Unlocking competitive advantages: Integrating supply chain sustainability and workforce strategies

“The future of the company depends on the health of the workforce.” – Jill Kolling

In today’s rapidly-shifting corporate landscape, the integration of sustainability practices and workforce strategies is crucial for success. Companies of all sizes are looking for ways to reduce their carbon footprint and create positive environmental change. But what many don’t realize is that sustainability isn’t just about the environment – it’s also about the people.

Today, we’ll be learning from Jill Kolling, Vice President, ESG & Chief Sustainability Officer, at James Hardie, a publicly traded building products company. With 15 years of experience in this area, Kolling shares the advice she would give to other companies looking to integrate sustainability into their operations and explores the best practices, integration strategies, and benefits that lead to a competitive advantage.

What does sustainability mean in the supply chain sector?

Sustainability has become a buzzword in recent years, but what does it really mean? At its core, sustainability refers to the responsible management of resources to meet the needs of the present without compromising the ability of future generations to meet their own needs.

As Kolling states, “You want to align your strategy in this space to your business strategy, and you need to look at, as a company, how do we impact the planet in environmental ways? How do we impact communities? Our own employees, other people, humans in our supply chain, our value chain?”

Sustainability encompasses three key dimensions:

Environmental sustainability

This aspect focuses on minimizing the impact of business activities on the environment. It involves reducing greenhouse gas emissions, conserving natural resources, and adopting eco-friendly practices. For instance, companies may implement energy-efficient processes or invest in renewable energy sources to reduce their carbon footprint.

Social sustainability

Social sustainability emphasizes the well-being of people within and outside the organization. It includes promoting diversity and inclusion, ensuring fair labor practices, and engaging with local communities. Companies can achieve social sustainability by creating safe and inclusive workplaces and supporting community initiatives.

Economic sustainability

Economic sustainability entails maintaining profitability and financial stability while pursuing sustainable practices.  It involves responsible financial management and ethical business conduct. This means making long-term investments that benefit both the company and society. For the ESG team at James Hardie, Kolling cites the four pillars of their sustainability program: innovation, communities, zero harm, and the planet.

When Kolling looks at innovation, she looks at ways her team can use emerging technologies to produce more resilient, sustainable products for homeowners that can stand the test of time. The communities they serve are expansive, ranging from the internal employee community, the communities where they live and work, through society as a whole‌.  Zero harm refers to practices that promote physical and psychological safety for every employee and contractor. This promotes employees coming to work every day feeling secure in their role, the work they do, and the value they provide to the world.

Lastly, making business decisions with the planet in mind results in more processes that reduce greenhouse gas emissions and waste. In short, sustainability involves maintaining profitability while pursuing practices that are healthy for both the environment and the workforce, aligning financial goals with ethical business conduct.

Best practices in integrating sustainability and workforce strategies

Workforce strategies are deeply intertwined with sustainability practices, and companies should consider how they can function together to drive business outcomes. For example, integrating sustainability into your operations can reduce waste, save costs, and improve efficiency. Empowering employees to take ownership of their roles in promoting sustainability best practices can amplify the impact.

Kolling makes a great point on getting employees involved, and the power of taking ownership, “I think at the end of the day, it starts with culture. To really have a zero harm policy and a culture that supports that, people need to feel okay pointing out an unsafe situation they see. They need to feel like they aren’t going to be in trouble for doing something, but in fact, recognized for speaking up.”

At James Hardie, Kolling praises a culture where “you are your brother’s and sisters’ keeper. You look out for new employees. You look out for contractors. We really have that culture that we’re all in this together.” This notion really drives home the notion that at James Hardie, employees are humans, first and foremost, with families to go home to, individual goals, and their own motivations but they all work under a unified mission which starts at day one.

Kolling recalls an especially clever campaign from a past organization that drives home this sentiment, “they had posters all over in their frontline workplaces with different employees on them and they said ‘Head of Sustainability’ with their name. The notion was that we’re all working on this.”

