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Perspective
09 May 2024
10 minute read

Sustainability DNA and the organisational mindset needed to accelerate action

The drive to a more sustainable and net zero world is not a choice, it’s a billion of them. A new set of organisational traits are required to be bold in these choices.  

Katherine Wannan
Jill Riseley
Victoria Whitaker

Embracing a sustainable and net-zero future is essential and is driven by bold choices. Businesses worldwide are recognising that their response to climate change hinges on choices at every level - from individuals to the entire organisation to its stakeholders. Taking action on both the risks presented by climate change and the enormous benefits – both in terms of averted damages and investment in resilience – is critical. 

The shift towards sustainability is complex and requires a significant change in how we view business ecosystems, supply chains, and workforce dynamics. This movement is akin to a revolution, demanding that sustainability be woven into the very fabric of an organisation. As sustainability pioneer and former US vice-president Al Gore observed, “the green revolution delivering clean energy is both bigger than the industrial revolution and happening faster than the digital revolution”.1

Infusing sustainability into an organisation’s DNA is essential to driving change

Many leaders appreciate this sentiment, with the 2023 Deloitte CxO Sustainability Report revealing that 61 percent of c-suite expect climate change to have a high impact on their organisation’s strategy and operations.2 However, there is a gap between this awareness and action, the CxO report also shows that while companies are taking action, it is less likely they are implementing actions that demonstrate they have embedded climate considerations into their cultures and have the senior leader buy-in and influence to effect meaningful transformation.3

Just as the digital era required a new way of thinking, so does the challenge of climate change. Sticking to outdated approaches could hinder both businesses and the wider community. The way forward involves redefining organisational values and practices to not only address current challenges but also ensure a sustainable future for coming generations. 

Achieving meaningful and swift action on climate transformation and sustainability necessitates a shift in mindset. Deloitte has identified a core set of traits observed in organisations taking meaningful action on sustainability as well as academic and business literature. These traits form the ‘DNA’ or characteristics that defines organisations as they actively reengineer the way they operate, organise, and behave to meet current needs while also supporting the capacity of future generations to fulfil theirs. Identifying these traits and understanding how an organisation excels or falls short can expedite its sustainability journey by establishing conducive conditions for change.

Sustainability DNA 

Source: Deloitte analysis 

There are a set of levers organisations can pull to activate these traits

Multiple levers can activate, enhance, and accelerate these sustainability traits for an organisation. In turn, this increases the capability of an organisation to meet the demands of the climate transition effectively. Selecting the appropriate levers is a critical choice for organisations if they are to ensure that action on climate is effective in the short and long term.

The following list  of levers can act as tools for meaningful change and guide organisations on how to organise, operate and behave.

  1. Reflect: Organisations will need to identify the key drivers of change within current state operating models and sustainability efforts. By reviewing and understanding how an organisation operates currently, leaders can better identify the goals and modifications that will be required for an aligned climate strategy, and the pain points that will need addressing.
  2. Structure: Components such as decision rights, team structure and inclusion should be reviewed to ensure they support the organisation’s strategy. The need for new teams or roles to support decarbonisation should be reviewed regularly. For example, new cross-functional teams may need to be rapidly mobilised to take action at pace.
  3. Capabilities: It is likely that new organisational capabilities will be required and built through formal, informal, and curated learning experiences.
  1. Strategy & Purpose: Leaders must start by committing to specific targets, such as net-zero, and then articulate the design principles needed to achieve their sustainability objectives. An organisation’s purpose should serve as robust frameworks for guiding decisions and behaviour, with consideration of impacts at the heart of operations.
  2. Policy & Process: Corporate policies must be designed to support sustainability ambitions across purchasing, travel, and metrics. Employees should be encouraged to work fluidly with evolving technologies and ecosystem partners, continuously adapting old and new processes to accommodate change.
  3. Technology and data: Innovative technologies and data can optimise net-zero actions. This begins with understanding the baseline, before setting targets to track and report.
  4. Talent: Organisations should seek to build green skills within their existing workforce and look to access new and emerging talent from the market.
  5. Culture: Sustainability needs to be embedded into culture and reflected in core values. This enables employees to rally around the organisation’s purpose to create economic, social, and environmental value.
  1. Roadmaps & Governance: Clear governance procedures and roadmaps should be in place to guide how, when, and where sustainability goals are delivered. Responsibility for driving sustainability should be formalised with clear accountable owners and forums for oversight, particularly at an Executive and Board level.
  2. Leadership: Leaders should commit to sustainability objectives, operate across ecosystems, and empower teams to act.
  3. Performance Management & Reward: Organisations should review the way that they define and measure performance, ensuring that incentives and rewards align to the sustainability ambitions of the organisation. This can include the addition of new metrics and KPIs at an individual, team, and organisational level.
  4. Case for change: Creative communication techniques, such as storytelling, should be employed to emphasise the importance of sustainability and the case for change around a business’ operating model. By making the consequences of action or inaction tangible and relevant, the rationale for a future state business model helps stakeholders gain clarity.

  

In an era marked by significant environmental challenges, the world needs organisations to act decisively, effectively, and innovatively to reduce their impact. It is time for a mindset change on climate transformation and sustainability, turning it from a looming threat into a compelling opportunity.

Want to know more?

Contact us about our Sustainability DNA scan to understand how to drive these traits across your organisation.

Co-authors: Emma Berry | Benji Prawer

References

  1. Al Gore, Keynote Speech, Ashden Awards Ceremony, 2017
  2. Deloitte, Deloitte 2023 CxO Sustainability Report, 2023
  3. Polly Hemming, Time is running out to reach our emissions target, and our path needs changing, The Australia Institute, 2023

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Katherine Wannan

Partner, Climate & Sustainability
+61437876663

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