In the final installment of this series about how to build a sustainable business, I want to take a moment to reflect on the hard work and perseverance that goes into creating a meaningful and impactful sustainability program. If you’re a company that has put in the time and energy to craft a sustainability strategy, set goals, report on progress, and establish a charitable foundation — or even if you’re just now in the initial steps of your sustainability journey — you should feel proud. You are doing the right thing for your business, your people, and the world at large.
At the same time, the work of a purpose-driven organization is never done. This is a time to take stock and look to the future, identifying the steps that you need to take to ensure that your sustainability program continues to evolve, grow, and remain a top priority for your entire organization. In other words, you need to ask yourself: how do I build a culture that actionizes sustainability every day?
A governance structure for shared accountability
To drive ongoing accountability and sustainability action, it is crucial to have a governance structure that encompasses multiple levels of responsibility. Everyone in your organization should know how to personally advance overall ESG goals through specific, measurable actions.
For example, the Sustainability/ESG program at Flex including the climate-related governance structure starts at our Board of Directors and goes all the way down to the operations level. This means that the sustainability strategy set by leadership does not get lost in translation in our day-to-day operations. At the top, the Board of Directors oversees and provides policy guidance on strategic planning and risk management oversight, which is directly relevant to the sustainability program. To drive accountability at the Executive Leadership Team (ELT) level, executive compensation is tied directly to ESG goals and results.
Further down the organization, site-level sustainability matters are overseen by site sustainability teams, who are responsible for the development and administration of site-specific plans and report monthly to the Global Sustainability Team to ensure that every Flex site across 30 countries is making progress and to flag any issues that need to be escalated.
Within Flex, we have both the Executive Council, which includes our CEO and members of the ELT, and the Sustainability Leadership Committee. We meet quarterly with the Executive Council to share progress in key areas. The Sustainability Leadership Committee, which is a cross-functional group composed of leaders throughout the organization, meets monthly to share information and collaborate, which enables us to surface opportunities for a more holistic approach to our sustainability strategy and progress towards goals.
Ongoing monitoring, tracking, and reporting
A key element of having the right governance structure in place is that it enables you to collect information and insights at different levels of the organization. I have previously stressed the importance of monitoring, tracking, and reporting on ESG data and goals. This remains a crucial practice to make sustainability tangible and actionable for everyone in the organization.
It isn’t enough to rely on a single annual report to tell you whether you’ve met or failed your goals. The best practice is to have a cadence of continuous tracking and reporting, so that you can quickly course correct as needed. At Flex, we release our annual Sustainability Report publicly, but in the background our global sustainability program office team is meeting monthly with area owners (sustainability leadership committee) and at least quarterly with our executive leadership to maintain momentum and visibility of our progress.
When it comes to sustainability reporting, it is also important to hold yourself to a high level of discipline and data integrity, which will ensure that you can continue to trust and act on your data insights while preserving your organization’s reputation. This is especially critical as investors and governing bodies are scrutinizing companies’ sustainability claims more closely. A recent study from PricewaterhouseCoopers found that a whopping 87% of investors surveyed said that they think corporate reporting contains unsupported sustainability claims. In the same study, three-quarters of respondents stated that their confidence in sustainability reporting would be stronger “if it were assured at the same level as companies’ financial statements (i.e., reasonable assurance).”
Having a disciplined approach to your data collection, validation, and reporting process will help you to continue building trust with investors and other stakeholders, including your own employee base.
The importance of course correction
The other benefit of ongoing accountability check-ins is enabling your organization to course correct quickly when you are off-track. Having a high level of visibility into your progress towards sustainability goals — and a culture that rewards transparency and problem-solving rather than covering up unfavorable metrics — will allow you to make the greatest impact over time.
I recommend setting up an ad hoc committee comprised of cross-functional team members to tackle goals that aren’t being met. Having a dedicated group responsible for finding a solution and ensuring that they have buy-in and support from leadership, is the fastest and most effective way to course correct lagging goals.
Moving from passive to empowered employee engagement
Ultimately, you need to move from a passive approach to a proactive one to embed sustainability into your organization’s DNA — and to empower your broader employee base to always act with sustainability in mind. Consider companies that either lack a sustainability program or only engage with sustainability to meet regulations. Both these approaches are passive at best and will not inspire every team member to advance sustainability initiatives.
Taking a proactive approach requires thinking about how your company can help to solve the world’s most urgent issues, and to continue finding creative ways to involve the broader organization. Can the supply chain function be challenged to prioritize sustainability requirements at the same level as quality and cost? Are you considering human rights implications and fair labor practices when hiring a high volume of employees to meet heightened customer demand?
When employees are bought into this proactive approach, they are empowered to take their own part in advancing sustainability goals. At the individual level, any team member can make a difference through learning and development, volunteerism, or promoting inclusivity and DEI in hiring and management decisions. For example, at Flex, some of the individual labor practices targets that are tied to individual employee engagement include meeting an average of 40 hours of training and development annually per employee by 2025. Making alignment to ESG goals a priority in every single business decision demonstrates to the broader organization that sustainability is at the core of everything you do and creates a sense of shared purpose. As you continue your journey, you’ll find that building a culture that actionizes sustainability will surface new and rewarding ways to make a difference. If every member of your company feels empowered to make a difference, the positive impact you can make is significant and lasting.
At Flex, we may be over 20 years into our sustainability journey, but we continue to learn and evolve every day. My hope is that in sharing our experience and the lessons learned, we can all work together to make the world a better place.