Why Environmental Sustainability Should Be a Priority in Your Organization

Millennials and Gen Z are more determined than ever to work for a company whose beliefs align with theirs. Organizations are putting significant time and energy into values-based initiatives that may range far afield from their core business (like environmental sustainability). These two generations are poised to become the bulk of the workforce, and they’re the most job-hopping yet. Just shy of 25% plan to change jobs within the next six months, according to LinkedIn’s Workforce Confidence Index. 

Why are they so antsy? While past generations may have prioritized compensation or long-term job stability, the LinkedIn Index notes that 59% of Millennials interested in moving on are looking for better alignment with their interests or values. A whopping 80% of Gen Z wants the same. It’s No. 1 on the list for both. Given the war for talent and the cost of training new employees, companies that ignore one of the key reasons people are attracted to, and stay with, a company do so at their peril. 

There is also the matter of investors. The environmental, social and governance (ESG) criteria that socially-conscious investors use to assess companies gained significant influence. A McKinsey and Company Global Survey found that more than half of executives and investors think ESG programs create shareholder value. Almost all see long-term value in environmental sustainability initiatives. Furthermore, investors say they would pay a premium for companies with positive ESG records—some more than 50%. 

When investors put environmental sustainability issues under the microscope, they may look into a company’s energy use, climate policies or compliance with environmental regulations. They may focus on industry-specific concerns such as its treatment of animals, contribution to air and water pollution, or management of toxic waste. Companies that need investors to help fund their growth ambitions must pay attention.

The Rise of ESG

What is environmental sustainability? One might argue that it is in the eye of the beholder given the breadth of the United Nations definition: “meeting the needs of the present without compromising the ability of future generations to meet their own needs.” Most companies, however, look to the aforementioned environmental sustainability criteria for guidance. Climate Impact Partners found that 38% of the Fortune Global 500 have “delivered a significant climate milestone or are publicly committed to do so by 2030.” That’s an increase of 8 percentage points year over year. Carbon neutrality and science-based targets are popular areas of focus. 

ESG initiatives have certainly gained momentum, but environmental sustainability remains an incredibly complex topic whose definitions and targets are far from settled. Suffice it to say that it is top of mind for companies of every size, not just multinational corporations. And there’s definitely room for improvement in the court of public opinion. A Pew Research Center study found that 62% of Americans say companies aren’t adequately addressing climate change. For the optimistic among us, that means there’s a big opportunity for organizations to set themselves apart from their competitors by putting solid programs in place and making sure their employees, investors and customers know about their efforts.

Environmental Sustainability: The Balance Between Being and Doing

Companies often want to do the right thing, but few can point to environmental sustainability as their core business. Climate change isn’t an area of expertise, nor is it simple for those willing to dive in. Companies may hesitate to tackle it because they don’t know where to start. If they do have some idea of where to start, they may be reluctant to move forward because they think they lack the people, processes or skillsets to get it done. Or, a company’s environmental sustainability strategy concerns may deem the investment too steep or detrimental to the company’s growth and profitability. 

But what if sustainability was thought of as a balance between “being” and “doing”? In fact, one could argue that without the former, the latter simply won’t happen in a (ahem) sustainable way. “Being” is about building a culture that embraces environmental sustainability. “Doing” is about executing sustainability initiatives and keeping them in motion long term. Laying that cultural foundation first, then strengthening and nurturing it over time, builds an organization that has environmental sustainability in its DNA—not one that simply goes through the motions to align with the corporate/investor zeitgeist. Companies with environmental sustainability as a core value hire differently. They think about their business and processes in new ways. They invest purposefully and make decisions in a more holistic way.

5 Actions to Support Sustainability

To achieve the real change demanded by COP26, and to contain the global temperature rise below 1.5 degrees, we, as a collective, need to go further, much further. This is no longer a question about how small the degrees are, but instead a critical step for change that we need to make. For some that may sound scary, maybe even undoable, but the transformational changes achieved by organizations during 2020 have shown just how adaptable a company can be.

What approaches can make this change effective, fast and pervasive at a global level?

1. Rethinking the sustainability strategy

Sustainability is in fact a complex change, in which many variables come into play and quickly modify the context. Beyond a change in structures, processes and tools – in change management literature this is referred to as the ‘hard side of change’-, it is necessary to create a proper culture, or ‘sustainability mindset’, aligning values ​​and skills with strategic objectives – otherwise known as the ‘soft side’ of change.

Companies have already experienced the risks of facing a change from the hard side only through the recent case of digital transformation: only the ones that supported and included people throughout the change process and strategy have revealed striking results (Tabrizi et al., 2019).

Environmental sustainability, therefore, is not achievable on a large scale if people are not involved. It becomes strictly necessary to have their buy in on a vision that often strongly breaks the status quo.

