There are many economic and political reasons why businesses adopt sustainability policies, from reducing the risk of reputational damage through to ensuring continuity of supply and, of course, adhering to local environmental regulations.
Sustainability goes far beyond corporate social responsibility (CSR) and is much closer to the heart of corporate decision-making. It is increasingly embedded within the fabric of many large businesses, touching everything from recruitment, to the design and delivery of products and services, as well as the day-to-day management of offices and buildings.
It encompasses health and safety, compliance, public relations, marketing and—given the increasing number of reports referring to millennials preferring sustainable brands and ethical goods—it’s also about sales.
For board members this presents challenges on two fronts. Firstly, what is the optimal path for boards to lead by example where sustainability is concerned? What can they do to create a sustainable culture that permeates the organisation? Secondly, how can boards stay ahead of continually evolving sustainability issues, which may impact decision-making on a regular basis?
“A traditional approach to boardroom management is no longer sufficient,” says Stacie Swanstrom, executive vice president, Corporate Solutions, at Nasdaq. She has a point. There is an increasing requirement for businesses to create sustainability policies. A paper-intensive, quarterly focused boardroom may not be prepared to cope with shifting demands.
Creating a culture of sustainability
If organisations are setting out to create a culture of sustainability, it has to start with the board, and that means moving into the digital world, adopting an electronic approach to managing meetings, and gathering and sharing information. On a practical level, a board portal solution can help organisations in taking steps toward achieving a reduction of their carbon footprint.
Reducing paper consumption, and therefore paper waste, can have a substantial impact on an organisation’s carbon footprint. It’s not just about saving trees—there are cost and efficiency gains too.
“Organisations can save between 500 and 1,000 pieces of paper per board member a month using a digital board portal,” adds Swanstrom, who oversees global strategy and operations for Nasdaq Boardvantage, the company’s board portal and leadership collaboration software.
“If you consider the average board size is around nine to ten people, that’s up to 10,000 pieces of paper per board every month, and 120,000 every year. That’s a lot of carbon saved, but also significant cost and efficiency gains. No more lost board packs containing sensitive information, or having to reprint and compile vast quantities of documents because of last-minute changes.”
Practices set at the top are crucial when it comes to leading and driving sustainability, and ensuring investors and stakeholders are aware that the board is adopting progressive policies.
Board-related technologies don’t just help boards be more efficient, they enable boards to conduct business in a secure, stable and collaborative environment. Given the increasing pressures on decision-making and value-creation, the ability to share and act upon information quickly and securely is vital. Nowhere is this more relevant than in the drive to sustainability and managing potential reputational risks.
While sustainability has become far more central to business strategy and is a topic of increased importance for the board, it has by and large been driven by the investor community as well as employees and the broader public. However, this is also where sustainability, regardless of its positive impact, can also become a source of potential concern.
Feeding off the positivity that sustainability can generate is good for a business. The associated culture can improve loyalty and brand reputation, but it is also worth bearing in mind that it can also lead to problems if the board cannot stay on top of key issues. This is where a digital approach in the boardroom is needed.
The ability to react quickly and vote remotely on decisions should problems arise is invaluable. Thanks to automated syncing capabilities facilitated by a board portal, access to the most up-to-date information, and the ability to collaborate on decisions, means that boards can connect to address issues regardless of where they are located.
Further, they can make well-informed decisions, something of paramount importance when dealing with sustainability issues.
“We know that well-run companies are mission-centred, so if a company starts to build a culture around sustainability, it needs to adhere to it wholly,” says Swanstrom. “That of course means taking the rough patches along with the smooth ones. Risk is everywhere, from environmental impacts through to governance, compliance and sustainability.
“Understanding the pervasive nature of risk and being able to communicate securely and react quickly will stand any board in good stead.”
Swanstrom adds that deploying board portal technology as part of an overall digital transformation of the business could see significant gains in terms of cost-benefits, but also sustainability benefits. Reduced paper consumption is just one angle. When contemplating printer costs, binding, postage or couriers, travel costs and people hours, just digitising the board pack alone would see significant reductions.
“A sustainable business is by and large an exciting and dynamic business,” adds Swanstrom. “It tends to boost shareholder value as brand reputation grows on the back of it. It’s a good place to be for a business, and boards have an opportunity to drive this from the top.
“It’s perhaps the most significant strategic step a board can make today, to not just develop a sustainable culture, but to actually be sustainable, leading by example.”
This article has been prepared in collaboration with Nasdaq Corporate Solutions, a supporter of Board Agenda.