A Climate For Nature: How Businesses Engage With New Issues And Gain Stakeholder Buy-In

Q&A with Berit:

Our strategic focus is to move what matters to our clients through developing their people, their business and their solutions. There are essentially two strands to our work: the first, is a consultancy service where we help clients to develop and implement strategies that will achieve the transformations they need in order to reach their goals; the second, is an open enrolment course, where we develop leaders, project managers and key specialists across different companies. We have found that people enjoy coming together with other people, from different sectors and roles, to develop themselves.

Our work includes supporting both private companies and working with public sector entities, as well as organisations such as the UN, and spans many different industries - in particular, energy, infrastructure, construction, financial services (including pension funds), production and pharmaceuticals. We have office locations in Denmark, the UK and Sweden, and globally we have 200 associates that cover around 25 countries to support our clients across a wide range of locations.

Sustainability is one of ten core areas of expertise that we focus on. It is what we call a 'signature' area, so it is also included and integrated within other areas, such as leadership, project management, strategy implementation and transformation.

Could you tell us about the Mannaz Sustainability Transformation Index?

We designed the index ourselves in close collaboration with customers and other partners. The index is designed to help structure and qualify conversations around sustainability transformation. It does so by equipping those who are responsible for the organisation's sustainability with an overview of the internal perception of the organisation's sustainability transformation performance.

To assess where your organisation is on the Index, you can simply scan a QR code and fill out the survey, which will then generate a response recommendation. This can be tailored to you as an individual and/or set up so that the recommendation is calculated based on responses from everyone across the business. The latter will enable you to see which level of transformation the organisation is perceived to be in by those working across the business; and often this can show very markedly different results from person-to-person, as some will perceive there to be more progress and more development in sustainability than others who are perhaps less engaged in, or less aware of, what is happening in this area.

There are five levels under the index: level one is ad-hoc sustainability activities, the second involves written formal commitments, the third level is action, the fourth level is measurement and then, finally, the fifth level is about communication and transparency. Through the index we try to capture pain points where we can see companies struggling and then work with them to identify solutions. The index is there to help organisations focus their sustainability efforts, and to spend their time and resources wisely in order to move ahead.

So, thinking about what the levels typically look like in practice, at level one you have these ad-hoc sustainability efforts, which is often where organisations start. Here, they may claim that they are doing things, or they may have the perception that they are doing things, but their efforts are quite scattered and so it's hard to really have an impact. The first step for organisations at level one is to choose one or a few commitments to formalise the work they are doing around sustainability. In identifying those commitments, it's important to choose one or two areas where you feel you can make a real difference.

Secondly, choose something that's important to your stakeholders - if it's something that matters to more than yourself, then you're helping not only your company to succeed, but also appealing to your customers and others in your broader value chain. The Ten Principles of the UN Global Compact is an example of a broader commitment, but there are also Science Based Targets, which are examples of more specific commitments.

Then we move to the action level. It's one thing to make a formal commitment in a particular area and publicise this, but then you also need to get some action going behind it, and there's two parts to that. One is around ownership in the organisation - do you have that? You need to have enough people across different levels on board with delivering your chosen commitment in order to be able to make a change. One of the recommendations to achieving this, for example, is to set attractive and motivating targets, or a combination of targets.

What we have seen in practice is that there has to be both pragmatic small steps and bigger ambitions, because if there are no ambitious targets then people think you don't really mean it. In a similar vein, if there are only the big net zero targets, then there is too little visible progress and people will question what steps forward are actually being made. In addition to synchronicity, the other part is getting people involved. Ask yourself, do people perceive that they are being involved, and what capability level do they have?

Then the fourth level is impact measurement. We need to be measuring actions and any improvement in impact based on those actions. This level is becoming increasingly important, as it provides a means of verifying that your organisation is working on sustainability and demonstrating what it is doing. We highly recommend taking measurements and making good use of that data to see if, and where, you are progressing.

This data can be used to help inform your customers and has become a product in itself. For example, you can use this data to verify that your products are partly, or fully, sustainable. And that leads to the fifth and final level of the Index, which is the communication and transparency stage. However, to reach that level you must have worked through all the other levels, because if you only communicate your commitments then you're at risk of storytelling, and maybe even greenwashing. So, ultimately, it's about communicating what you actually do and how, alongside that, you can help your customers, suppliers and investors succeed.

We are seeing a lot of investors being challenged due to them not being able to obtain the necessary data in this area from the companies they are investing in. Transparency helps them make the right decisions and supports them on their journey to being successful, but it is also really motivating for people within an organisation to see what the business is doing in relation to sustainability and what they should be proud of. So that's what the index is trying do it, it's trying to help organisations examine where they are currently in terms of transformation and to identify beneficial next steps to move themselves along the index and, ultimately, to where they want to be in terms of their goals.

Your article on the competencies and values needed to succeed with sustainability talks about the importance of buy-in within an organisation. What is your advice to companies experiencing challenges around engagement?

