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  • Writer's pictureScott Jacobs

Accelerating inevitability for good…

…this was the joint mission that led George Hulbert and me to co-found The Bridge.

During (the start of) the COVID pandemic last year, I challenged my CEO and Board in my former role that we needed to develop a market-leading sustainability strategy that we would integrate into the core of our firm. I wasn’t sure if the firm would embrace, reject or just pay lip-service to the proposition. It turned out to be an (un)surprisingly easy sell in the end with the board and majority of the partnership willingly jumping onboard to make sustainability a priority both externally and internally in the planning for 2021 and beyond.

Something happened during 2020 that many would say has been ramping up for years both globally and locally – ESG considerations have hit their tipping point. The big switch I see is that organisations are shifting sustainability (defined in its broadest sense to include social, economic, cultural & environment concerns) from a nice to have to an imperative. In particular, organisations are grappling with how they integrate these considerations into the core of their business models to have a positive impact.

Challenging your business model

It is no longer enough to have a few community sponsorships and environmental initiatives off to the side of your business. Instead, our point of view is that this movement is challenging you to look at how you weave one or more of these considerations into the design of the products or services you supply, the specific customer segments you derive profit from and the overall value proposition you deliver. For example, If you are a construction company or consortium, how do you build this into your delivery model and solution to achieve better outcomes over the lifetime of the asset and beyond; if you are a professional services firm, how might this shape your core services to play a key advocacy role in leading the way; or if you are a healthcare business, how are you contracting to deliver better health outcomes that directly support wider social and cultural targets for the community?

The burning platform

If you supply to government, you will increasingly find that it’s no longer enough to deliver a best price / best offering solution at tender time. Broader outcomes are now central to the evaluation process of most significant procurements; and you will either need to get on board with the agenda or miss out.

In the private sector, many large corporates such as Woolworths and Unilever now have sustainable and social procurement policies that are as stringent, if not more, than most in the public sector - not to mention the activist approach that Blackrock and others are taking to challenge listed companies and the global investment community to get onboard with this agenda. We refer to this as a network effect that will impact you wherever you may sit in a particular supply chain.

It’s not just about doing what it takes to win business either. It’s an interesting turn of events when a group of private sector businesses join forces to lobby the NZ government to legislate and voluntarily impose regulations on themselves to grapple with a major social issue, modern slavery, that will force them to scrutinise their supply chains (see here). One CFO of a large, listed property group we met with recently said they have embarked on their sustainability programme because: “We challenged ourselves as to - would our current business model still hold up in 10 years from now? And we knew what the answer to that would be so we jumped into this now..” Companies are ultimately getting on board because it’s the right thing to do and arguably, inevitable.

This might all seem complex but our key message is to keep things simple. Start with your existing strategy and purpose - and look for ways to build on that to integrate broader outcomes into your underlying delivery model. You might even find it’s good for business.

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