Professional Documents
Culture Documents
EXTERNAL CONTRIBUTORS
ROBIN NUTTALL
Co-author of Connect: How companies
succeed by engaging radically with
society and Partner
McKinsey & Company
PETER ZOLLINGER
Head of Impact Research
Globalance Bank
LAURA PALMEIRO
Sustainability Integration Director
Danone
JAN-WILLEM VOSMEER
Corporate Social Responsibility
Manager
HEINEKEN
SOFIE SCHOP
Senior Project Manager,
Communications
Sustainable Apparel Coalition
ALEXANDRA PALT
Chief Sustainability Officer
LOral
RICHARD KARMEL
London Managing Partner
Mazars UK
SALTERBAXTER CONTRIBUTORS
NIGEL SALTER
CEO
KATHLEEN ENRIGHT
Director Consultancy & Communications
OLIVIA SPRINKEL
Head of Salterbaxter North America
HUW MAGGS
Strategy Director
ROISIN GREENE
Account Director
KRISTINA JOSS
Senior Consultant
CAROLINE CARSON
Consultant
ARABELLA BAKKER
Director Consultancy & Communications
CONTENTS
02
06
10
Eye to eye
The behaviour gap
14
Robin Nuttall describe this as radical
engagement with society and Robin
talks more about this in our first article.
So this year in Directions (number 16!),
we decided to take a step back and
assess some of the gaps that still
need to be bridged. Dont get us wrong,
we celebrate and applaud the great
progress being made in many ways.
But our passion is in showing business
the commercial opportunity it can
gain if it goes beyond housekeeping
sustainability and truly seeks to connect
with societys challenges in order to
secure and drive long-term success.
There are gaps in policy, gaps in
innovation, the value-action gap, gaps
between ambition and reality, gaps
in knowledge and understanding,
gaps in finance, gaps in science.
We see them all as opportunities for
business to succeed rather than simply
as problems. Weve chosen a few
that we think capture the heart of
the debate. We know there are plenty
more we could cover too there
are gaps in our gaps! Wed love to
hear your views on these.
18
Speaking the
same language
The marketing gap
22
26
Say_Do/Practice_Preach
The implementation gap
30
34
Conclusion
02
03
WHO TO ENGAGE
Businesses need to develop strong
connections with several stakeholders,
including employees, governments and
regulators, the environment, and NGOs.
Employees both reflect and create
their employers brands. In addition,
employee morale greatly influences
financial performance. One London
Business School researcher, for
instance, found that companies listed
among the 100 Best Companies to Work
for in America between 1984 and 2009
generated 2% per annum share price
uplift versus their competitors.
Governments and regulators, meanwhile,
wield the greatest power of all over
business, and they require companies
to perform a unique and challenging
balancing act. Ignore government
and its influence will eventually catch
you off guard, we write in Connect,
commandeer it and you risk a backlash
from society further down the line.
Lord Browne in 1997 became the first
Big Oil chief executive to publicly
recognise the link between man-made
carbon emissions and global warming.
He believes the environment may be big
businesss most complex stakeholder.
The rise of technology and NGOs have
essentially given a new and powerful voice
to environmental concerns. Business
leaders should place their organisations
at the centre of transformative solutions
that make the low-carbon world an
attractive destination.
04
01
02
03
04
Engage radically
Finally, businesses must fully embrace
openness and transparency. As we write
in the book: To earn trust and credibility,
the private sector should engage the
external world on the front foot, building
lasting relationships which are based
on regular, authentic negotiation rather
than public-relations propaganda,
brinkmanship or passive silence.
WHATS NEXT
The future of public engagement
will be shaped by three main trends:
the rise of artificial intelligence;
the shift of the worlds economic centre
toward emerging economies; and
the emergence of a wealthier, bettereducated, and more empowered global
class than we have yet seen. This new
generation could be the most lucrative
in history for businesses. It will certainly
be the most challenging.
But we need not greet these disruptions
grimly. With the right guidance, the most
progressive businesses stand to gain
huge ground against their competitors.