The article you mention explores the lack of buy-in and action in organisations, but alongside that there can be other obstacles, including a lack of data, sustainable solutions, or even capabilities. In addition, sometimes there is an issue if your organisational culture is only partially helpful. If we try to look at how to overcome these obstacles, then my advice would be to create strong collaboration, both across the business and, equally importantly, across its value chain. The focus here is on looking at your entire value chain and not just isolating your view. Sometimes solutions are out there and there are opportunities to learn and adapt from what others are doing to address similar challenges.

For the senior managers and leaders of a business, it's important to embrace the need to upskill in this area. That requires investing time in building a clear understanding of how the organisation is currently performing on nature and other wider sustainability and ESG issues - including the impacts, risks, opportunities and mechanisms in place to help make the right decisions and make a difference.

Another key element to consider is project management - and by that I mean the approach to project management when there is a nature or sustainability focus to the work. I often find a real shift takes place when project managers realise that by managing and reporting on these kind of projects in their usual way, they may miss delivering on the nature-positive benefits customers are seeking. Sometimes people don't realise that keeping on doing the same thing they have always done, can make them unattractive to customers who have set new ambitious targets on nature.

We really need the senior people on board. Of course, we can look to recruit outside talent with the relevant skill set to solve the issue, but working with sustainability, and nature specifically, is such a complex area that it's essential for the senior, experienced people within an organisation to be fully informed and on board. These are the key people who know the context, who are fully engaged, and have the depths of expertise and understanding around what is already being done in this area.

What learning points are there in terms of encouraging buy-in and excitement about nature from the top down in an organisation?

Start by having a focus... you don't have to do it all, right. While we have new regulation, such as the Corporate Sustainability Reporting Directive (CSRD) - which is about identifying and measuring your sustainability impacts, risks and opportunities - you don't have to cover everything, all at once. The key here is to identify where you can make a difference, where you are already having an impact, the risks you face, any interesting opportunities presented, what you can do and how you can keep on being relevant as an organisation. And that's how you get company boards and top management engaged.

An area we help organisations with is applying effective engagement principles; and one of these concerns addressing top management and boards, and speaking with them about what the future of the business looks like and how it stays relevant and attractive to its customers/clients. There is a concept we refer to as "joined forces" and which basically makes the point that commercial drive is just as good as being driven because you love the planet. Nature doesn't care whether you save it because it's good for your numbers or because you really would like to see more biodiversity. So instead of people excluding others, we should look at how we can help one another to succeed.

There is a very good study by UN Global Compact and Russell Reynolds Associates on what it is that makes top executive and board members buy into this agenda, and how they are successful in running businesses that both achieve sustainability targets and are financially good. The study found that 45% of sustainable leaders were "Born Believers" who were always passionate about the environment or social issues, while 43% were convinced by good arguments and the business case, compared with 12% who were what they called the "Awoken" and experienced a pivotal moment of realisation. The Awoken may include, for example, people who went to a glacier where you used to be able to ski, but which has now more or less disappeared.

When giving a presentation to a top management team in a financial services company, I shared this data as planned and spoke about what is motivating people to join these ambitions. When I made the point that one motivator is just as good as another, and that it's not simply about having always been on this agenda, two of the executives in the audience said to another: "...then it's not too late for you to join". The individual, a Chief Financial Officer, then got really engaged in that conversation and we continued to talk about the dialogue on the sustainability topic and the company's desire to advance its approach. I think sometimes people feel that because they didn't previously communicate about sustainability and nature, then they don't want to start because it would be inconsistent. But when people do join in this conversation, we make it possible to change the minds and opinions within our organisations; and I think that's really important, especially at the top level.

If an organisation has some ambitious and great leaders and has buy-in from the Board on nature, how should it then go about engaging stakeholders, customers and employees?

It is really important to communicate not only with one's own organisation but also customers and investors, and to consider how you can help them make the right decision. Often, we want to share the good story, we want to say, "look what we're doing, look how attractive we are", but from an audience perspective, they will be focused on figuring out how to become more sustainable in their choices. Therefore, a company's communications need to make it clear to the end-reader why they should collaborate with you and how doing so will help them achieve their aims of living more sustainably.

On the whole, many companies are not aware of how much investors are struggling with getting access to the data they need on sustainability, and nature specifically, in order to make informed decisions. For investors to be able to prove they've made a green investment, and/or are involved with a green investment portfolio, they need detailed and accurate data to maintain credibility and transparency and avoid exposure to greenwashing.

When it comes to reporting and being transparent, businesses need to consider whether they are providing the data their customers and investors need in order to succeed. The annual report is a key mechanism for reporting such information, especially when it comes to investors; but also to customers, to help inform their buying decisions. However, there is a balance between providing data and keeping the company's secrets - being too transparent could, for example, expose the secret mix of a company's product or offering, but providing sufficient data on key issues will help stakeholders understand the good work being done and appreciate how that aligns with their goals.

