How to Build Your Sustainability Office
By Thomas Birnmeyer and Lin Grensing-Pophal
In 2021, Intel ranked 47th on Barron’s annual list of America’s 100 Most Sustainable Companies – certainly an honor, but a fair distance from the top. In 2022, though, Intel climbed to the number one spot. How did the company make such a big jump in the rankings? One big factor was an increased focus on water sustainability, according to Barron’s. However, Intel took other important steps as well, including establishing clear new sustainability targets and promoting longtime employee Todd Brady to the new position of chief sustainability officer. That’s a lot of change for a company whose sustainability programs go back many years.
Corporate sustainability certainly isn’t new – Patagonia’s forebear, Chouinard Equipment, changed its whole business model in 1970 because its best-selling rock-climbing product was damaging the rocks – but many companies are still early in their efforts to create sustainable systems, processes, and infrastructures. Some, such as Intel and SAP, launched major initiatives more than a decade ago, while others have done so more recently because of regulatory mandates or growing demands from key stakeholders – employees, customers, and communities.
Intel’s Brady encountered the idea of sustainability years ago in engineering school in Utah, where emissions trapped by cold air inversions caused big air quality problems. “I spent my final winter semester engrossed in this real-life problem that had science, engineering, and policy implications. Our classes were lively, identifying and debating solutions, and I was hooked,” he says in a 2019 interview.
But it takes much more than a passionate employee, or several of them, to reach a maximum sustainability effect. Even an entire sustainability team or department, if working alone, can’t deliver the results that both companies and the planet need – not if the rest of the company thinks sustainability “is someone else’s job.”
For a meaningful effect, sustainability must be embedded into the core strategy of the company and into multiple functional roles throughout the organization.
There’s a clear payoff for achieving this organization-wide focus: Companies that assign sustainability roles and accountability to a wider set of employees are more likely to expect higher revenue, according to SAP’s research. They also have a greater understanding of the positive correlations between sustainability and profitability as well as sustainability and competitiveness.
This doesn’t mean there’s no role for a sustainability program or department. Quite the opposite – the goal of any sustainability team should be to build expertise and processes throughout the other departments in the organization. This in turn means your sustainability department needs a unique blend of knowledge and skills, depending on variables including industry, business model, and corporate culture.
Here, experienced sustainability leaders share steps for establishing, structuring, and staffing a high-impact sustainability function that can build and support company-wide action in your organization.
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Steps to formalize your focus and staff correctly
A focus on sustainability is a journey, not an endpoint; any sustainability department will continue to shift and evolve based on both internal and external pressures. For instance, Intel shifted more effort toward water sustainability, a developing global concern. Environmental impacts and consumer concerns will continue to change. There are, however, clear common steps required to create and formalize a process that works toward the goal of company-wide focus and participation.
Step 1: Ensure connection to corporate strategy
For ESG programs, “disconnected from strategy” translates to “doomed to fail.”
In October 2021, American Productivity & Quality Center conducted a survey of 316 participants to identify the characteristics of effective programs focused on “sustainability, ESG, corporate responsibility, and corporate social responsibility.”
The majority of respondents, 60%, reported that their sustainability departments had been in place for 5 to 10 years. The structure of these efforts varied, but the largest segment, 34%, had a dedicated sustainability function or department.
Sustainability in these organizations was integrally tied to corporate strategy, with 48% of respondents saying that they first developed their corporate strategy and used it as a guide to develop a sustainability strategy and 50% indicating that sustainability was one of their strategic objectives. Only 3% said there was no connection between corporate and sustainability strategies.
Even better news: in new 2022 research from SAP Insights, 87% of respondents said sustainability measurement and reporting on environmental issues informs their companies’ strategic and operational decisions to a strong or moderate degree. (Read more in the full report, Does Your Company Have a Talent for Sustainability?)
At Intel, employee compensation is linked to how well the company is doing on its sustainability efforts. This unifying goal creates high-level visibility, creates alignment to corporate strategy, and ensures accountability.
