10-6-2016 Exit Sustainability Manager

Exit sustainability manager

Arthur ten Wolde, 10 June 2016

Two weeks ago it hit me: this could be a trend. Excellent sustainability managers across the EU are being let go during reorganisations, sometimes along with their entire group. Now I am well aware that a few isolated instances are by no means sufficient to establish a trend. Although I do think it would be worthwhile to investigate if it is, and several of my contacts confirm the observation. But regardless, I would like to share my thoughts with you on why I think this should not be happening at all in the first place.

So how come sustainability managers are being let go during reorganisations? Actually, from the point of view of the dynamics of most reorganisations, it is quite logical and understandable. Sometimes, a reorganisation really is what the name suggests: a combination of two or more organisational units resulting in a new entity in which the combined units remain essentially intact. But mostly, it’s about restructuring of a firm’s operations, in order to concentrate on core activities and outsource peripheral ones, often requiring reduction in workforce. It’s about efficiency. The company “is doing the right things” but at too high a cost. Which can come to light, for example, during a company merger, after an industry benchmarking or even in a company split-up. Now any company that does not keep its costs under control inevitably heads off for bankruptcy. So what costs are you going to cut? Due to the high tax on labour, it always comes down to cutting staff. The entire staff risks losing their job – including the CEO. If what you do falls under the activities adding value to the company, it is only fair that your work should be taken along in the total analysis of restructuring. Those adding insufficient value should leave.

Now why do I have a problem with the letting go of sustainability managers? Well, to begin with, I am talking about companies with a sustainability profile. Companies that have formulated a CSR strategy, incorporated sustainability into their core strategy, recognise the importance of circular economy, and are taking concrete steps to reduce the CO2 footprint and close value chains. They communicate frequently about it, and it’s no greenwashing.

With that in mind, it seems rather contradictory to me to fire your sustainability manager. Of course, they may not function well, which would be the perfectly legitimate reason for it. But as far as I know, that was not the case in the instances I am aware of: They were all functioning well and working on highly relevant projects.

What they have in common is that they were actually doing something. Like formulating a new sustainability strategy now accepted by the board, realising company savings worth several times their annual salary by successful sustainability projects, or managing technical innovations capable of considerable footprint reduction. To achieve do this, they had a strong network with the business and stakeholder community around it, which allowed them to deliver concrete results.

But this seems to have had a serious downside. “Corporate” saw they were spending lots of time in the business units, although they were on the payroll for corporate – which is how the business units saw them. They did not belong the core of either department and during the course of the reorganisation, neither wanted to pay for them. Despite their being creative and successful.

What can we conclude from this? A possible lesson for sustainability managers could be: make sure you are either a clearly visible part of your own team, or an indispensible part of the business you work for. But most of all I would like to suggest to company managers and reorganisation consultants: think twice before letting go of those sustainability managers that could very well hold the key to the future of your entire company.

And avert an actual trend…