On a broader scale, those businesses with a strong focus on sustainability will seek to use their communications to move the needle on this agenda, because the more collective volume around these issues will encourage others to follow suit. So, there's potential to be part of bringing nature issues to the fore.

Initiatives such as the UN Global Compact or Science Based Targets for Nature, provide an additional level of structure and credibility to measuring, reporting and improving an organisation's sustainability performance. They also support corporate communications - creating a kind of transparency around what a business is doing on key issues, what it's investing in, and a framework for setting new targets. However, when using endorsements like these in such communications, it's crucial that corporate actions live up to the commitments and pledges made.

Another valuable benefit of these collaborative programmes and initiatives is the external guidance and structure they bring to your reporting. The UN Global Compact, for instance, provides guidance covering 10 key principles and encourages organisations to commit to a number of Sustainability Development Goals (SDGs). They also have accelerator programmes and are taking pro-active steps to upskill people. In a similar vein, EcoVadis, which provides sustainability ratings and insights for businesses, helps organisations to manage, measure and improve their sustainability performance, providing recommended corrective action plans. All of these kind of external endorsements and public commitments help businesses communicate who they are and what they are working on, while also helping identify areas where progress can be made.

While the financial reporting model is very black and white, sustainability reporting is more fluid, and evolving. And so perfection isn't necessarily expected, but how do you encourage businesses to communicate imperfection?

That's a really good question. I think that everyone working to improve their sustainability or improve their impact knows that it's complex and hard to get absolutely right. We all have imperfections and, having worked with the sustainability agenda for many years, I've seen how organisational attitudes have changed - previously, it was much more about "oh there's an imperfect part of this case, so we cannot use it", but now everyone who works in this area understands it's a constant work in progress and we all have these imperfections. Sustainability really is a complex field, and where perfect is the enemy of good and the enemy of getting things done. So we have to dare to pilot solutions and see what works. One of my clients has a saying that is spot on in this respect - they say, "test early, fail small, learn fast". If you test early, then the failure will normally be smaller and that's much more comprehensible, it's much easier to work on.

We tend to think that in order to be credible, to be trustworthy, we should be the most impeccable counsellors, so that others wish to work with us and buy from us. However, with sustainability you also build trust with your stakeholders by daring to be transparent about the challenges you are tackling in order to improve your impact. And because we all know that it is challenging to improve impact, we have to find a good balance between ensuring confidentiality when that is needed but also being transparent; and I think managing that balance becomes more comfortable when we know that others are imperfect too. Given there is an increased awareness of the risks of greenwashing, more organisations recognise the value of communicating their sustainability imperfections and how they plan to improve upon them through verifiable actions, rather than trying to look good and potentially being exposed to greenwashing.

Would you agree that to fully understand the sustainability journey of a business and the progress it's making, you need to look at more than just one or two of its sustainability reports?

Yes, absolutely, and I also find that sometimes people say that they'd rather not report at all. However, reporting in this area is becoming an expected and mandatory requirement in line with changes in the regulatory environment, but while the transition takes place you can still choose not to disclose your data. The important point to note here is that businesses may find their customers, investors and wider stakeholders choose not to select them on this basis; and they may not even realise that is why they've not been selected.

As an example, I hear representatives of some of the larger international companies out there present at conferences on this topic and share examples of how if they are evaluating two, almost equally attractive, potential suppliers, and one is able to provide sustainability reporting data and the other chooses not to disclose, then they will select the one with the data. That potential supplier may not have "perfect data" but if they can't get any data, they have nothing to work on.

Finally, in terms of upskilling, should every business train its employees to understand the language and issues around sustainability and nature, or is it ok to simply have pockets of knowledge?

The answer to this is that you cannot look at sustainability in isolation. Sometimes people want to focus only on their area, but sustainability is too complex. In my experience, as soon as companies get on board with the sustainability agenda and want to move on decarbonisation and nature, they soon realise that they don't have enough insight and are lacking sufficient skills and capabilities in this area. It's possible they are doing things they should stop doing, but often it's a case of they should be doing more and they need support with identifying what more in relation to sustainability looks like.

Each organisation will need to look at its own specific situation and consider what are its most important impacts, risks and opportunities, the regulatory environment around them, and so on - this evaluation and analysis is another area where upskilling is often needed. As well as looking internally, it's essential to also focus externally and enhance collaboration and innovation across the broader value chain, including both the upstream and downstream stakeholders, involving suppliers, customers, communities, and end-users. In addition, it's also important to look at where improvements can be made in terms of executing and progressing all of this activity and then communicating your data and actions effectively.

While it can be all too easy to sit back and argue the case for not doing anything and to avoid mistakes and imperfections, I think there's a lot to be achieved by grasping the sustainability agenda and seeing where you can really move progress forward.