By Melanie van de Velde, PhD
We see companies increasingly wanting to make more impact on our world, driven by customer demand, or to be attractive to new recruits (particularly the younger), or to leave a better legacy. But some impact initiatives are far more effective than others. And some can do more harm than good. Here are three pitfalls to avoid - from my own experience, and based on my research of more and less successful examples from around the world.
1. Missing the facts around the bigger picture
When I ask workshop participants how much the aviation industry contributes to GHG emissions most say between 10 and 50 percent. In reality the whole aviation industry actually contributes around 2 percent. A helpful chart by OurWorldInData (Oxford University) shows us the comparison with 24.2 percent caused by energy use in industry, with plastic alone contributing more than double the aviation sector over its lifecycle. 7.5 percent is caused by energy use in buildings.
Remember that 80/ 20 Pareto rule? This rule tells us that 80 percent of outcomes result from 20 percent of all causes. It is a valuable rule to keep in mind when you want your impact initiatives count the most. I am not saying that the aviation sector should not make improvements. But, aside from considering the positive aspects that travel can bring, understanding the facts behind the bigger picture can help to target investment, time and energy most effectively.
2. Jumping to dealing with the symptoms
This is a pitfall we see many companies fall into, even big corporates with large sustainability budgets. We saw Coca-Cola donating money to charities to install water pumps for local communities in India. Instead of being applauded they were heavily criticised as their manufacturing facilities were a major contributor to the severe water shortages in these regions, using enormous amounts of water in their production. They now create better outcomes by optimising their processes to use less water in the first place.
A good question to ask is whether you are dealing with the symptoms of a global issue that can be like 'mopping up with the tap wide open', or can you tackle the root cause?
3. Forgetting ‘GOOD’ commercial sense
When people have the ‘impact glasses’ on, they often forget what I call ‘GOOD profit drivers’ such as creating products and services that customers value, regardless of the impact. I have been there myself and have seen countless others falling into this trap along my research journey. For example, when a business offers opportunities to people from marginalised backgrounds, it is still important to select people who are right for the job and vice versa. And it still matters to offer value to the market. My research shows that those who do achieve a 300-400 percent higher success rate in terms of impact, as well as better business outcomes. Brigade, Goodwill Solutions and Ctalents are prime examples that get this superbly right. But they’re still a rarity. Yes, creating impact can lead to better customer referrals and drive business growth. But this only happens when you not only create good impact outcomes, but offer products or services that are highly valued at the same time. A good question to consider: 'How disappointed would your customers be if they could no longer buy from you regardless of your impact?'
Global greenhouse gas emissions by sector[1]
[1] OurWorldInData, 2020c