If you want your sustainability efforts to count, the focus should be less about a single marketing claim or even a certification. To reap the benefits of positive perception and trust with your customers, employees and potential partners, you need to show credible action behind the sustainability headline.
Stakeholders are increasingly savvy about sustainability, especially seeing through hollow and superficial language. So what does a credible sustainability approach actually look like, especially for a small business that's still on the journey?
I’m frequently in the position of assessing businesses for the purposes of supply tenders, ratings evaluations and awards submissions, so here are the key things I look for beyond the marketing spin.
Taking practical action is certainly one area, but it’s not everything! You also need to show you’re embedding the foundations for change in how your business is run and engaging in the broader conversation beyond your walls.
This is article 3 in a series about certifications and claims. Check out part 1 on choosing the right certification for your business and part 2 on making sustainability claims without greenwashing
Foundations for change
In order for change to occur, there needs to be a clear case for why the current situation cannot continue, a vision for where you want to go, and a commitment to act.
Understanding impacts
Similarly, sustainability efforts must begin with an understanding of the business’ impacts. For me, reading a supplier tender response that asserts ‘we have no impacts’ is a huge red flag – every business, every product, even every person has impacts. These include both positive and negative, direct and indirect. Understanding that picture is fundamental to prioritising where change needs to happen.
Don’t know where to start? Check out the tool we developed with Sustainability Tracker and Xero for a 3-minute diagnosis of the priority impact areas for your business.
Data collection
True sustainability is about addressing real-world limits and engineering better ways of doing things, not just feeling good. So make sure to ground your decisions in real data. Measure your starting point so you can prioritise, track improvements, see what works, and communicate your efforts.
How do you calculate your ESG impacts? Check out this quick guide on collecting ESG data we wrote with Xero to get started or reach out to us for help.
Commitment
Next, establish your goal and commit to it publicly. Your credibility here will vary with how specific you are – a vague “we’re committed to managing our environmental footprint to ensure a healthy planet for future generations” is meaningless. So be clear on what you commit to.
Real targets are best, like a percentage change by a certain date. Specific commitments like ‘get 100% of our energy from renewable sources’ or ‘minimise air travel and prioritise virtual meetings where possible’ are a step in the right direction.
Check out our Sustainability Policy Template for guidance and examples!
Internal accountability and review
Commitments are meaningless if no one is responsible for delivering them. In a small or medium business, sustainability will usually sit alongside someone’s existing role rather than a dedicated position, but ownership still needs to be clear. Key individuals should be assigned responsibility for progressing actions and someone in senior leadership should oversee progress. As the saying goes, if something is everyone's job, it's no one's job.
As part of that oversight, it’s important to review on a regular basis – are we moving toward our goals? Did our actions have the expected result? And if not, how can we improve the approach or try something entirely different? In a larger business this may look like a formal report to the senior leadership team, but in a small business it may just be a quarterly task to check the numbers and shift direction as needed.
Taking real action
The next key thing I look at when evaluating any business is – what are they actually doing? Beyond the pretty commitment statements and targets, it’s critical to show you’re walking the talk by pointing to specific actions.
Basic housekeeping
In sustainability, there are some minimum expectations that are considered basic ‘hygiene’, with readily available solutions. These are the things that don’t win you praise or differentiate you, but their absence can lead to fines and reputational damage, and will absolutely undermine the credibility of any other sustainability efforts.
For example, paying your staff appropriately, having safe and hygienic working conditions, avoiding wasteful energy uses, minimising pollution and waste generation, addressing basic waste management, buying from reputable suppliers, etc. Don’t think of promoting a more sustainable product line or your volunteering activities until you’ve addressed these things.
For some specific actions, check out the ‘do less harm’ section of our Quick Start Sustainability Checklist.
Material impacts
Another key term to know in sustainability is ‘materiality’, which basically means the impacts that are most significant and should be a priority to address. Any action to reduce your impacts is great, but if you’re ignoring the elephant in the room, you risk losing credibility.
