You cannot read, watch or listen to the news today without hearing about the threat of a looming recession. Whether this recession comes to pass is as yet unknown, but what we do know is that companies are acting as if it has already hit, making layoffs and trimming costs. What does this mean for a company’s sustainability efforts and how can you help keep them on track? Or, better yet, amp them up in this uncertain environment?
We are Sustainability Veterans, a group of professionals who have held leadership roles in the world of corporate sustainability. We are exploring new ways to further engage and make a difference by bringing together our collective intellectual, experiential, emotional and social capital — independent from any individual company — to help the next generation of sustainability leaders achieve success. We have experienced the challenge of leading through a recession and share our hard-earned lessons here.
Language matters. “During difficult economic times, business leaders gravitate to what is most familiar, and it is easy cut what is perceived not ‘core’ to the business,” Mark Buckley, former vice president of sustainability at Staples and founder of One Boat Collaborative, noted. “In good times and bad, meet leaders where they are, and intentionally link sustainability with language that they understand regarding business risk and opportunity. This approach creates additive ‘sustainable/ regenerative value stacks’ for all businesses that in good times or bad cannot be ignored.”
Recessions may put options on the table that would not be considered in normal times.
Follow the money. Make the business case, emphasized Sarah Severn, who spent over two decades in senior sustainability roles at Nike and is now principal of Severn Consulting. “In 1999, we were midway through a major sustainability ‘action learning’ program across Nike when the Asian financial crisis hit. The key to maintaining the large investment of time and resources was making the business case, and we were able to demonstrate a clear ROI, either in terms of innovation or cost savings for all projects. The key to resilience is to ensure your program has strong internal buy in and can withstand economic volatility and headwinds.”
Trisa Thompson, a lawyer and former chief responsibility officer at Dell Technologies, advises to start with the data. “Numerous studies show that companies with strong CSR goals and focus outperform their counterparts during economic downturns, including the 2008 recession. And they recover more quickly. In addition, long-term sustainability goals drive innovation in a company, usually resulting in cost savings. Companies like Dell, Unilever, Walmart and Clorox have reduced costs through sustainability innovations, including reduced packaging size, recycling and reusing materials, sustainably sourcing materials and facilities improvements. Reducing costs will get the attention of leadership in your company.”
Dawn Rittenhouse, director of sustainable development for the DuPont Company from 1998 to 2019, agreed. “Focus on actions that you can put a dollar benefit on. These may not be the most material things that the organization should be working on, but they are things that senior leadership will see as contributing to helping the organization make it through the tough times: reducing energy and water use through employee initiatives, better managing supply chains to reduce waste, and training sales and marketing teams to better engage customers around potential sustainability projects.”
Think like a CFO, advised Kathrin Winkler, former chief sustainability officer for EMC, co-founder of Sustainability Veterans and editor at large for GreenBiz. “I started as CSO during the height of the 2008 recession. My boss gave me some good advice: Don’t ask outright for more; instead, be clear about what you can and cannot get done with what you have. Understand the company’s financial pressures and consider projects that can be financed from the balance sheet rather than with expenses. And avoid spending on SWAG or awards that would look heartless when people are afraid for their jobs.”
Align with your board, counsels Ellen Weinreb, a sustainability and ESG recruiter, founder of Weinreb Group and co-founder of Sustainability Veterans. “The CSO role is evolving and will require more CFO and board alignment. This was rare a decade ago. Directionally speaking, ESG disclosures will be akin to balance sheets and income statements — auditable, assurable and comparable. This implies more integrated reporting and alignment with the CFO. Board oversight and putting board-related governance structures in place are not only more common, they are required under SASB and other initiatives.”
Look ahead. “Assuming you have the right strategy and right-sized team, encourage your team to keep their heads down, execute and deliver measurable results for the business,” advised Lynelle Cameron, former vice president of sustainability at Autodesk and an ESG adviser to regenerative companies. “As the leader and CSO, it’s your job to look ahead and focus on what’s around the corner, anticipating macro forces that will shape the company and economy post-recession so that you can adeptly position the company to emerge from the recession ready for the next set of challenges.”
Seize the moment. Paul Murray started his sustainability recruiting firm, Integrated Sustainable Strategies, during the 2008 recession after a decade in sustainability, as vice president of sustainability at Shaw Industries and director of sustainability at Herman Miller. “What we saw then and what we see now is that recessions are an opportunity to course-correct. Despite layoffs at Microsoft, Netflix and Peloton, our phone is still ringing. We’ve seen rise in companies committed to initiatives like CDP, SASB, TCFD — all having ripple effects to a net increase in jobs.”
All of which requires CSOs to know their business and their leadership, according to Bart Alexander, former chief corporate responsibility officer at Molson Coors, now helping companies lead sustainable change through Alexander & Associates, and climate change action through Plan C Advisors. “Deepen your understanding of the drivers of your business and build trusting relationships with members of your leadership team. Then, during both good or rough times, your expertise will be valued as you advise on strategies for a lower carbon and more sustainable enterprise.”
Alexander continued: “Recessions may put options on the table that would not be considered in normal times. Seize opportunities for more substantive redesign.”