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The business of positive change

Together, companies with purpose can effect meaningful environmental and social change
Katie Hill - Editor-in-Chief, My Green Pod
Alex Smith and Mike Penrose, co-founders of The Sustainability Group

This article first appeared in our COP28 issue of My Green Pod Magazine, published 30 November 2023. Click here to subscribe to our digital edition and get each issue delivered straight to your inbox

Main image: Alex Smith and Mike Penrose, co-founders of The Sustainability Group

Humanitarian disasters are unfolding around the world at a heartbreaking pace – in conflict zones and areas hit by extreme weather events, as well as in the spaces created to provide refuge for those seeking the basic human right to safety for themselves and their families.

Each event can feel like an isolated plea for aid, but the causes often stem from a foundation of injustice, which could be proactively addressed at source.

We’re increasingly choosing to support businesses committed to positive social and environmental change, meaning there is a huge opportunity for organisations to build meaningful action into their corporate purpose – and reap benefits for the planet as well as their bottom line.

A collective effort

Mike Penrose and Alex Smith co-founded The Sustainability Group in 2019 to make the path to
a sustainable future accessible to all businesses.

‘There was a lightbulb moment when we started The Sustainability Group’, Alex remembers; ‘it wasn’t enough for businesses to justify doing ‘bad’ by giving to charity to do ‘good’ – or having the classic goal of ‘not being bad’. We felt we should aim for better.’

Mike and Alex’s shared vision for a better future requires all companies to contribute to meaningful and effective social and environmental change – regardless of their circumstances.

‘If every business does what it can within the confines of its business model, ensuring it creates little or no harm and where possible positively contributes to the societies where they source, sell or operate, then the impact can be huge’, Mike explains. ‘But this does need to be a collective effort; it cannot be the few carrying the many.’

Democratising sustainability

To help companies achieve meaningful social and environmental change, The Sustainability Group launched FuturePlus, a SaaS platform, in November 2021.

The sustainability measurement, management and communications tool provides access to simple and affordable solutions, and allows any type of business – from one-person startups to multinational firms all over the world – to understand, measure, manage, plan and improve its social and environmental impact, and receive aggregate feedback on the collective impact that has been achieved.

‘At FuturePlus we aim to democratise sustainability by making it achievable for businesses of any size’, Mike explains. The goal is to help as many businesses as possible, regardless of sector, size or geography – and frankly, whether or not they view themselves as sustainable. All businesses have a role to play in the creation of a profitable, just and sustainable world, and we believe that helping many businesses to constantly get a bit better will drive real change.’

FuturePlus enables companies to map and monitor their sustainability with a data-driven quantitative sustainability score and an ambition score, making it easy to communicate progress to investors and stakeholders.

A company’s sustainability performance and ambitions are measured across timeframes and key themes including climate, environment, social, economic and diversity and inclusion.

These indicators are further broken down into sub-categories encompassing governance, leadership, workforce, supply chain, ecosystem and more.

This holistic approach allows companies to comprehensively assess sustainability factors across their entire operations, products and services.

Companies also receive an actionable plan and support to increase their positive impact over three years. ‘Put simply, we provide solutions for companies to measure, manage, improve, report and confidently communicate their current actions and, most importantly, their intent’, Alex says. ‘We make sure that progress is tracked and organisations are held accountable for the changes they promise to implement.’

Due to this comparable and ambition-based approach, businesses are able to gauge their sustainability progress accurately, which fosters a more comprehensive and transparent understanding of their impact and helps them communicate their intent.

‘It also allows The Sustainability Group to work with all sizes, sectors and geographies of business’, Mike tells us. ‘We have clients across the globe, from startups and SMEs to global enterprises in sectors including law, tech, manufacturing, sports, finance and more. In each case we are helping to map their current sustainability credentials and future ambitions.’

Sustainability at Soho House

One client that has benefited from The Sustainability Group is global members’ club Soho House – home to over 120,000 members, with houses in the UK, Europe, Asia and the Americas, and employing over 6,000 people across 75 sites.

As a global company with a diverse and inclusive workforce and membership, Soho House has always focused on the positive impact it has in the communities in which it operates – yet tracking, managing and ensuring consistency in its sustainability practices across its varied sites – from farmhouses to beach houses and cities – has historically been a challenge.

‘As a member-based organisation, there is also an increasing expectation from members and stakeholders for Soho House to demonstrate and communicate its understanding of the social and environmental footprint it has and the actions it has put in place to ensure it has a positive impact’, Alex said. ‘Despite its commitment to sustainability practices – from carbon emissions to diversity and inclusion – the much-loved members club recognised that it needed to streamline its
approach to have a global reach.’

Soho House worked with The Sustainability Group to develop ESG frameworks for both its New York Stock Exchange listing and House Foundations, a programme of social responsibility initiatives that represent the very foundations of Soho House, bringing together diversity and inclusion, mentorship, apprenticeships and social and environmental causes.

To monitor and communicate its progress and stay true to its progressive culture, Soho House dedicated time to finding an environment, social and governance (ESG) management tool that could report to markets, members and stakeholders clearly and consistently.

After extensive research, Soho House decided to use FuturePlus to improve its sustainability in the way its members value and its investors require.

‘The Sustainability Group supported Soho House through retained consultancy and a FuturePlus membership to consolidate its sustainability practices and build an extensive ESG programme before and after the organisation’s IPO in 2021’, Mike says.

