Action Guide

Define Clear Accountability, Policies, and Incentives

Environmental Defense Fund

Businesses need to make sure they have established systems and processes in place to manage their sustainability efforts. This means having clear ownership, incentives, and policies to hold people accountable to your organization’s overarching sustainability goals.

Defining clear accountability, policies, and incentives can have multiple benefits. It ensures that everyone is aware of the company’s sustainability goals and their individual responsibilities towards meeting them. It also clarifies the importance of sustainability across teams, so that each group is aware of how they need to contribute to the company’s sustainability targets. Finally, by establishing clear accountability and policies, you can better reward parts of the organization that meet or exceed their sustainability targets. 

Create an Effective Organizational Structure 

Creating accountability requires an effective organizational structure that clarifies roles and ownership of sustainability tasks. This might require creating a central sustainability office and making its reporting structure clear both up to the C suite and across different business units. It could also mean organizing sustainability teams within each business unit and enabling them to effect change. Including the Board of Directors when considering your organizational structure from a sustainability perspective can be a helpful way to maintain focus on sustainability across the company. 

Walmart has tasked several board-level committees to provide oversight on sustainability across the company. Additionally, Walmart has created an ESG Steering Committee of leaders across the organization to maintain alignment on ESG strategies and help set priorities. 

The right organizational structure to support sustainability at your company will depend on your company’s existing organizational structure, your sustainability goals, and your company’s history. In general, a helpful structure both enables sustainability teams to effect change and empowers company leadership to champion sustainability across the organization. Critically, the organizational structure and roles should make clear who has responsibility for implementing change to meet your sustainability targets.   

Define Policies and Incentives to Support Sustainability 

Alongside creating the right organizational structure, your company must also define policies and incentives that will support your sustainability goals. Effective policies might include changes to procurement standards or internal reporting requirements to track progress against your sustainability goals. Policies should integrate with core business functions to support sustainability throughout the company.  

Incentives can encourage leadership, employees, and other members of your company’s value chain to maintain focus on your sustainability targets. These incentives could include bonuses or other rewards for meeting sustainability goals or recognition for business units, brands, and employees who contribute to sustainability initiatives.  

In 2010, Unilever launched its Sustainable Living Plan, which set out a series of ambitious targets related to sustainability. To ensure that the plan was implemented effectively, the company established a sustainability committee, appointed a chief sustainability officer, and implemented a range of policies and incentives to support sustainability initiatives. These included bonuses for senior executives based on sustainability performance and recognition for employees who contributed to sustainability initiatives. 

Sustainability can be embedded across the company. Some ways that sustainability can be built into different teams include: 

  • Supply Chain: Your supply chain and procurement teams can work with suppliers to adopt sustainable practices, such as reducing greenhouse gas emissions and waste. They can also work to ensure that suppliers are compliant with labor and human rights standards to address broader sustainability goals.  
  • R&D: R&D departments can develop products and services with sustainability in mind. They can design products that are energy-efficient, durable, and recyclable. They could even research new materials and technologies that have a lower environmental impact. 
  • Marketing: Marketing can play a key role in promoting sustainability initiatives and communicating the company’s sustainability message to customers. They can create sustainable marketing campaigns, promoting eco-friendly products, and share the company’s sustainability achievements in reports and advertisements. 
  • Operations: Operations teams can work to reduce the company’s environmental impact through sustainable practices, such as lowering energy and water usage.  
  • Human Capital: Human Capital can integrate sustainability into employee training and development. They can provide sustainability training to employees and implement sustainable practices such as telecommuting and flexible work arrangements. 
  • Finances: Finance departments can integrate sustainability into financial decision-making. This includes assessing the financial risks and opportunities associated with sustainability initiatives and investing in sustainable projects, as well as the risks of not acting. 
  • Information Technology: Information Technology (IT) can implement green IT practices to reduce energy consumption and minimize waste. This can include using energy-efficient hardware and sourcing technology from sustainable suppliers that have end-of-life programs to recycle products when the time comes. 
Patagonia has integrated sustainability into all aspects of its operations, from using sustainable materials to reducing waste and investing in renewable energy. The company also encourages its suppliers to adopt sustainable practices and works closely with them to reduce their environmental impact. Patagonia also uses its business as a platform for advocating for environmental protection and climate action. The company has launched campaigns to raise awareness about the impact of climate change and has partnered with organizations to protect natural resources and reduce greenhouse gas emissions.