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All you need to know about sustainability committees

Junice Yeo

All you need to know about sustainability committees – as published in the August/September edition of Eco-Business magazine

 The existence of a well-structured sustainability committee not only serves as a critical coordinating function, it can also steer a CSR strategy into a competitive advantage for your business.

By Junice Yeo

Director (Southeast Asia), Corporate Citizenship

A Sustainability Committee by simple definition is a body that is accountable for the sustainability strategy and performance of the business[1]. Not only is it a core part of good governance in any company, its role is also to integrate both business and sustainability priorities so that the company is able to thrive.

There are several reasons why a sustainability committee is valuable. From our experience working with corporate social responsibility (CSR) managers from private and public companies, one of the biggest benefits of having a sustainability committee is that it can address all functions of a business.

The role of a CSR manager, by its nature, cuts across business operations and support functions to orient the organization towards a triple bottom line. Also commonly known as the ‘3Ps’ for people, planet and profit, this practice of taking into account not just business profits but also social and environment aspects of a company is increasingly valued by global companies today. A lack of sufficient backing from key decision makers to develop and sustain the company’s efforts to improve its environment and social practices can often result in resistance from parts of the business required to report or implement change.

As a coordinating body, the members of the Susta

inability Committee play a role as champions of CSR within the company. In fact, a good mix of coordinating executives, board level representatives and non-executives can be a powerful force to drive genuine engagement on sustainability issuesamongst senior leaders of the business.

How to form your own Sustainability Committee

Unlike ‘taskforces’ and ad-hoc committees that are commonly established within companies today, a sustainability committee should be a more permanent structure within the organization.

Members of the committee should put aside a regular timeslot over the course of the year to meet and update on the progress on sustainability matters. These could be high-level discussions on strategic planning, or updates on ongoing projects such as sustainability reporting or community investment decisions. This meeting needs to be regarded with the same level of importance as any other board-level meeting. Often, it can be scheduled right before or after a board meeting.

Sustainability Committees are usually chaired by senior-level executives in the organization. Examples of major companies in Asia whose sustainability committees are chaired directly by the CEO include ANZ Bank, Keppel Corporation and Shangri-La International Management.

The sustainability committee at Sembcorp Industries is chaired by its Chief Financial Officer, while StarHub’s is chaired by its Chief Marketing Officer.

If you are tasked with establishing a Sustainability Committee for your organization, here are three considerations:

  1. Start with the objectives of the business and the CSR team. Be pragmatic about the goals you have set in your sustainability programme.
  2. Establish who needs to be around the table. If you are working on a proposed list of committee members, make sure you list not just the names, but also their functions and areas where they are expected to contribute to the committee, based on their skill and experience. It should include representatives from all departments needed to deliver the programme. Do not forget your subsidiaries – they may possess certain strengths or face unique challenges that are important to the business and its stakeholders.
  3. Seek a range of different skills, attitudes and input; bear in mind the arrangement must fit with the corporate culture. Many committees fall into the trap of groupthink – the practice making decisions as a group, usually resulting in poor-quality thinking. Not only is this dangerous if bad decisions are mindlessly implemented, the time and resources wasted on ineffectual programmes can bring more despair than hope for stakeholders. A common practice among many companies is to include at least two non-executives directors on the committee – they are usually invited based on their expertise on particular sustainability issues relevant to the business.

 

Creating strategies for the long haul: Challenge or opportunity?

Corporate Citizenship’s latest publication Creating Resilient Strategies[2] addresses the challenges in aligning the business strategy process with the wider context of societal influences.

This year-long study – which included valuable insights from interviews with 16 global companies including Jaguar Land Rover and SingTel, analysed how companies manage strategically around disruptive forces such as regulatory changes, environmental catastrophes or even social media backlash that inadvertently impacts their business.

While coping with market uncertainty is not uncommon, many successful global companies manage to stay resilient, and even go on to create new business opportunities. Conversely, companies who fail to develop strategies that are sufficiently far-sighted and robust end up struggling to cope with a fast-changing operating environment. Vital opportunities for innovation and long-term growth could be missed in pursuit of short-term gains.

This drives home the point of the value of a well-rounded sustainability committee. Made up of the right combination of expertise and experience, the committee can provide the lens and context to address this sort of challenge – be it to work with external stakeholders to identify upcoming issues that the company may have overlooked, or to question why progress might not have been as fast as expected. Guided by its overarching corporate vision, this committee can be a powerful force for the company that not only contributes to sustained business growth, but also ensures it stays on top of its game for a long time to come.

[1] http://www.ceres.org/company-network/how-we-work-with-companies/board-charter

[2] Creating Resilient Strategies can be downloaded on Corporate Citizenship’s website www.corporate-citizenship.com, under Our Insights. [https://corporate-citizenship.com/wp-content/uploads/For-Website-Creating-Resilient-Strategies-UK14-lo-res.pdf]

Comment (1)

  1. NEDonBoard says:

    “A common practice among many companies is to include at least two non-executives directors on the committee – they are usually invited based on their expertise on particular sustainability issues relevant to the business” While 2 is not a pre-requisite, we would suggest to include 1 to 3 NEDs depending on the overall size of the committee.
    JP
    On behalf of NEDonBoard

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