Gaining support for these efforts will
require structured thinking around their
potential upsides and downsides as
well as a concerted move from the back
foot to the front foot in the way the
organisation engages with society.
05
PROFIT AND
THE INTEGRATION GAP
06
PURPOSE
07
09
TO
10
KEY OBSTACLES:
HABIT AND BIAS
Its easy to assume that a lack of
information is the main issue when
people fail to act in their and also
societys best interests. But thats
not the whole truth. Education alone
is almost never enough.
We should stop wasting resources
trying to de-bias employee mindsets
with greenwashing and instead start
to de-bias our organisational processes.
The decision to give in to temptation
and revert to old habits is a moment
laced with many nuances. Employee
engagement campaigns are designed
with the best of intentions to raise
sustainability awareness and influence
behaviour. Which is why its such a
shame that so many are formulaic,
rooted in unrealistic assumptions
about human behaviour and often lack
in-built measurement of effectiveness.
01. REMOVING
UNCONSCIOUS BIAS
Increasing employee diversity is
a key pillar in many organisations
sustainability plans, but this does
not automatically mean the people
in charge of hiring are making more
diverse or gender-neutral recruitment
decisions. To the contrary, many
companies continue to overlook the
best candidates in favour of the familiar.
Why? More often than not this comes
down to unconscious bias.
11
WE SHOULD STOP
WASTING RESOURCES
TRYING TO DE-BIAS
EMPLOYEE MINDSETS
WITH GREEN WASHING
AND INSTEAD START
TO DE-BIAS OUR
ORGANISATIONAL
PROCESSES.
12
PSYCHOLOGICAL SAFETY
STARTS AT THE TOP
According to Harvard professor
Amy Edmondson, there are
three key steps to building
psychological safety in
any organisation. Leaders
who want to create
an internal culture
of responsibility
should take note.
DO THINGS DIFFERENTLY
In order to win in an increasingly
uncertain environment, companies
need to do things differently. A final
word of caution: when organisations
try to optimise everything, its sometimes
easy to forget that success is often
built on human experiences. Ultimately,
its how our people and our teams
work together that brings about the
innovation and change.
01
Frame problems as
opportunities to learn
For the vast majority
of us, workplace
uncertainty, complexity
and interdependency
are constants.
Create a team
dynamic where
each member feels
comfortable to
ask for clarification
or help and
where they
feel their
input matters.
02
Acknowledge your
own fallibility
Leaders should demonstrate
a tolerance for failure by
acknowledging that they are
not always perfect and share
insights into how they learned
from past mistakes. This creates
a safe space to speak up and
encourages team members
to voice their opinions.
03
Model curiosity by
asking a lot of questions
This creates a need for team
members to answer the
question being asked and
have their voices heard.
13
C O N S U M E R
I N
B R A N D S
WELL-INFORMED
CONSUMERS CAN CREATE
THE DEMAND FOR BETTER
BRAND PERFORMANCE ON
SUSTAINABILITY CRITERIA
JUST AS THEY CURRENTLY
DRIVE THE DEMAND FOR
BETTER PRICING AND
QUALITY OF PRODUCTS.
TWO ROADBLOCKS:
CREDIBILITY AND
COMPARABILITY
There are some big practical
obstacles. One is the sheer challenge
in establishing credibility around
these sensitive topics, given that so
many consumers no longer trust big
companies to tell them the truth.
A recent study, by TNS for The European
Commission found that only about half
15
TRYING TRANSPARENCY
ON FOR SIZE
One industry that has made impressive
strides towards consumer transparency
is the apparel sector, thanks in no small
part to the work of the Sustainable
Apparel Coalition (SAC). The SACs
members are a whos who of leading
apparel, footwear and home textiles
companies, and theyre all being
encouraged to make comparable
sustainability information for their
products and brands publicly
available by 2020.
The SAC has developed a roadmap
to help members do this. But the big
question remains: how should all this
new information be displayed? What
does genuine transparency look like
in practice, and how much information
is too much?
