Successful engagement with customers, employees and suppliers is one of the key areas we assessed in our 2017 report on the Sustainability Reporting Performance of Europe’s largest companies. Engagement schemes can bring about huge business benefits, including supply chain efficiency, improved customer loyalty and increased employee satisfaction.
Companies have a capacity to influence and inspire behaviour beyond their own operations. Best practice companies look to set ambitious engagement objectives that facilitate a wider change and greater emissions reductions.
In most cases, a consumer will only choose a more sustainable option after a quick cost-benefit analysis – if a sustainable product is significantly more expensive, it’s unlikely to be chosen. Companies that are leading on customer engagement not only produce and offer low carbon products, but offer incentives to influence customers to make more sustainable choices. An example is the Intercontinental Hotel Group, who implement a “greener stay” programme whereby a guest can receive additional loyalty points for choosing to opt out of daily housekeeping. This has both environmental and financial benefits.
The number of companies producing a carbon neutral product or service in the FTSE 100 has almost doubled from 8% in 2016 to 14% in 2017
Case study – The Royal Bank of Scotland
While a company can, to a degree, mandate sustainable behaviour by putting policies in place, if employees are actively engaging in sustainability initiatives offered to them, it’s likely increase their employee satisfaction. Indeed, 16 companies in the FTSE 100 are offering rewards or incentives to their employees for sustainable behaviour.
The Royal Bank of Scotland has introduced a sustainability engagement programme called JUMP. Employees log sustainable actions they have performed in the workplace on an app, where they are then awarded points and are then eligible to win vouchers. This kind of engagement programme makes behaviour change straightforward and accessible while helping to encourage employee satisfaction by contributing to a purpose beyond their job role.
Case study – Marks and Spencer
88 companies in the FTSE 100 report that they are engaging with their suppliers. While most companies do engage with their supply chain, and many set minimum sustainability criteria for them to achieve, there is still a gap in the number of companies taking significant action beyond this initial engagement.
Marks and Spencer are working with their food factories to improve social and environmental standards. In turn, they reward the best-performing factories by purchasing more from them, incentivising their supply chain to become more sustainable. This makes business sense for both Marks and Spencer as the buyer and for suppliers as they benefit from a more resilient supply chain and business models.
For an initiative to successfully influence any given stakeholder, there should be a clear benefit for both parties, and to the environment. It is important to have a clear (and ambitious) aim – what is it that you want to encourage your customers, employees and suppliers to do, and why?