Most businesses have policies in some quantity, scope, and form. They may address one material issue or several related ones. Regardless of what sector you work in, your organization undoubtedly has some policies in place! Some of the most common ones that come to mind are: compensation, purchasing, and business ethics. Have you ever thought about how these and other policies are related to sustainability? Most organizations haven’t yet thought about this.
Why don’t we see businesses linking their policies to sustainability?
The simple reason is that sustainability is a new sphere of practice for businesses, especially among small to medium enterprises (SMEs). As sustainability practitioners, we often see that sustainability programs are nascent and associated policies nonexistent. The reality is that most organizations develop policies on a “need” basis or “on demand.” This is especially true when they experience pressure to improve operating practice and performance. And even then, they don’t necessarily think about the value of linking them to sustainability strategy or objectives.
So, what do we mean by developing policies through a sustainability lens?
Sustainability policies are used to communicate to stakeholders a commitment to managing environmental, social, and governance (ESG) aspects of sustainability. The best way to illustrate this is to look at some examples. Using the ones mentioned above let’s take them one at a time:
Compensation: Companies are linking performance and incentives to the successful implementation of their sustainability strategy. A well-designed compensation and benefits policy, and the associated benefits plan, helps attract, motivate, and keep talent. It also aligns performance with corporate objectives and goals, including ones that support sustainability.
Purchasing: Adopting a sustainable purchasing policy demonstrates an organization's commitment to natural resources conservation, reduced pollution and emissions, and public health and well-being. A formal sustainable purchasing policy can reduce costs and risks, and drive market innovation.
Business Ethics: A business ethics policy (or code of conduct) outlines the behaviors an organization follows to uphold ethical standards. This includes decisions it makes as relates to, and the impacts it has on, the environment and society. The policy forms the organization's values system with guidelines for proper behavior in all respects.
Policies such as these ensure that organizational values and guidelines and the strategic sustainability objectives are aligned.
Putting it together: how to use policies to support sustainability objectives and outcomes?
One of the ways to focus sustainability practice in any organization is to develop a portfolio of sustainability policies. They should express the company’s intent, commitments, and responsibility for key sustainability issues. The table below conceptualizes what a portfolio of sustainability policies might look like. It is not meant to be an exhaustive list, but rather representative of the types of policies that might fall under the ESG categories.
Note that these policies do not exist in isolation, but are aligned with strategic sustainability goals and objectives. In turn, they are translated into commitments that support measurable outcomes for the business and, by extension, for the environment and society.
So, how does one decide which topics to develop sustainability policies around?
An assessment of an organization’s most important sustainability issues will identify those areas for which a policy is warranted. For example, if a company has a strategic objective and/or significant issue with water it most likely will benefit from putting a water management policy in place. If it does not have an issue with hazardous waste it may not have a dedicated policy in that specific area. Regardless of the subject matter, sustainability policies improve the fundamentals of businesses in the long run and help transform behavior in favor of sustainable outcomes.
Building a portfolio of sustainability policies requires considerable research and thought. We know because we’ve done that research and thinking to create the Policy Builder tool for Sustrana’s online sustainability management service! Get in touch with Sustrana's CEO, Jennifer Anderson, if you would like to see how you can save a lot of time and effort!