When Henry Davis York was approached by one of its major clients several years ago with probing questions about their sustainability policies, initially we initially found it to be confronting. But our managers elected to whole-heartedly embrace the challenge, because they believed that it was the right thing to do.
What is a sustainability program?
Put briefly, sustainability is a broad concept that relates to an enterprise's people, its community, marketplace and environment. It involves the organisation accepting responsibility for its actions in all aspects of its conduct so as to minimise risk and enhance reputation. Sustainability embraces corporate social responsibility, but extends much further into every branch and secluded corner of the operations.
As was the case with HDY, it is typical that a client or customer prompts others in their supply chain or client network to embark on such a program. Indeed, it is essential that external groups that form part of the organisation's broader business web be drawn into the program. It can't be done effectively any other way. Consider, how could a sustainability program be successful if the organisation ignored the sustainable practices of its supply chain?
HDY's chief operating officer, Kelvin O'Connor, doesn't believe however that success comes from wielding a stick. It is more effective to offer carrots. "We try to help our stakeholders understand what is involved and realise the benefits, just as we were helped initially by the client who came to us. It's about clients seeing that we want to partner with people who share our ideals. We then help people learn from things that helped us."
Sustainability programs can be confronting. It is often necessary to stand in each other's shoes - to view operations from different perspectives so that the risks and opportunities involved can be fully understood.
HDY already had some aspects of a sustainability program in place among its staff and into the community via pro bono work when it decided to fully embrace the concept. But being a law firm, it was not as inherently transparent as many other organisations. It produced community reports for external consumption, but it was not required to report regularly to shareholders or to publish financial reports. Management therefore viewed the decision to embark on a sustainability program as a chance to shed light on the business.
The first step for HDY was to undertake a benchmarking exercise using the globally recognised and rigorous Corporate Responsibility Index (CRI). That first round of the CRI resulted in HDY being given a score of 62%, and importantly it highlighted the broader internal issues that needed to be improved in a broader program. The firm has recently completed its third CRI report and finds that it complements the work that it now undertaking on its systematic sustainability program.
The sustainability program kicked off in 2008, and involved identifying 14 commitments related to its staff, community, environment and marketplace that needed to be initiated. Some initiatives were quite basic, as can be expected when such a far-reaching program begins. For instance, HDY developed a framework for engaging stakeholders in a regular and structured fashion. It also established appropriate targets, undertook an employee survey and improved employee communications. It adopted goals to boost the proportion of renewable energy that it consumed by 35% and to cut paper use by 7%. Pro bono contributions from each of its 200 lawyers were increased. At the end of the first year a scorecard showed it had met half its initial commitments, six were classified as being work in progress and one - a reduction in paper consumption - was not met when measured against the strict benchmarks chosen.
The second year involved setting a new list of commitments, this time reduced to nine - the first of which involved maintaining focus. Interestingly, two commitments were included that reflected the tough economic times that had hit HDY's clients as a result of the Global Financial Crisis. The first of these was to remain sensitive to market expectations, especially with regards to service fees and pricing decisions. The other was to maintain strong client relations and support those impacted by the financial downturn.
Among the goals achieved in 2009 were a 29% boost in recycling and a fall in waste sent to landfills. Pro bono work was boosted and employees increased their contributions to charities. All major supplier contracts were screened for sustainability initiatives or credentials and a flexible work place project was undertaken to review practices and procedures. Its second CRI score increased significantly to 78%, and HDY became the first Australian law firm to publish a sustainability report that met the AA1000AS assurance standards.
The 2010 commitments again number 14. The list includes asking suppliers how they perceive HDY as a client, the intention being to use the feedback to address issues and identify any systemic problems. A survey is also being undertaken among suppliers to assess their sustainable practices and use of eco-friendly products and services.
A mature stage program
HDY has learned many lessons along the way, including that some goals can be reasonably straight forward. But others, such as extending the program to include external stakeholders, take longer and require careful planning. One of its main focuses now is to keep the sustainability impetus going. It many ways, that means working harder to embed the culture into the workforce and setting tougher benchmarks. "We have learned how to talk the talk," O'Connor says, "but walking the talk is harder. The challenge has become to integrate sustainability into everything that we do. When we reach the stage that this program happens as if by osmosis, we will have achieved our success." The first steps principally focussed on staff. HDY wanted to attain a reputation as being an employer of choice so that it could better attract leading legal minds and also retain staff. To some extent that is an ongoing process even though there has been success. For instance, a recent staff engagement survey will be reviewed in the coming months and on an ongoing basis. . Community outreach, in the form of a boost to pro bono activity, also was a feature of the early days. While significant gains have been made, a full-time pro bono co-ordinator has been appointed to boost and more evenly spread the hours contributed.
The focus now is more directed towards taking the program to HDY's suppliers. They will want to know what these organisations are doing with regards to the responsible management of their businesses, and asking what assistance they can give to ensure appropriate collaboration is in place which enables HDY and its suppliers to operate with synergy.
Perhaps the largest benefit gained is one that is intangible, and that is the boost that it has given to HDY's reputation. Those businesses that put sustainability high on their own agenda are encouraged to know that HDY shares the same values. Internally, it is also helping the firm to focus more intently on its own corporate governance, particularly with regards to how it assesses risk. It has also improved board reporting mechanisms. For management, sustainability has become a critical component of strategy development and planning.
The most tangible outcome has been the improvement in each of the three CRI scorecards that HDY has completed to date. This year it achieved a score of 86%. Noting this success, other law firms are looking to start sustainability programs of their own. HDY has become a founding member of the Australian Legal Sector Alliance, whose goal is to work collaboratively to promote sustainable practices across the legal sector. Kelvin O'Connor has a note of caution about the benefits. "This is not a marketing tool. It's a story. It is a factual and transparent story about the things that work well and the things that don't work well. It sets targets and it identifies areas of improvement. It is not a glossy brochure. You need to show how you are going - warts and all."