Those efforts, while most effectively managed from the top of the organization, are not owned by a single function, but by the organization as a whole. And the organization as a whole should be rewarded for its efforts. Urvashi Bhatnagar, a healthcare executive and coauthor of the 2022 book The Sustainability Scorecard, recommends the use of a scorecard to clearly communicate these connections, “using a compass rather than a speedometer.” In other words, she says, “it’s about your direction, not your speed.”
Step 2: Connect all functions to the effort with structure and process
The clear connection to corporate strategy sets the stage for building company-wide support. That support yields the widespread participation necessary to do the work.
“What sustainability essentially does is help connect every part of the organization to each other so that nobody’s functioning in a silo anymore,” says Bhatnagar. “Sustainability really necessitates that every part of the organization can interconnect and work with each other.” (For more on the broader benefits of busting silos, read “Why Cross-Functional Work Is So Hard and What to Do About It.“)
Bhatnagar points to global manufacturer Royal Philips as an example of a company that is doing this well. Philips’ sustainability function is managed through an executive steering committee reporting to the CEO. The team’s focus “is to transform the organization and create an interconnected culture between business units so that they’re no longer siloed,“ she says.
Philips indicates that its key achievements have included “carbon neutrality in its operations, 100% electricity from renewable sources, over 70% of sales from green products and services, 15% of sales coming from circular revenues, recycling 90% of its operational waste, and sending zero waste to landfill.” Bhatnagar says these numbers illustrate “how mature-stage firms can employ enterprise-wide operational transformation to achieve their climate goals.”
In a smaller setting, the City of Coral Springs, Florida, also demonstrates the interplay between overall strategy and broad participation across multiple functions. The City’s decision to create an Office of Sustainability and add a full-time dedicated sustainability manager emerged during a February 2021 strategic planning process for fiscal year 2022. Coral Springs hired Monica Ospina in December 2021 to lead the office, to create a citywide sustainability action plan, and to educate residents on the importance of sustainable living. The plan identified three key areas of focus – financial, operational, and environmental – and Ospina says her background in environmental science helped the city fill a knowledge gap in that third area.
Step 3: Together, identify your unique staffing requirements
With roughly 130,000 residents, Coral Springs’ sustainability program needed a leader effective at outreach, communicating semi-technical information to a variety of internal and external audiences.
While those skills will have value in every organization, there’s no simple formula for staffing an ESG team. Different industries will place an emphasis on different expertise.
- Companies in energy production or transportation will have potentially large environmental impacts at the forefront of their sustainability focus. These teams might require, for instance, people with specialized backgrounds in energy management, emissions control, or climate change.
- Manufacturers of pharmaceuticals, firearms, or alcoholic beverages will have large potential societal impacts. They may look to leaders with backgrounds in public health, occupational health and safety, or consumer protection.
- A global services organization will face a wide range of regulations, market concerns, and expectations. It may require expertise in areas related to regulatory compliance, diversity and equal opportunity, labor-management relations, anti-corruption, or anti-competitive behavior.
At Intel, an engineering-forward company, Brady‘s engineering background can provide credibility within the company as well as insight into the operational and manufacturing processes that affect the company’s environmental footprint.
Programs in many industries find data analysts are vital team members, since measurement is critically important to evaluating the effect of sustainability efforts. Bhatnagar also advocates for including someone with a background in strategy.
Industry, business model, locations, size – all these variables affect the skills and knowledge your sustainability department will need. The processes established in Step 2, gathering input and involvement from across the organization, will help prevent blind spots as you identify your specific requirements.
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Step 4: Staff to address those requirements
Coral Springs had the relative luxury of starting with its new strategy and only then making hiring decisions for staffing the sustainability function. Ospina is a one-person sustainability office. But, while she acknowledges that her job requires a lot of work, she’s found a way to not only spread out some responsibility for sustainability but also to build an infrastructure that supports communication and understanding.
When she first joined the city, Ospina made an attempt to get out to meet with all of the directors, one on one, to both discuss any concerns they had about sustainability and to learn about any project ideas or initiatives directors had in mind. These and other inputs – including the results of a community survey – will inform the development of a sustainability action plan which will be presented to city leadership this fall.
