The Role of Top Management in the Age of Sustainability

If Greta stirred up people’s consciences with regards to the environmental side of sustainability, Covid caused us to open our eyes on its social and financial impact, enhancing the fragility of our globalised and interconnected society and the unsuitability of the current global economic model.

The latest research by our Observatory shows a relevant increase of awareness –   57% of the companies vs 41.5 % in 2019 – that in order to be sustainable, a company needs to simultaneously respect the parameters of all three areas- environmental, social and financial.

A result that bodes well but leads to deep reflections and to a long-term strategical vision, which involves business people and managers on the front line. Those who are in charge of a company need to be able to manage this radical change, integrating the three parameters within the company strategy, or it’s not proper sustainable development.

A lot of aspects need to be taken into consideration by business people or managers, but we would like to focus on four of them from our Observatory:

Benefit from the support of experts

The importance of using sustainability experts able to redesign and reconsider the current production and consumption models other than design some new ones, is becoming more and more crucial to companies. The solution is not (or at least not only)  having engineers who perfectly know what the limit of C02 is in specific industrial processes. You need technicians and managers capable of integrating the principles and the choices for sustainability in the business model of the company they work for:  from designing new products/services to the management of the end of the cycle, from the balance of work time / personal life  of the employees to the impact of the benefits produced by the company on the local communities.

Include the social dimension in the sustainability development plan

From our Observatory, the gap between multinational companies and small and medium-sized enterprises is very clear, especially with regards to the social dimension of sustainability which today we are barely aware of.

In this area, only one company out of four includes programmes for the local community, whilst half of the sampled companies includes the additional benefits for the employees, with relevant differences between sectors and size class.

Clearly there is still a lot to do, but creating awareness and driving the top management- especially for medium-sized enterprises- is also up to us consultants, in order to include initiatives aimed at employees and local communities.

Get led in the easy finance industry

There is strong need of advising companies about financial opportunities offered to those who decide to integrate sustainability in their own business model.

Lack of budget and expertise are the major difficulties that almost one out of two companies  (46.1%)  faces along the path of sustainability.

A lot of money is available for the ‘sustainable industry’ which can be classified as follows:

– smart growth, to develop economies based on knowledge and innovation.

– sustainable growth, to promote effective economies in terms of resources, more eco-friendly and more competitive.

– inclusive growth, to support high-employment rate economies and promote the social and local cohesiveness.

It is important to get helped by suitable companies.

Keep regular communication with the stakeholders

Also communication should play a specific role in the process of sustainability but, as our Observatory shows, it is often forgotten or left as a minor element.

You just need to have a look here:

- Only 9.7% of the companies draft the sustainability budget.

- The share of the budget dedicated to the company’s sustainability communications is slightly over 5% of the total budget for communications, which in Italy it is known to be quite tight.

When you ask how the path towards sustainability is being communicated, the answer is mostly one: 'it’s on the website'. In other words, everything that the company is doing in terms of sustainability is communicated only, or almost only, on the website! In the case of sustainability this is even more surreal if possible, not only because communicating sustainability means earning in terms of reputation and sales, but also -and most of all – because the process towards sustainability itself is one of the main communication assets. The stakeholders who believe and support the brand need to regularly be in touch with the company and this leads to a new marketing model.

Starting from this data, it is understandable how the culture of sustainability still needs to grow through the company management maturing  process. The growth also needs to be stimulated through external measures, such as the legal ones, which speed up the staff one as well. Will finance play a key role in order to start the transition?

Elena Rabaglio, is co-founder of Mediatyche