"A systems thinker takes the time to understand the dynamics at play, dive below the murky water, and see the underlying issues."

Every domain comes with its own terminology. Leyla Acaroglu ran through some of them in Transform Your Business through Sustainability and Climate Leadership. If you read my previous posts on Sustainability, you’ll most probably know some of them like Systems Thinking.

Here Leyla also touched on the Iceberg Model where leaders focus on the tip of the iceberg instead of exploring the complexities, and the many underlying patterns and structures that build up over time to reinforce the problems we are trying to change.

Here are some additional concepts to familiarize yourself with:

1. Externalities The impact of actions taken against nature are externalized in our current economic system. As a result, the true cost associated with creating a product like the pollution or environmental issues that come about is unknown.
2. Resource Scarcity We are running out of many key resources like sand, copper, helium and phosphorus. The more we take from nature, the less resilient the systems are and the less likely we are going to be able to access those valuable resources in the future.
3. Ecosystem Services Intangible services that are provided for “free” by nature e.g. drinking water, food, medicine, minerals and materials.
4. Natural Capital All the living and nonliving assets that make up an ecosystem’s services e.g. climate regulation and natural defenses like flood or landslide protection provided by tree coverage and forests, mangroves, and oysters that protect coastlines.
5. Nature-based Solutions Actively restoring nature or designing solutions that are based on nature’s resilience.
6. Extended Producer Responsibility A policy approach where the full environmental costs associated with a product across its entire life cycle are included in the sale price. This internalizes externalities.
7. Product Stewardship A company acts as a good steward when it takes full responsibility for reducing the environmental impact of its product throughout its entire life.
8. Corporate Social Responsibility (CSR) A form of business assessment and self-regulation that seeks to reduce the impacts of activities and contribute to positive goals of ethical conduct, philanthropic activity, environmental stewardship, and socially beneficial actions.
9. Environmental Management Overarching approach to considering the direct and indirect effects of your company’s actions by understanding and working with the entire value chain and then taking full responsibility for the impacts of your business actions.
10. Divestment Policy Divesting inrelation to sustainability is about actively disengaging from companies, services or activities with negative environmental and social impacts.
11. Net Zero Draw down all emitted carbon through different strategies such as divesting, sequestering, or mitigation.
12. Carbon Positive Net zero + investing in addition cardon reduction beyond what you produce

"Every job is a climate job so we have this amazing opportunity to do better through our work and our workplaces."

Another term we often hear when talking about Sustainability is ESG (Environmental, Social, and Governance). Today I learnt it is a reporting framework, and a subset of sustainability. It is about analyzing companies based on past performance, determining how they perform against their peers, and enabling responsible investing by the financial sector:

Environment Pollution, climate change contribution, impacts to biodiversity and natural capital.
Social Ethics, diversity and inclusion policies to ensure organizations are paying fair wages, behaving ethically along the supply chain, and safely sourcing the products they produce.
Governance Policies, procedures, accountability and the ethics of the board and the organizational structure.

Using ESG reporting as a framework, there are 3 different assessments we can do to gather data and generate clarity on our impact and how we can improve:

1. Lifecycle Assessment (LCA) This is a peer reviewed process governed by ISO 14,001 as the benchmark for sustainability in product assessment. LCA data can then be used to prepare an Environmental Product Declaration (EPD). EPD is a type 3 eco label using data that is analyzed to share environmental and human health performance with consumers and suppliers.
2. Materiality Assessment is the main impact assessment tool used in ESG reporting a. Identify material topics against the E, S and G criteria
b. Engage stakeholders through focus groups, questionnaires, big data or interviews to collect data based on what they perceive to be material to the organization against the ESG criteria
c. Evaluate the significane of the collected data
d. Set priorities for action based on the generated insights and set up a reporting framework
e. Visualize your material issues via a matrix map to communicate your ESG performance
3. Social Impact Assessment a. Get proof to confirm that the workers working for your suppliers are paid a fair living wage, with appropriate and ethical working conditions
b. Create a set of standards for working conditions with your suppliers
c. Provide clear, transparent and fair pay structures, building in cost-of-living inflation annually
d. Spot check your subcontractors or suppliers are providing full transparency on the above
e. Check your raw materials against Material Safety Data Sheets to instil proper safety measures
f. Track and monitor processing of post-manufacturing waste

"Sustainability is about reconsidering the way products are produced, operations are managed, supply chains are created, and how stakeholders are engaged with."

Supply Chain is a common theme I’m hearing throughout the various courses on sustainability and this is no exception. Here are some steps Leyla suggests taking to start mapping out your supply chain, to enable the management of the impact of your products across their full life cycle:

1. Sourcing a. Raw Materials
b. Extraction Methods
c. Economic Impacts
d. Labor Rights
2. Suppliers a. Business Practices
b. Labor Rights
c. Environmental Policies
d. Governance
3. Distribution a. Transportation
b. Logistics
c. Packaging
d. Warehousing
4. Manufacturing a. All Operational Impacts
b. Pollution Management
c. Worker Health & Safety
d. Legal Compliance
5. Retailer a. Displays
b. Energy Use
c. Store Design
d. Shipping
e. Retail Packaging
6. User a. Functionality
b. Durability
c. Use Methods
d. End of Life Options

Wow, I didn’t plan on penning such a long Sustainability blog post. If you’ve made it all the way to the end, thank you for staying with me! Hopefully this has been helpful for you.

"One of the main goals of sustainability in business is to understand where impacts are occurring and then take sincere and significant actions to rectify them. You have so much opportunity to do this, and in doing so, the value you create is not just a deficit to the planet, but a benefit to society as a whole."