switzerlanden
Sustainability leadership or déjà vu CSR?

Sustainability leadership or déjà vu CSR?

13-04-2016 | Column

Willem Schramade, Sustainability and Valuation Specialist within Robeco’s Global Equity team, has flashbacks of Groundhog Day.

  • Willem  Schramade
    Willem
    Schramade
    Sustainability & Valuation specialist

Speed read

  • Sustainability leadership goes well beyond being vocal about how important sustainability is
  • Old-school sustainability is too easy: no targets and limited accountability
  • Sustainability issues need to be internalized across corporate functions

In the 1993 motion picture 'Groundhog Day', a weatherman finds himself in a time loop, repeating the same day again and again. At some point he's in a restaurant and asks the waitress: “Do you ever have déjà vu?” She clearly doesn't understand the question: “I don’t think so, but I could check with the kitchen.” I often have a similar experience when asking corporate representatives about the integration of sustainability into their strategy and investment decisions. After a moment of confusion, they usually refer to their sustainability reporting - typically an underwhelming document that amounts to telling the world what kind of nice things the company does. This is old school Corporate Social Responsibility (CSR): too easy, no targets, and limited accountability.

Stay informed on Sustainable Investing with monthly mail updates
Stay informed on Sustainable Investing with monthly mail updates
Subscribe

The underlying problem: corporate silos

Many corporations have a highly motivated sustainability team in place that works hard to improve and communicate their firm's sustainability profile. But sustainability isn't an extra something that you can delegate to a separate team. For sure, such a team can be very useful and effective, but only if it manages to mobilize the rest of the corporation. That means having top management commitment, but also reaching key functions like operations, finance, IT and human resources. And this is where it typically fails, even at the most advanced sustainability players.

When I met a board member of such an advanced corporation, I asked him how they integrate sustainability into their investment decisions. His answer was sobering: they simply split the list of proposals into sustainability projects and all other projects. And for the former group, they even take projects with negative Net Present Values, since not doing them is not an option. What I like about that approach is that sustainability is at least prioritized. But this isn't integration, as you still don't know how valuable these sustainability efforts are, and whether they really should happen. It also means that top management fails in really making middle management change their approach. And that's what sustainability leadership is about: a multi-year change process.

Sustainability leadership: strategy, operationalization and internalization

That change process should eventually result in the internalization of sustainability issues across corporate functions, i.e. people in finance, HR, IT, etc. taking sustainability issues into account in their day-to-day decision making. To get there, top management needs to incorporate sustainability issues into strategy and operationalize it. This goes well beyond being vocal about how important sustainability is. It means that management understands very well how sustainability issues affect the corporation's competitive position and the ability to achieve its strategic objectives. Moreover, it makes sure that the strategic implications are operationalized into targets, resources and methods that middle management can use across all functions or silos. If management does this, it can achieve sustainability leadership and might even reinvent its business model. If not, you have déjà vu all over again.

Subjects related to this article are:
Logo

Disclaimer Robeco Switzerland Ltd.

The information contained on these pages is for marketing purposes and solely intended for Qualified Investors in accordance with the Swiss Collective Investment Schemes Act of 23 June 2006 (“CISA”) domiciled in Switzerland, Professional Clients in accordance with Annex II of the Markets in Financial Instruments Directive II (“MiFID II”) domiciled in the European Union und European Economic Area with a license to distribute / promote financial instruments in such capacity or herewith requesting respective information on products and services in their capacity as Professional Clients. 

The Funds are domiciled in Luxembourg and The Netherlands. ACOLIN Fund Services AG, postal address: Affolternstrasse 56, 8050 Zürich, acts as the Swiss representative of the Fund(s). UBS Switzerland AG, Bahnhofstrasse 45, 8001 Zurich, postal address: Europastrasse 2, P.O. Box, CH-8152 Opfikon, acts as the Swiss paying agent. The prospectus, the Key Investor Information Documents (KIIDs), the articles of association, the annual and semi-annual reports of the Fund(s) may be obtained, on simple request and free of charge, at the office of the Swiss representative ACOLIN Fund Services AG. The prospectuses are also available via the website www.robeco.ch. Some funds about which information is shown on these pages may fall outside the scope of the Swiss Collective Investment Schemes Act of 26 June 2006 (“CISA”) and therefore do not (need to) have a license from or registration with the Swiss Financial Market Supervisory Authority (FINMA). 

Some funds about which information is shown on this website may not be available in your domicile country. Please check the registration status in your respective domicile country. To view the RobecoSwitzerland Ltd. products that are registered/available in your country, please go to the respective Fund Selector, which can be found on this website and select your country of domicile. 

Neither information nor any opinion expressed on this website constitutes a solicitation, an offer or a recommendation to buy, sell or dispose of any investment, to engage in any other transaction or to provide any investment advice or service. An investment in a Robeco Switzerland Ltd. product should only be made after reading the related legal documents such as management regulations, prospectuses, annual and semi-annual reports. 

By clicking “I agree” you confirm that you/the company you represent falls under one of the above-mentioned categories of addressees and that you have read, understood and accept the terms of use for this website.

I Disagree