2. Equipping CEOs and Board members with ‘reflective capacity’ and a long-term perspective

Sylvia Scherer spent 7 years in the Sustainability Strategy Team at BMW Group. She is a business coach and also a member of CoachHub’s Advisory Board today. Sylvia emphasizes the need to develop skills around forming bold visions, being able to imagine a positive future and around communication, as sustainability requires rethinking products, services, processes, etc. In an industry where driving a car is a symbol of freedom, self-driving cars are a big disruption in strong discontinuity with the past. “A few years ago, only a few top managers in the automotive industry could imagine cars without steering wheels.” she says.

To move forward, however, CEOs need the ability to communicate and engage in a vision and then generate traction, acting on the context.

Research on the ‘reflective capacity’ of CEOs reveals a strong correlation between the company’s sustainability performance and this ability. Reflective capacity is both self and system-awareness, allows the ability to observe and make decisions from a meta-perspective, makes meaning of context using  diversified sources of information and a holistic approach. We know in fact that, in the rush of solving complex problems, our brain tends to rely on fast, automatic thinking, which however offers a partial and limited rationality. For this purpose, it’s useful to be reminded that at the core of the coaching process sits the reflexivity that bolsters coachee’s flexibility and strategic thinking when dealing with the organizational uncertainty and the reaction to emergent, unpredictable issues (Day et al., 2008) and the expansion of personal awareness and insights (Grant, 2007).

3. Rethinking the values ​​of the organization

Values based coaching is, in this case, an excellent support as it allows us to explore our own values ​​and how they guide our choices, and to understand how they are aligned and in support of the organizational ones. This awareness motivates us to create and maintain behavioral change, because it encourages us to act in coherence with the values ​​that prove to be foundational for us. It is also easier to avoid the inconsistency that is generated by the lack of alignment between our values ​​and our actions.

4. Develop Environmental Competencies in leaders

In a paper on the Competences for Environmental Sustainability, (Dzhengiz & Niesten 2019) describe the ‘Environmental Skills’ as a set of:

• systemic thinking skills, to develop the ability to make decisions in complex scenarios;
• ‘interaction’ skills to navigate relationships with multiple stakeholders and grasp their different perspectives, but also to communicate and influence them;
• skills related to empathy towards social, ethical and environmental issues and the ability to reason and act with a long-term perspective.

It is therefore not enough to be trained in technical knowledge on the subject of sustainability. A specific personal development journey can be a game changer for leaders and change agents involved in cascading sustainable initiatives.

For this purpose, one of the most effective tools is systemic coaching, relying strongly on Peter Senge’s theories, able to guide coachees in understanding what is their part in the entire system, how they can influence it, and how to take responsibility.

5. Developing responsibility and self-efficacy in every single person

We know that, during a change that is lived as stressful and unpredictable, people can react defensively, ranging from denial to frustration and anger till a feeling of being helpless.

The feeling of being able to influence the system shifts the person’s role from that of a defenseless victim to that of an actor of change. We have all experienced this sensation at the beginning of the Covid-19 pandemic. We have felt powerless in front of what was happening, but small daily actions, such as washing our hands or wearing a mask, acted as a way to restore control over an uncontrollable context, taking care of ourselves and others. Self-efficacy is, for this reason, a key factor in helping individuals deal with situations that are novel, unpredictable, or stressful (Schunk, 1983). In this sense, coaching has been shown to increase both self-efficacy (Baron and Morin, 2010) and a solution-focused thinking (Grant et al., 2012).

Companies that are willing to bring forward a thorough sustainable change have the imperative to work towards the generation of a new mindset in their people, putting the Planet at the same priority level of Profit, and promoting a deep sense of responsibility in every single person in the company.

We at CoachHub are ready to make our part in this challenge.

Coaching for Successful Environmental Sustainability Initiatives

A company may adopt a complex cap-and-trade solution to reduce their carbon footprint. They may embrace remote work policies to reduce commute-related carbon emissions. They may try to influence suppliers to use more eco-friendly sourcing, packaging or shipping. All involve change management if they are to be successful. 

Although the word “transformation” is often used to describe complex, multifaceted changes, it pertains to smaller shifts as well. For companies embarking on environmental sustainability initiatives, there will always be an element of transformation at play. Those that are most successful embed what is called “change agility” into their cultures—the ability to identify changes that need to be made and the capability to do something about it, repeatedly. One way to do that is through coaching.

Transformation needn’t be fixed in time. Instead, think of it as a mindset. We’ve found that individualized coaching helps people incorporate new values, ways of working and ways of thinking, all of which can move companies toward greater environmental sustainability. Taking a long-term, individualized approach to coaching makes change possible by helping employees, managers and leaders understand the psychology behind successful transformation. It also gives them the skills they need to drive organizational change forward with grace and confidence. With employees and investors alike making high-impact decisions based on a company’s  environmental sustainability track record, coaching is a solid investment for the organization—and the planet.