Integrating sustainability into company culture often starts with a bottoms-up approach. Kolling suggests asking employees in what ways can we (collectively) improve sustainability for the company and community? She says, following up on those answers and rewarding those who spoke up is a great way to get the ball rolling.

One especially memorable initiative from Kolling’s past experiences came directly from a frontline employee who pointed out that the company’s warehouses and plants were set along the monarch butterfly migration path. They suggested planting milkweed and other native flowers outside warehouses along the way. “You can get great ideas from frontline workers,” she explained.

With that in mind, let’s explore some best practices for leveraging your workforce to drive sustainability initiatives forward:

Align sustainability with business goals

It’s essential to align your sustainability initiatives with your overall business strategy. Ensure that your sustainability goals complement your company’s mission and values. This alignment makes it easier for employees to understand the purpose behind sustainability efforts.

Foster a culture of sustainability

Employees should view sustainability as an integral part of their work, not a separate initiative. Encourage employees to suggest ideas and solutions for sustainable practices, fostering a sense of ownership and engagement.

Prioritize employee development

When employees receive training and opportunities for growth, they become more valuable assets to the company. In turn, engaged and empowered employees are more likely to support sustainability initiatives.

Embrace diversity and inclusion

Promote diversity in your workforce and provide equal opportunities for all employees. A diverse workforce can bring fresh perspectives and ideas, contributing to innovation and better decision-making.

Communicate transparently

Keep employees informed about sustainability goals, progress, and achievements. Encourage open dialogue and listen to employee feedback. Transparent communication builds trust and reinforces the connection between employees and sustainability initiatives.

It is important for businesses to regularly communicate with staff members about the progress made towards achieving their goals. “You’ve got to tie the sustainability strategy to your purpose, to your values, and you have to have good communication,” Kolling reiterates, “employees have to understand what it is, how they fit into it, and they have to have a voice. That’s how you get action.”

Benefits of integrating sustainability and workforce strategies

Sustainability has become increasingly important in the modern world. Integrating sustainability into a business’s workforce strategies can yield tangible results for companies of any size. While yes, these strategies benefit employee communities, company culture, and society as a whole — they are also incredibly important to investors who try to use them as a way to compare companies through a common set of metrics.

“The powers that be in this space are trying to align to one framework,” Kolling states, going on to say, “Human capital is a huge focus of investors these days in the ESG space, and that is your workforce. From an investor perspective, they want to make sure you’re operating a safe and responsible company with engaged employees.”

Here are six key benefits of sustainability initiatives:

Employee engagement and talent attraction

When employees believe that their company is making a positive impact on the world, they often feel a stronger sense of purpose in their work. Sustainable companies also tend to attract top talent, as many job seekers prioritize working for organizations that share their values and ethical standards.

Cost savings across the supply chain

Sustainable practices often lead to long-term cost savings due to reductions in energy consumption, waste production, and other operational costs associated with running a business.

Improved health & safety conditions for frontline workers

By reducing hazardous materials used during manufacturing processes or by introducing healthier food options at the workplace cafeteria, companies can improve workplace safety standards and reduce health risks associated with exposure to toxins or unhealthy food items.

Risk mitigation and long-term resilience

By proactively addressing environmental and social concerns, businesses reduce the likelihood of encountering regulatory fines, legal liabilities, and can make themselves more resilient to supply chain disruptions and changing market dynamics.

Access to capital and investment

Investors and financial institutions increasingly consider ESG (Environmental, Social, and Governance) factors when making investment decisions. Companies with strong sustainability records are more likely to attract investment capital.

Positive impact on society

Companies that focus on social responsibility, community engagement, and environmental stewardship play a vital role in addressing global challenges such as climate change, poverty, and inequality.

Conclusion

Sustainability and workforce strategies are deeply intertwined, offering numerous benefits for businesses willing to embrace them. By aligning sustainability with your company’s mission, fostering a culture of sustainability, and prioritizing employee engagement, you can unlock a competitive advantage that not only benefits your bottom line but maximizes your organization’s positive impact on society. Ultimately, sustainability becoming a part of your company’s DNA is vital to its long-term success.