day-to-day operations - and that requires a considerable long-term commitment of effort and resources throughout the organization. An understanding of sustainability must be embedded in every area of the business - from purchasing, to operating divisions to investor relations.

At Cognis, the sustainability strategy operates on four levels - the company itself, its products, the environment and the wider community. All activities are guided by the principles of sustainable development, in a comprehensive approach that balances financial, environmental and social considerations. And it is not limited to just the company's own operations - suppliers, resellers and other partner companies must also comply with its sustainability standards. For this reason, Cognis seeks to involve as many stakeholders as possible in a dialog of sustainability, at every stage of the supply chain - from raw material suppliers to logistics providers to customers. Supplier evaluation management processes assess whether potential partner companies share Cognis' sustainability vision, and a positive verdict is essential for any long-term relationship.

Sustainability is a Marathon, not a Sprint.

Anyone who has tried to integrate sustainability into corporate strategy will know that the first steps are the easiest, and quick wins can always be achieved. But the further you go down the sustainability road, the more effort is required to achieve the desired objectives and fulfill your aspirations in every area. This is because a business by its very nature cannot be 100% focused on sustainability, but must achieve a balancing act between commercial, environmental and social imperatives.


To do this, some sort of framework is required, and Cognis has adopted the 24 principles of green chemistry and green engineering to serve this purpose. Every new product development is judged against these principles: is it made as far as possible from renewable raw materials? Is process complexity kept to a minimum? Is the product biodegradable? By asking these questions and following these principles, Cognis is able to make the right decisions to build a sustainable future.

Sustainability Needs a Strategy.

Sustainability cannot be achieved by action for action's sake, it requires a considered approach developed with an eye for the future, both of the company and of society as a whole. Lasting results can only be achieved with a long-term strategy designed for the specific circumstances of the company, defining clear priorities and using resources intelligently. Financial sustainability is also an important consideration - there is no use coming up with innovative green products unless they add genuine value and meet the specific requirements of markets and consumers.
At a very early stage Cognis asked itself what the most important issues that faced both the company and society generally were, now and in the future. By plotting the results on a grid, it was able to identify the most crucial sustainability-related issues, develop appropriate strategies and solutions, and begin a gradual roll-out of these.

Sustainability needs change agents.

Lasting changes are necessary for sustainability. And as with any change project, if employees don't understand why things have to change, it is highly unlikely that they will change. So a lot of persuasion is required. This will involve integrated communications to create a sense of urgency, provide examples of sustainability in action, and secure buy-in from managers and staff to the company's sustainability objectives.
At Cognis, there are also sustainability champions in all departments of the company - not necessarily just in environmental compliance, but everywhere from marketing to communications and from HR to purchasing. Their role is to monitor social and environment-related issues and possible controversies and assess the impact of new developments on the company's business model. Change agents also set priorities and draw up specific action points that will help the company to realize its sustainability vision.

Sustainability Needs Cross-linked Thinking.

What do consumers, legislators and NGOs mean when they talk about acting in a sustainable way? What does sustainability consist of in the context of sourcing raw materials and services? How does sustainability manifest itself at different stages of the supply chain? If communication managers are attuned to these questions, then they will be better equipped to help management decide the way forward and act as an advisor on and facilitator of greater sustainability. This requires holistic thinking, taking information from all areas of the company, maintaining an extensive network of contacts and actively sharing knowledge with external experts and opinion leaders.

To ensure staying up to date with all relevant developments, Cognis has put a comprehensive issue management system in place. The corporate communications department, together with a global network of experts within the company, monitors the public debate on issues that are relevant to the company's business, researches facts and background within the organization, and engages in active dialog with governments, NGOs and customers.

Sustainability Needs Effective Structures and Processes.

To ensure sustainability projects are managed effectively, and that a close eye is kept on the cost-effectiveness of sustainability activities, companies need to ensure that well-defined structures and processes are in place. The corporate communications department is perfectly placed to act as an advisory and facilitating capacity here, by involving experts from different areas of the company and coordinating interdisciplinary processes.

Cognis has set up a sustainability council, comprising managers from different business units and functions, with overall responsibility for initiating, assessing and overseeing all activities relating to sustainability policy.

To get Management's Attention, You Have to Speak Their Language.

Sustainability management and communications are important strategic tasks, and to ensure they are recognized as such, they must be embedded in the company's management systems. This means that communications managers must be familiar with management and reporting tools, and be able to explain the benefits to the company's management in terms that they can understand. They must be able to show how their work adds value to the business, and how this value can be measured and quantified. At Cognis, sustainability projects are evaluated on the basis of KPIs such as energy savings, reduction in outages etc. To manage and monitor the effectiveness of communication, the company uses a communications scorecard. Every year, targets are set and indicators put in place that can measure progress towards these - and this also applies to the sustainability strategy. For example, Cognis evaluates the number of reports in the media in connection with green chemistry and sustainability every half-year.

Restraint and Consideration Enhance Credibility.

Shrill, exaggerated messages are generally counterproductive. When companies make statements about their sense of environmental or social responsibility, they often meet with a skeptical response, and if they cannot back up their claims by pointing to concrete actions, they will quickly find themselves accused of greenwashing.

Cognis' key message is that sustainability is "work in progress". The company's sustainability policy represents a public commitment to the principles of sustainable development, and it uses communications to talk about its sustainability strategy, and provide case studies of projects that put this strategy into action.

Little Things Can Make a Big Difference.

Sustainability is about the little things as well as the big ones, and everyone can play their part. For example, Cognis has implemented a company car policy that rewards employees for choosing more environmentally friendly vehicles. This will both reduce the carbon emissions of the company's fleet, and encourage staff to feel a greater sense of responsibility.

Departments within the company too can set an example of sustainability, in everything from the paper they use to print their brochures to their use of web conferencing technology to cut down on travel. Sustainability should be reflected in everything that staff does - for example, even when sourcing promotional giveaways, care must be taken to ensure the items chosen meet sustainability criteria.

The Future - Sustainability is Judged in the Court of Public Opinion.

It is no longer possible to put the genie back in the bottle. These days, sustainability is established as a key driver of growth and innovation; the regulatory requirements on businesses in terms of sustainability are only going to get stricter; and the relentless rise of social media means that public debate, discussions and pressure around social and environmental issues now builds up much faster than ever before. Corporations, authorities, NGOs and other interest groups are all looking for the best ways they can use public forums and the media to put their side of the story forward.

To remain part of this debate and be pro-active in communicating its position, Cognis tries to engage with its stakeholders by using their own preferred communication channels. In terms of sustainability communications, this means constantly reviewing both overall strategy and individual activities, assessing the potential of new developments in the media landscape, and opening up new avenues of communication as and when appropriate.

Contact

BASF Personal Care and Nutrition GmbH

Rheinpromenade 1
40789 Monheim
Germany

+49 2173 4995 222