They say “all politics are local.” So are effective sustainability strategies.
Translating global corporate sustainability ambitions into local market strategies is necessary for accelerating progress — although it’s no simple task.
Companies of different sizes and cultures face similar challenges and questions around how to meet the needs of local markets while moving globally in a unified direction — and managing a broader strategy rollout across markets at different stages of maturity. Just as sustainability teams see the brand and business opportunities of localizing sustainability, so do local market activist employees and communicators.
And yet, most companies aren’t communicating how their global strategies will play out locally — in their reporting or other channels. Beyond the occasional case study showing how an aspect of their sustainability pillars has been implemented at the local level, companies aren’t telling complete, data-driven stories.
As companies look to localize global sustainability strategies, there are three challenges they must address.
1. Global sustainability strategies show the ‘big picture’ at the expense of the ‘true picture’
Global sustainability strategies must be broad and high level enough to account for all the differences of the diverse markets they cover. Global strategy is, in essence, a company average.
But averages can deflect focus and investment from the solutions and regions that need it most — and where the greatest impact can be made.
There can also be an inherent bias leading to a focus on the most pressing social and environmental issues of where the corporate headquarters is located. At Davos, many leaders acknowledged that a “one strategy fits all” global corporate approach will not drive innovation and deliver meaningful progress, and a regional picture of impact and action is needed. While global sustainability ambitions are important, sustainability leaders must understand that their location and the maturity of that market can influence the scale and type of ambitions being set and not adequately consider other local markets.
There’s been increased awareness and interest from local markets wanting to understand how they can take their company’s global sustainability goals and strategy and make them relevant to local stakeholders. One Australian food and drink business conducted a local materiality assessment that used global issues as a basis for stakeholder engagement. It enabled them to go deeper into the high-level company wide topics and understand how the specific topics translated to the local market. By understanding which aspects to dial up or down and what sub-topics were most material to the market, they were able to interpret their global strategy in a way that resonated with local understanding and needs. This local market information could then be used by global teams to prioritize resources and efforts.
2. Local regulations are becoming global requirements
A market’s specific regulatory environment is a major factor in the necessary approach to sustainability. What’s bold and ambitious in one market may be mere compliance in another.
Local regulations are becoming global requirements and impacting markets beyond a single local market. In January, the Germany supply chain act came into force, which requires suppliers for German companies to comply with new requirements related to human rights and environmental risks and violations. As the European Union prepares for its own supply chain regulations, global corporate teams need to be able to understand the cross-market implications and take appropriate action.
While global sustainability ambitions are important, sustainability leaders must understand that their location and the maturity of that market can influence the scale and type of ambitions being set and not adequately consider other local markets.
When setting global ambition levels, corporate teams should engage with local markets to understand the implications of global ambitions in those markets, including how the global strategy will be implemented in each market. Considering, and answering these questions, supports prioritization and implementation plans at a global and local level. Some questions to ask include:
- Will each market be expected to deliver against the global targets equally?
- Will there be a minimum standard that all markets need to meet but where some markets will be hero markets?
- Are markets able to adapt the strategy depending on their regulatory or cultural context?
- To what extent can global teams support local markets to set and deliver sustainability strategies through financial and resource support?
3. Top-down sustainability strategies fail to translate at the local level
The idea that global and local perspectives conflict is quickly going out of fashion. The very concept of “local” isn’t easily defined by country or city. Sometimes different countries can share more similarities than two cities in the same country.
When working with a global strategy at a local level, common frustrations are around the slow responsiveness of global teams, the reluctance of ambition and the centralization of sustainability resources. An approach that allows markets to retain flexibility and freedom to set their own goals while having overarching, thematic goals has been a more promising approach allowing markets to adopt a matrix approach rather than relying on top-down pressure.
Thinking three-dimensionally allows one market to look horizontally for support in similar markets. Companies have found that other markets with similar politico-cultural makeup often have learnings that are invaluable in understanding how to set a localized strategy and the allies aren’t always the ones that are geographically closest. The Australian businesses found more similarities within the Canadian market than they did with closer neighbors.
When sustainability teams are lean and global strategies rely on a law of averages, harnessing learnings from similar markets can be extremely valuable.
To succeed, companies must design bold strategies that are agile and adaptive.
These must be built on incremental roadmaps and supported by strong internal and external governance models, which are based on constant feedback loops across the company ecosystem. This will ensure global and local teams have the flexibility to respond to internal and external priorities, can create relevant and actional narratives that go beyond averages and set a clear direction so that everyone, regardless of location, can get behind them and be a part of delivering progress.
This story originally appeared at GreenBiz