Purpose-led businesses

‘Purpose’ has become a bit of a buzz word in business, thanks to a combination of societal pressures, evolving stakeholder expectations and a recognition of the long-term benefits of responsible and sustainable business strategies.

A greater awareness of the urgency of these challenges, such as climate change and social inequality, has forced businesses to adopt purpose-driven strategies to maintain their social licence and stakeholder trust.

Changing consumer values and preferences have also had an effect, as today’s customers seek products and brands that align with their ethical and sustainability concerns.

The modern workforce, particularly those in the early stages of their career, value purpose; this has prompted businesses to reflect their employees’ values to attract and retain top talent.

‘We are also seeing investors recognise the value of continued ESG performance, which further incentivises companies to prioritise purpose-driven practices’, Alex adds.

For Mike and Alex, a clearly defined and well-communicated purpose can act as a north star for an organisation, helping to shape its values, goals and long-term vision.

‘Aligning that purpose with impact is critical, and assessing and keeping a close watch on your organisation’s impact can undoubtedly enhance your resilience’, says Mike. ‘The FuturePlus Impact measurement methodology is underpinned by a risk framework that promotes a forward looking and long-term perspective regarding both the positive and negative impact your organisation imparts on the community it operates in. This proactive approach not only helps safeguard against potential risks but also encourages transparency, action, innovation and planning. This can all help organisations adapt and thrive in the face of challenges – be they environmental, social or commercial.’

There’s no bad time for businesses to embrace their purpose and grasp the consequences of their impact, but Mike and Alex’s advice is to do this as soon as possible.

‘The earlier a company sets out on this path, the easier and more cost-effective it becomes’, Alex reveals. ‘We urge businesses, right from start, to take these opportunities and consistently build sustainable practices into their operations. In doing so, they can ensure that their sustainable growth matures in tune with their financial growth, paving the way for a more responsible journey to success. We often identify quick wins for businesses; while short-term benefits are valuable, the true potential for change lies in embedding sustainability as a fundamental decision-making pillar for the long term.’

This is one of the reasons The Sustainability Group measures ambition and focuses on intent; it provides companies with a clear roadmap from the outset of their journey, which not only holds them accountable to making the stated improvements but also the confidence to communicate clearly, where they are now and where they want to be.

A competitive advantage

Sustainable investing continues to rise; while this is often driven by regulation and reporting standards, investors are in many cases also looking to understand a company’s impact at the very early stages, seeking companies that exhibit understanding and commitment to sustainability and can effectively communicate their impact.

‘While ESG investing has historically focused on carbon footprint, we are starting to see this expand in the ‘S’ and the ‘G’ with human rights, working conditions, inclusion and pay, as well as supply chain, circular economy principles and biodiversity all gaining importance as business and investors acknowledge their broader social and environmental influence’, Alex tells us.

‘We encourage investors to map and monitor the sustainability of their portfolio companies comprehensively, and to focus on intent, tracking progress, or lack thereof, over time’, Mike says. ‘Research shows that companies that consider sustainability, whether core to the product or service or not, tend to take a longer term view. This can help to ensure businesses are more resilient and save money in the long run – and also helps to improve a company’s reputation.’

Demand for meaningful change

For these reasons, Alex and Mike are tending to find that capital is conditional on meaningful change and that consumers are demanding it.

‘There can be a contradiction between consumer needs and wants’, Alex accepts, ‘as indeed there are conflicts about what ‘meaningful change’ means. However, Accenture reported that while up to 66% of consumers say their own needs drive their decision-making, some 72% of consumers feel they can impact the world and their communities through behaviours and buying choices.’

For businesses to react to this, they need to be confident in their understanding of their impact, the meaningful change that they can create and the ability to communicate the actions they have taken and the goals they have for the future.

‘While there continues to be a push and pull between finance and consumers, there are compelling business reasons to encompass a broader perspective on social and environmental concerns’, Mike reveals. ‘Using sustainability as a guiding principle through a company’s operations presents an opportunity to adopt a long-term strategic outlook.’

Businesses that prioritise sustainability tend to exhibit greater resilience; Mike and Alex have noticed that fostering a culture of employee wellbeing helps to retain staff, attract top talent, reduce costs, invest in the future, promote diverse voices in decision-making (which research indicates leads to more successful decision-making) and open up opportunities for securing finance.

‘There is also plenty of research suggesting that customers are increasingly opting for sustainable solutions when presented with the choice’, Alex says. ‘People are becoming more conscious of climate and social issues, and there’s a noticeable trend in consumers drawing connections and expecting a higher level of responsible and ethical conduct.’

Uniting for a sustainable future

Sustainability continues to rank among the most pressing concerns for businesses today. The world is transforming rapidly, with heatwaves, human rights and environmental crises continuing to dominate the headlines.

Before co-founding The Sustainability Mike worked in more than 60 countries as executive director of Unicef UK, CEO of Action Contre La Faim in Paris and global humanitarian director of Save the Children.

‘The incentives that drive the allocation of aid have become self-serving and overly restrictive’, he tells us. ‘Pure humanitarian aid funding should go to the most vulnerable, in countries where economies and political systems do not function, it should be reserved for the hardest to reach and the most in need. If we gear the economic incentives so purpose and environmental and social impact are built in to every company and institution, then they can meet the needs of those lucky enough to live in places with a functioning civil society.’

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