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10 March 2017

Aligning Sustainability Incentives

org charts

I've long preached that there is a pressing need to align responsibility for Sustainability with authority. There is no point in delegating responsibility for Sustainability targets to environmental managers, or worse, volunteer sustainability champions, if they have zero power to actually make change happen. Instead appropriate sub-targets must be embedded in the personal objectives of key decision makers. Stands to reason, but often neglected.

During the Corporate Sustainability Mastermind Group on Tuesday (more on this next week), I realised that this alignment principle doesn't only within organisations but also between them.

If a landlord is responsible for a heating system, but the tenants pay the bills, the landlord will go cheap on the system as efficiency is not their problem. If the heating bills are split equally between tenants rather than individually metered, then there is less immediate incentive to cut consumption. If a purchaser is responsible for disposing of packaging, then there is little incentive for the supplier to provide recyclable or returnable packaging. And, as the Carbon Trust found with Walker's Crisps, if potatoes are bought by wet weight, then suppliers are incentivised to artificially hydrate the potatoes even though Walker then has to waste energy evaporating off that excess water during the frying process.

In all these cases, there are ways and means of changing the agreements between the different parties so those who have the power to change are fully incentivised to do so, either financially or contractually.

 

 

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25 March 2015

Sustainability Across the Generations

CoSM10

Last Friday we held the tenth Corporate Sustainability Mastermind Group meeting at the wonderful Lumley Castle in County Durham. The topic was 'Sustainability Across the Generations" – how do Baby Boomers, Gen X-ers and Millennials respond to the sustainability agenda?

As usual there was no Powerpoint, just facilitated discussion using one of my large templates (which you can see on the table above). We generated a whopping 78 learning points. Here's a selection of those:

General Generational Issues

  • You need to listen to the pulse of the organisation;
  • Generational profile of customers more important for B2C than B2B organisations;
  • There is an age profile up the reporting structure of established organisations; those with authority tend to be older, but we need to attract the next generation in towards the bottom;
  • As people age they tend to become more pragmatic and less idealistic;
  • There is a regional context – eg US millennials are quite different to Chinese millennials.

Baby Boomers

  • This is the generation which first became broadly aware of sustainability, for example via Silent Spring;
  • Anathema to ‘waste’ may be a more powerful hook than, say, climate risks;
  • Some may fear that their skills will become obsolete in a low carbon world;
  • “We’ve always done it this way” is a tough barrier to overcome;
  • Legacy is a powerful driver – especially for senior management – what kind of organisation would you like to leave behind you?
  • Coaching is often better than training for this generation – ‘arm around the shoulder’;
  • “I would like your help with…” is a good opening gambit.

Generation X

  • Grew up with the maturing sustainability agenda, eg the 1992 Earth Summit;
  • The ‘change generation’ – sees upsides and downsides;
  • This generation is now moving into key decision making positions – an opportunity but also a threat as they have plenty on their plate;
  • Probably the generation where engagement can have the biggest impact;
  • Co-inventing solutions secures ‘skin in the game’;
  • Find ways to communicate “What’s In It For Me” – eg build links between sustainability and their KPIs.

Millennials

  • First consciously green generation – but they often respond to activism more than working through the system;
  • Can be naïve about their own impacts – eg on upgrading technology/fast fashion;
  • Graduates are definitely applying to companies with good reputations;
  • Less loyal to corporations – if they don’t like what they see, they will move on;
  • Have been educated on the basics of sustainability, need to learn how to implement it in practice;
  • Social media can spread untruths as fast or faster than truths – fosters a lack of fact-checking;
  • A good tactic is to challenge millennials – “if you think this is important, set up a team and write a proposal.”

The Corporate Sustainability Mastermind Group is a small group of senior sustainability professionals from major organisations who meet quarterly to explore a burning question in depth. If you want to learn more click here.

 

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