Taking a Holistic Approach to ESG Efforts
When it comes to moving the needle on ESG goals and outcomes, Cara Smyth thinks about chess.
The global senior managing director of ESG and responsible retail at Accenture, and fellow and founder of Fordham University’s Responsible Business Coalition said “everybody knows what the [ESG] goals are, where we are marching — but it’s still too difficult to march.”
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Why? Smyth said while the fashion apparel and retail industry has the best intentions at heart, too many companies are compartmentalized and don’t collaborate enough. She said there needs to be a more holistic and systems-thinking approach. Think of it as a chess board, Smyth said, with each piece having a definitive role in the quest of implementing effective ESG practices.
For its part, Accenture’s recent ESG report serves as a playbook for brands and retailers to be successful. It includes 12 interconnected systems and issues the industry is trying to solve, “which is just one big system in itself,” Smyth said, noting that each chess piece (IT, finance, marketing, warehouse management, HR, operations, etc.) must work together and with transparency while also collaborating with vendors.
“And there’s a change management part,” Smyth said. “This is where you have to ask, ‘How am I going to get the waste out? How am I going to think about dynamic planning? Am I going to offshore, nearshore, onshore or produce less?’”
“You have to look at the systems that are inside a company and look at companies and suppliers in each of the systems that are caught in the entire chain,” Smyth said. “I think a lot of what is so electrifying and exciting about sustainability now is everybody starting to see the connections — including ones between industries. Maybe someone is thinking of leather and somebody else is thinking of beef supply. Well, they should get together and talk. Or someone is making jewelry and someone else has recycled steel — then they should get together.”
But there’s another dimension to systems thinking: the individual.
Smyth said the individual mindset plays a key role across an entire organization. “Everybody should be invited to think differently,” she said. “And I think we’re being forced to do that anyway because of the stakeholder pressures. But the first critical step is in the operating model.”
When Smyth first started working in the sustainability space, everything was siloed. “They kept the sustainability team separate from the business,” she said, adding that now brands and retailers need to align everyone across the value chain while seeing their own part to play.
At this stage in the ESG journey, Smyth said retailers and brands need to unleash innovation and creativity — internally and externally with vendor partners. “You have to find ways to release a lot of trapped value in the chain,” she said. Again, it goes back to asking questions. With vendors, Smyth said to question them about their processes. “Ask them, ‘Why is it coming in on a hangar and in a poly bag?’” Smyth said. “If you are a brand and I’m a retailer, and we were the same company, how would we think differently? And because of the sustainability goals and science-based targets and regulations that are coming on stream, you can’t just talk about your goals. You now have to talk about your remediation plans.”
Smyth said once the switch is flipped with regulations and remediation plans, “now you’ve got to actually fix it. And that means you’re going to have to collaborate in a different way. So, this brand and supplier engagement strategy is fantastic. It’s the way of the future. It’s creating a new dialogue while moving the system in a different direction.”
ESG practices also need to be driven by purpose. “And pleasure,” Smyth said. “We need to bring sexy back to sustainability — a little bit — because it’s gotten a little heavy and difficult. But if you think like, ‘Wow, I can actually do this better and do it differently’ — honestly, it’s a thrill.
“We’re at a point where all of the pressures are coming together in the right way to move things in a new direction,” Smyth said. “So, I am super hopeful.”
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