16
50%
OF EUROPEAN CONSUMERS
SAY THEY TRUST COMPANIES
CLAIMS ON ENVIRONMENTAL
PERFORMANCE.
IS STANDARDISED
LABELLING THE
ANSWER?
As part of the pilot project, Salterbaxter
has been working with the SAC to design
and test a label that can meaningfully
communicate product-level performance
information directly on the shoe, plus
a range of supporting communications
that consumers can turn to if they want
more detail.
This is about giving shoppers the critical
information they need, clearly presented
and at exactly the right point in the
buying process when it can help them
decide whether to purchase or not.
The main challenge is how to distil all
of the environmental issues from the
full life cycle of a shoe into one easyto-understand label with one
performance score.
A few months into the pilot, were
already starting to unwrap some
useful insights. Weve found that
once consumers understand what the
initiative is about, many of them are
receptive and think the new labelling
will have a positive effect. But it is
also becoming clear that third-party
accreditation and/or verification of the
standard will be important to build trust.
Q&A
17
G
N
I
K
A
E
P
S SAME
E
TH GUAGE
N
LA
MARKETING AND
SUSTAINABILITY CAN
BE SEEN AS TWO SIDES
OF THE SAME COIN.
Working together with different, often
new, partners takes time. All parties
need to go through a learning curve,
develop a shared language and be
able to trust each other.
Collective ownership
A few companies have stepped ahead
of the curve in terms of spreading
ownership of sustainability out across
the whole organisation so that it can
drive innovation, generate employee pride
and create new market opportunities.
SPEAKING THE
SAME LANGUAGE
Marketing and sustainability can be
seen as two sides of the same coin. And
when we look closely at those two sides
and the language associated with each,
we can see that CMOs and CSOs are
often concerned about the same things.
Its just that when they talk about what
guides them, they arent using quite
the same terms. You say pot-ah-to,
I say pot-ay-to
CMO says today, CSO says tomorrow
We regularly meet CSOs who say they
are finding it difficult to get through
to a particular marketer who manages
a brand that is doing very well on an
existing strategy, which has them easily
delivering their targets and unlocking
commercial rewards. Telling such a
marketer that they need to change,
because we think consumers need to be
more responsible, is an understandably
tough conversation to have.
20
FOR A BRAND TO BE
CREDIBLE AND AUTHENTIC,
ITS PURPOSE HAS TO BE
ROOTED IN A GREATER
SOCIETAL NEED.
21
THE
INVESTMENT
GAP
Sustainable development
will never happen on the
scale thats needed without an
unprecedented injection of cash.
Salterbaxters Huw Maggs and
Kristina Joss note there are plenty of
reasons to be hopeful that change is
on the way. They talk to Credit Suisses
Dr. Ren Buholzer and Peter Zollinger
from Globalance Bank about how the
financial sector can step up to the task.
22
THE KEYS
INVESTORS HOLD
Before we look more closely at the
reasons for the investment gap,
its important to note just how much
financial power the investment banks,
mutual funds and other large-scale
investors actually hold.
LARGE-SCALE
INVESTORS HAVE
THREE MAJOR LEVERS
THEY CAN USE TO ADVANCE
SUSTAINABILITY IF THEY
CHOOSE TO.
Together, these organisations exert
tremendous influence on global
investment flows and stock market
movements. They pool huge sums of capital
on behalf of asset owners. And they
have the crucial role of allocating
capital to businesses based on their
expectations of future performance.
These investors have three major levers
they can use to advance sustainability
in the financial sector if they choose to.
01
They can advance the financial markets
from within by pushing for the markets
to factor environmental, social and
governance issues into company
valuations.
02
They can crowd in private investment,
making use of financial innovations
(new products, services, portfolios,
investment strategies and structures)
to make sure clients capital is directed
towards environmentally and socially
focused investments.
03
They can exercise their shareholder
rights of active ownership to directly
influence companies business,
management and strategy.
