Updated: Dec 1, 2021
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
People are often quick to point out that flying is one of the most evil things. Do you know how much the whole aviation industry actually contributes to carbon emissions? 1.9 percent. And this was before the pandemic. A helpful chart by OurWorldInData (Oxford University) shows us the comparison of this 1.9 percent with 24.2 percent caused by energy use in industry, and 17.5 percent by energy use in buildings. It shows agriculture and land use as another major contributor of 18.4 percent. Road transport contributes 11.9 percent.
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 we should fly across the earth for one business meeting as was common practice when I first started working. Each company has a unique context and is in a position to tackle certain problems better than others. 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 classic example that could have been avoided by asking how you can tackle the root cause as opposed to ‘mopping up with the tap wide open’ as a saying goes in The Netherlands.
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 upping customer referrals, a brilliant way to 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?'
Our Sustainability Business Strategy Masterclass provided in partnership with Future X offers a cutting edge framework to learn from best practices from around the world. You will be guided to avoid other typical pitfalls and apply key insights that lead to better outcomes to your context. It is for business leaders, (impact) entrepreneurs and consultants interested in how to powerfully start or move onto the next stage of your sustainability journey.
Global greenhouse gas emissions by sector
 OurWorldInData, 2020c