But Ospina took her outreach efforts a step further by asking every department to nominate a “sustainability liaison” – an individual excited about sustainability with a strong knowledge of their department and its functions. This structure, she says, allows “communication to flow back and forth between the departments and the Office of Sustainability.”
By contrast, Talent Plus Inc., a human capital and talent management consulting firm with 100 employees, has grown its sustainability function more organically. The sustainability team formed as a grassroots all-volunteer project, with no full-time dedicated staff, says team lead Cody Pfeiffer, a Talent Plus management consultant. The makeup of the team ebbs and flows as some team members leave and others join. That, he says, “brings different passions and backgrounds to the team.”
The company has tangible results to show for its efforts; for example, this year Talent Plus committed to purchasing renewable energy certificates, accounting for 100% of its electricity use through renewable energy sources. They’ve also embarked on educational activities focused on sustainability related to clothing, cleaning products, and gardening, an effort that “has a ripple effect in each of our colleagues’ households as well,” Pfeiffer says.
Pfeiffer agrees that sustainability is a responsibility shared by the entire workforce. To that end, including a financial analyst from the company’s finance team is important because “so much of sustainability really comes down to ‘does this make business sense?’” Other members bring important strengths in coordination, communication, and research.
Step 5: Iterate
Whether your sustainability function is created formally or evolves from grassroots efforts, it’s valuable to step back and go through this systematic consideration of strategy alignment, company-wide representation, needs assessment, and then staffing requirements. And as the program matures and the organization changes, the process is worth repeating. Bhatnagar points out that is corporate sustainability is still an evolving discipline: “There are certain gaps that firms are just not able to fill at this time in history, because we simply don’t have that knowledge.”
Ultimately Bhatnagar says sustainability should become its own department, just like any other department such as finance or human resources. Centralizing oversight sustains momentum toward building sustainability focus and skills throughout the company. She recommends that this department be closely connected to the CEO, whether as a direct report or through a steering committee.
However your structure and staffing decisions unfold, Bhatnagar also notes that teamwork should extend beyond company walls. “We don’t recommend anyone try to reinvent the wheel for themselves,” she says. “Connecting with others – associations, trusted advisers – is going to be incredibly important as companies move forward.”
What organizations learn will drive future adjustments, iterations, and innovation. Along the way, communication will be key to keeping internal and external audiences informed of progress, successes and setbacks, and future plans.
At every step: Focus on continuous communication
In Coral Springs, in addition to relying on the influence of sustainability liaisons in the communication process, the city has initiated a number of other communication activities:
- An Earth Day pop-up event for city employees
- Sustainability trivia and an arts and crafts station in the staff lounge
- An internal newsletter sent out weekly or as needed to share new updates
- A quarterly newsletter sent out to the community
- Updates through their social media channels
The city commission plays a role through their social media accounts, Ospina says. She also regularly attends community events, “talking to people and really just bringing awareness to sustainability efforts in the city.”
That kind of ongoing, multi-faceted approach is vital for achieving internal and external sustainability stakeholder engagement, says Tom Corfman, an attorney and senior consultant with communications firm Ragan Consulting Group.
Corfman says one problem with corporate ESG communication is that it often has its roots in investor relations, and as a result is confined to an annual report.
While this group can play an important role, he says, “they don’t know news, and they’re not storytellers.” It’s better to rely on professional communicators who are typically more skilled in those areas, Corfman says, and communication efforts about ESG efforts should be a year-round activity, not a look back over the past 12 months.
While some sustainability programs do have dedicated communications professionals, others work through existing corporate communications departments. Either arrangement can work, as long as there is support from the top of the organization – even all the way up to the board level.
Bhatnagar says the continuous messaging related to sustainability must also be both top-down and bottom-up. Actions drive awareness: She suggests providing employee benefits that are aligned with sustainability, such as paying a portion of the cost of an electric vehicle.
Measures like that may seem beyond reach for some companies, particularly those early in their sustainability work. Even so, big steps are ultimately necessary for big results. Giving careful thought to the staffing requirements of a sustainability program can help meet those big results, one step at a time.
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