23
GAPS AND
OPPORTUNITIES
While we are observing signs of a more
systematic approach on the part of
leading investors, there are many gaps
that still need to be addressed across
the financial system before sustainable
investment can be scaled up to the
extent that the world needs. Heres
a quick look at five of the key gaps
which can also be seen as key
opportunity areas, where change can
take hold. And possibly already is.
01
02
24
03
04
05
Q&A
FLIPPING THE
SCRIPT COULD BRING
SUSTAINABLE INVESTING
INTO THE MAINSTREAM
CONVERSATION.
25
STEP 01
STEP 02
STEP 03
27
STEP 04
28
29
HANDLE
WITH CARE
31
CHANGING MINDSETS
Human rights has often lazily been
seen as something that rests deep
within the supply chain of large,
multinational corporations with
operations in developing countries.
This mindset needs to change if
business including companies of all
shapes and sizes is to respond to the
changing expectations of lawmakers,
civil society and corporate peers.
One of the strengths of the new UN
Guiding Principles reporting framework
is the focus on salient human rights
issues. This means evaluating the
businesss impact on human rights
32
THE OPPORTUNITY
FOR HUMAN RIGHTS
Human rights assessment should not
become a mea culpa. Too often (and for
reasons not unfounded), the relationship
between business and human rights has
been viewed with a degree of culpability.
However, just as business has shifted
from seeing sustainability as a burden
to an opportunity, so too do human
rights present business with the
possibility of showing leadership and
generating positive social impact.
Q&A
33
34
WHERE
ARE YOUR
GAPS?
01
INTEGRATION
GAP
05 INVESTMENT GAP
02 BEHAVIOUR GAP
03 INFORMATION GAP
07 OTHER GAPS
04 MARKETING GAP
How well are your marketing and
sustainability teams aligned?
HELP US
FILL IN
THE GAPS
01
Leadership gap
02
03
04
05
35
DIRECTIONS 2016
2016 SALTERBAXTER
SALTERBAXTER
ABOUT US
Salterbaxter is the leading international sustainability
strategy and communications consultancy. We help
companies and brands Step Up to the changing relationship
between business and society.
We combine smart strategy, sharp insights and creativity
to help businesses succeed. Whether its communicating
to investorsor opinion formers, engaging employees
or changing consumer behaviour, our work delivers
for our clients in three key dimensions:
01
PURPOSE
02
PERFORMANCE
TRANSFORMATION
Helping to find the new models and drive
the changes needed to fulfil the new contract
between business and society.
Contact us:
Samuel Griffin-Flynn
samuel.griffin-flynn@salterbaxter.com
Tel +44 (0)20 7229 5720
Olivia Sprinkel
olivia.sprinkel@salterbaxter.com
Tel +1 646 500 7906
82 Baker Street
London, W1U 6AE
14th Floor
375 Hudson Street
New York, NY 10014
36
salterbaxter.com
@salterbaxterMSL
ABOUT DIRECTIONS
DIRECTIONS:
Directions, now in its sixteenth year,
Directions, now in its fifteenth year,
is widely viewed as the leading annual
is widely viewed as the leading annual
publication on trends in sustainability
publication on trends in sustainability
and communications.
and communications.
Salterbaxter also produces
Salterbaxter also produces
supplements and events on
supplements and events on
key topics throughout the year.
key topics throughout the year.
2001
Trends in CSR
reporting
2002
Trends in CSR
reporting
2003
Trends in CSR
reporting
2004
Trends in CSR
reporting
2005
Best in show of this
years crop
2006
Is CR in your blood?
2007
Cutting through the
noise of the climate
change debate
2008
Sustainability
gets tough
2009
Mapping the
landscape of
European CR
2010
The Innovation
Edition
2011
Opportunity in the
new age of
uncertainty
2012
Profits from
purpose
2013
Authentic?
2014
Getting under
the surface
2015
The rise of science
2016
Mind the gap
CBP0005330610162129
82 Baker Street
London, W1U 6AE
Tel +44(0)20 7229 5720
salterbaxter.com
@salterbaxterMSL