Understanding sustainability, exploring climate change

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With constant pressure from regulators and environmentalists to develop more sustainably, the oilsands are continually examined under the public’s microscope. CBJ has had the opportunity to speak with dozens of executives in the oilsands who are committed to doing business in the most environmentally-friendly way possible, and who are developing oil reserves with climate change at the forefront of strategy considerations.

However, the mainstream media often portrays company efforts to build sustainability programs as red herrings. Stakeholders and publics are taught that companies are only delivering sustainability messaging as a façade.

While sustainability is still a burgeoning element of business, luckily, people in business are thinking about sustainability issues. In fact, executives are more aware than ever how important it is to develop sustainability initiatives.

A new report on climate change and the oilsands

As part of our sustainability series, CBJ contacted researchers at two Canadian business schools to learn about a report examining how companies understand climate change.

The report in question Thinking Long-Term: Climate Change and the Oil and Gas Industry, researched and written by Dr. Natalie Slawinski, from Memorial University and Dr. Tima Bansal, from the Richard Ivey School of Business, University of Western Ontario.

The significance of the report and its results came through the respondents’ answers.

Description of the study

CBJ spoke with Natalie Slawinski, who gave a thorough account of the study and its outcomes. Although the study focused on climate change, Slawinski said that the lessons learned could apply to a variety of business problems that require “achieving a delicate balance between short and long term.”

The research team identified eight best practices that they discovered leading organizations use in order to balance their short-term and long-term goals when strategizing to deal with climate change: companies use climate change as an opportunity to learn; they pay attention to the long-term benefits in addition to the short-term costs; they develop a strong vision to shape the future, embrace uncertainty, think beyond metrics, explore the future using scenarios, take time to understand the issues and avoid quick fixes and, lastly, companies build sustainability culture.

Slawinski explains the process of the study and the best practices that were identified.

CBJ: Can you tell us about the respondents in the study and what influence they had in their respective organizations on sustainability strategy development?
Natalie Slawinski: We interviewed an average of eight to 10 executives or managers from each company. How much influence they had depended on their position within the organization.

We interviewed a range of managers across each company to get a good cross-section of participants, including those in communications management. Our parameters were essentially a set of open-ended questions around climate change themes and discussions with people on how they make decisions on climate change.

CBJ: Did anything in particular surprise you about the respondents’ answers?

NS: What surprised me the most was how, on paper, companies can appear quite similar, if you look at their websites or sustainability reports—they tend to sound a bit alike and have similar initiatives. But if you talk to managers, and in our discussions, there are deeper nuanced differences—some companies were really focused on learning about climate change.

For some companies, it was not just a question about energy efficiency; they were doing much more than that in their organizations.

CBJ: One of your best practices focused on climate change as an opportunity for a company to learn. can you explain what that means? What can a company learn from climate change?

NS: If, as a company, you’re open to learning about those complicated issues, and willing to delve into them—that’s an important skill that companies need to have.

The world is only going to get more complicated—socially, economically, and the competitive landscape will become more dynamic, more fast-paced. Everything is changing, so being able to learn from an issue like climate change means companies will better be able to respond in the future to a whole range of difficult complex issues.

CBJ: Can you explain “staying the course” as a best practice?

NS: Inevitably there are going to be recessions and economic downturns, and these are times when it is very difficult to stay committed to the softer issues (like climate change strategy), especially when you’re trying to stick to your bottom line.

However, my experience in the interviews told me that companies are trying to stay the course during these rougher times. It’s not that they continued full steam ahead on their climate change initiatives, but they didn’t cancel those initiatives, they just pulled back.

Most often companies would keep some projects going related to sustainability, but not commit to the same levels of capital investment.

But one important point to note is that being committed to climate change or doing something about it as a company doesn’t only mean investing big dollars—it means being open to learning about the issues. There are lots of thing you can do without investing big dollars.

CBJ: Would one of those things be creating a vision, like your best practice?

NS: Yes. Often, the original vision for a company was created many years ago. Yet in some companies, the vision was still very prominent.

In general, it seemed like the role of vision in these corporations was really to get managers to think longer term. There is always so much pressure to think about the next quarter, it’s like almost a counter-balancing force.

CBJ: How can companies embrace uncertainty? Something tells me that might be a best practice that’s tough to swallow.

NS: That’s a tough one. Some organizations are more focused on metrics than other companies, and this focus was associated with a discomfort with uncertainty.

Other companies were more comfortable with uncertainty.  Basically, it comes down to leadership in the organization. Being able to embrace uncertainty comes from positive culture and leadership and if that leadership shows, then maybe it will be trickle down. It has to come from the top, and there has to be willingness on the part of leaders to act in the face of low certainty.

The key thing to learn—companies need to frame bumps in the road as learning experiences as opposed to frame those as mistakes. Otherwise, managers will be afraid to act without full certainty.

CBJ: Your report states that “firms were willing to take the time to understand the many complexities inherent in the climate change issue and avoid quick fixes.” How does simply making an effort to understand climate change and sustainability issues help companies move forward on them?

NS: When you start to go and extract you have to have regulatory approval, and regulators require you to do stakeholder engagement. There are many ways to go about this: some companies are very one-sided and distribute information to stakeholders while other companies actually try to engage in a conversation with their stakeholders.

The latter approach can be time consuming and costly—but there are long-term benefits.

No one knows what’s going to happen with the climate change issue, but you have to have your finger on the pulse and one way to do this is by engaging with stakeholders.

CBJ: How does building a sustainability culture play in?

NS: The organizations that really seem to have a sustainability culture, it really appears to come from the top, and is developed over a long period of time. Those companies, the ones with a culture around sustainability, they seemed to understand climate change the best.

Any cultural change doesn’t happen overnight, it takes time, and has to come from the top, but overall it can really have a positive impact.  

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