Why business needs to move away from sustainability silos

Almost every sustainability leader I speak to right now recognises that it's vital for businesses to move to an integrated approach if they are to tackle the interconnected social and environmental issues they face.

Sarah Giles, head of partnership development at The Fairtrade Foundation has noted the "greater efficiency and impact" that comes with integration while Ilaria Ida Walton, Mars' global socioeconomic impact lead recently reflected on the "potential for transformation" when social and environmental sustainability efforts are brought together.

These and other comments reflect the urgent need for new, more effective approaches to sustainability in business - but what do these approaches look like and who is getting it right?

At Forum for the Future, we work with wide-ranging partners - from IKEA to Nestle, Unilever to the World Business Council for Sustainable Development - and it's clear that the appetite for integration is there. What's holding businesses back however is the current dominant set up of isolating the E from the S in ESG. So despite leaders clamouring for more effective, integrated approaches, it is challenging to find strong examples of businesses actually doing it in practice.

That's why Forum for the Future, in partnership with IDH and Mars, has launched a practical playbook to enable this integration. A playbook that not only defines the business case for integration but presents six steps to breaking down overly simplistic environmental and social silos.

The business case for integration: Resilience, productivity and growth

The social and environmental challenges that our civilisation faces are closely interlinked. Environmental impacts on social outcomes are perhaps clearest. For example, climate breakdown will negatively impact everyone's living standards, but have an outsized impact on women, racial minorities and people with disabilities. Climate action, pursued with a ‘carbon tunnel vision' mindset, can also result in significantly negative unintended consequences for communities and societies.

Social impacts on environmental outcomes have been perhaps less obvious, but no less real. Reducing inequality and increasing the empowerment of historically disadvantaged groups also increases their resilience and capacity to address the environmental crises we face. A narrow approach focused only on improving income, for example, without integrating environmental considerations, could exacerbate overconsumption and resource scarcity. The alternative - a transformative approach driven by a just and regenerative mindset - involves using systems thinking to intentionally design targeted interventions that simultaneously address both social and environmental issues.

The business case for this alternative stems not just from more effective shaping of the healthy environmental and social operating context that all businesses need for long-term prosperity but from greater resilience, productivity and business growth.

Resilience is created through anticipatory regulatory compliance and more future-fit supply chains. Productivity is supported not just through operational efficiency, creating more impact from investment, but also through recruitment and retention. Business growth stems from the breakthrough innovation that an integrated approach can inspire, together with customer preference for brands that are creating positive change in more innovative, holistic ways.

So with the business case made, let's move to the six steps vital to integrating the E and S.

Start with leadership and culture…

The playbook draws on new desktop research and interviews, and our findings suggest that only businesses which had deeply embedded sustainability across their business had the sophistication and wherewithal to come up with smarter interventions. By smarter, we mean interventions capable of simultaneously solving for both social and environmental risks and opportunities. Looking at your leadership and culture, this starts with:

Showing visionary leadership. This is typically inspired from the top, essentially your CEO prioritising integration with courage and conviction. It is essential to equip all leaders in your business with the confidence, capability and language to understand how social and environmental issues are interconnected.

Creating a collaboration culture. Collaboration is essential to getting out of siloed ways of working. Ask yourself: ‘is your workplace culture cultivating collaboration or hindering it?' Supporting informal knowledge sharing and creating specific opportunities for cross-pollination of ideas and solutions is key.

Leveraging informal power. We find that these less tangible, ‘soft' drivers of informal decision-making are frequently neglected by businesses - but it's vital to reflect on them. The engagement of middle managers, for example, can be overlooked, blocking a more integrated approach from being implemented in practice.

…then build into structure, strategy and processes

The above steps address the less tangible enablers of an integrated sustainability agenda. Businesses can then address the more tangible aspects of ‘hard' governance by considering the following.

Restructuring to integrate. Consider how your current business structures are preventing joined-up thinking around people and planet. Some businesses have introduced roles that act as a connective tissue between teams working on socially-led and environmentally-led interventions. Independent advisory boards can also support here.

Unlocking strategic synergies. Look at both your business and sustainability strategies to unlock synergies between the two. Start by identifying the barriers and drivers to maximising co-benefits across the different material issues you face.

Leveraging formal processes. Formal business process can enable consistent operationalisation, from remuneration practices that reward integrated thinking to systems that encourage consideration of both social and environmental factors together. Take a creative approach to metric setting.

The bigger picture

Businesses embracing this integrated approach will not only make their organisations more future-fit through greater productivity, resilience and growth. They will be contributing to a much more fundamental shift: a reorientation of the purpose of business to serve people, planet and prosperity.

James Payne is global strategic lead for the purpose of business at Forum for the Future