Dan Anderson, a Senior Manager at The Gap Partnership, casts light on a significant trend gaining momentum in the business realm: the importance of integrating sustainability into business negotiations.
With the corporate sector facing an urgent call to action, showcasing real progress in sustainability initiatives has become crucial. This movement is not only a response to ethical considerations but also a strategic approach to sidestep potential business risks associated with inactivity.
Aligning with this is The Gap Partnership's (TGP) latest research, which draws on insights from over 800 senior executives spanning a range of industries and global regions. The findings are telling: 32% of participants view sustainability as a central element of their business negotiations, while an additional 36% acknowledge the importance of heightened collaborative efforts in sustainability with key partners. The key motivations driving this focus include meeting customer expectations, adhering to regulatory demands, and staying aligned with their organization’s goals and values.
This survey unveils varied perspectives on how different industries and regions prioritize and drive sustainability in business negotiations, offering a window into the evolving priorities of today's executives.
A pertinent question to explore is the key obstacles businesses face when striving to accelerate their sustainability progress. Our clients commonly report several recurring themes that hinder their sustainability efforts:
- Sustainability is often confined to discussions among experts, failing to be a priority for most teams in the business.
- The focus on sustainability is perceived as secondary to tangible, short-term value reflected in the profit and loss (P&L) statement, particularly given the current volatile market conditions and rising prices.
- There is a lack of alignment on the value of sustainability for the business.
- Sustainability is not treated as a negotiation topic, as the trading terms already outline the expected behaviour from partners.
- Negotiators lack the confidence or authority to address variables connected to environmental sustainability.
Patrick Shewell, the Global Head of Sustainability at Mondelēz International, underscores the necessity of integrating sustainability into negotiation agendas across all business functions. In discussions with TGP, Patrick highlighted the imperative for buyers to incorporate sustainability into their practices, thereby encouraging suppliers to enhance their efforts. He advocates for buyers to not only seek collaboration with suppliers but also to leverage internal sustainability teams for quality data and insights that can refine sourcing practices.
TGP provides a range of services designed to assist businesses in incorporating sustainability throughout various functions, thereby fostering more impactful negotiations on sustainability matters. These services include:
- Strategic Support: TGP aids in aligning stakeholders around suitable sustainability objectives at a functional level, emphasizing the real-world benefits of sustainability for businesses.
- Customized Learning Resources: TGP's workshops and webinars are tailored to strengthen the capability of negotiators to pose critical questions, prioritize sustainability in discussions, break down silo mentalities, and recognize sustainability as an avenue for generating value, rather than simply as a cost or baseline requirement.
For businesses looking to deepen their understanding of sustainability in negotiations, TGP extends an open invitation for further information. Additionally, for a broader conversation on the subject, TGP recommends listening to the complete interview with Patrick Shewell on The Negotiation Society Podcast.