How do you understand what’s a priority? As noted above, the tool we created with Sustainability Tracker and Xero is a great place to start . Another great place to learn what’s a key focus for your sector is to identify any certifications that are relevant to it (check out part 1 of this series!). Certifications are developed by experts and industry leaders to establish what ‘good’ looks like for a product segment or type of business, so reading the standard is almost like getting expert guidance without the consulting fee!
For a small business with limited resources, this can even still be a longer list than you can manage. So to further narrow it down, consult with your staff and customers on what they think is most important for the business to address. You can also assess what actions are achievable and affordable for you as a small business while also making the biggest difference, i.e. quick wins and high ROI actions.
Continuous improvement
Sustainability isn’t a one-and-done, a policy you sign off and then put on a shelf. Credibility comes from the continued commitment to evaluating your efforts and outcomes and course correcting. Even failures aren’t a bad thing as long as you show you’re actively adjusting your approach and internal processes to do better in the future.
Tried an approach that didn’t work out? Talk about it! Write a blog or a social media post. Trying and failing is often far more engaging than an easy win, so share it, what you learned, and what you’ll try next!
Engaging externally
Sustainability cannot be addressed by any business in isolation. It’s a systemic challenge, and therefore requires consulting, sharing and collaborating. And as a small business with limited internal resources, it’s even more important to draw on the expertise and support of others.
Stakeholder engagement
One of the core principles of sustainability is to consult with the people who might be affected by your business or by the sustainability issues you’re looking to address. This may help you see any blind spots as well as offer new ideas and solutions. And importantly, genuinely responding to their feedback builds credibility and trust with those individuals and groups and shows you’re accountable.
It doesn’t need to be a formal survey or focus group. Simply ask your regular customers, invite employees to raise ideas, get to know your local community group. Find out what’s important to them and what they’d like to see you doing, be open about how you've considered their input, and make sure they can raise any concerns with you as they come up.
External initiatives and networks
Engaging with sustainability networks and initiatives shows true interest by a small business as well as being an excellent place to learn and collaborate. Being part of these networks gives you insight into how other businesses are applying their sustainability principles. It also enables a small business to do things they might not otherwise have capacity for by partnering on things like group purchasing or innovative initiatives.
There are many different networks available, though these vary widely between states, council areas and industries so check yours. Queensland (ecoBiz) and South Australia have good state programs for SMEs while Melbourne and Sydney offer the CitySwitch program. You might also want to check out your state Social Enterprise Network, many of which have ‘associate’ memberships for aligned businesses, or the UN Global Compact Network Australia (GCNA) small business tier.
Disclosure and transparency
Obviously no business can be credible in its sustainability efforts if it does not do so transparently. Trust comes from both reporting your progress honestly and sharing your journey openly along the way.
When it comes to reporting, or ‘disclosure’ as the industry tends to call it, you don’t need to produce a beautiful pdf report, although more businesses around the small-to-medium threshold are starting to do so. It can equally be a page on your website with a few key sections about your commitments, actions and progress. It's important to make sure this is a balanced view – not only where you’re doing well, but also about where you aren’t meeting your goals yet and how you’re adjusting your efforts.
But don’t stop there! If you only talk about your sustainability once a year, it won’t come across as very authentic. So make sure you’re documenting your actions along the way and sharing them on your social media, other parts of your website or in your store (physical or online). This is your opportunity to tell the story behind the outcomes, engage your stakeholders in your journey, the struggles and wins along the way, beyond simply a dry report.
Verification
Getting a third party to assess and validate your performance is certainly a big boost to your credibility. We’ve covered this in detail in part 1 of this series, as well as ensuring your sustainability claims are accurate and authentic in part 2, so refer there for more!
Building your business’ credibility
There is no single box you can tick to make your business credible. Not a certification, not a sustainability report, and not a clever marketing campaign. Credibility is built over time by integrating the foundations for change into your business, taking meaningful action, and engaging in the conversation beyond your walls.
You don't have to do every action outlined here either, but the more you do, the more you show your stakeholders you take sustainability seriously. And importantly, the more you'll embed the structure that turns your values and good intentions into consistent progress.