Sustainable corporate culture: how to use it to your advantage...

... and which mistakes should be avoided

A sustainable corporate culture is the foundation and characterising factor for day-to-day collaboration and a sense of well-being within the company. It is therefore an important prerequisite for teams and companies to achieve their set goals. This is especially true for major changes such as sustainable transformation. The culture ensures that employees have a sense of direction and security in their day-to-day work, in times of change and also in times of crisis. They can contribute, get involved and feel comfortable. This increases satisfaction and motivation.

With a suitable sustainable corporate culture, companies are better able to achieve their goals, deal with setbacks more confidently, have more satisfied employees, are more attractive employers, can attract more applicants and are more innovative. In short: they achieve sustainable success.

In this article, we look at the corporate culture of sustainability. We explain what it means, what the typical components are and what advantages a company can gain from taking a close look at its own corporate culture of sustainability. Content on this page:

Content of the article

• Introduction: What is sustainable corporate culture? What is a corporate culture of sustainability?
• Typical components: Which elements are part of a corporate culture of sustainability?
• How it works: How does a sustainable corporate culture work?
• Added value: the benefits of a suitable corporate culture of sustainability
• Advantages of a sustainable corporate culture
• Conclusion and final thoughts

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Introduction: What is sustainable corporate culture? What is a corporate culture of sustainability? 

Corporate culture describes the set of common, self-evident assumptions, behaviours, norms, values and attitudes that prevail in a company or organisation. It is the mode of social interaction. Sometimes it is also referred to as the DNA of the company.

Sustainability describes the principle of acting and managing in such a way that no more resources are consumed than can be regenerated. This goes hand in hand with sustainable development, which is the aim of this principle.

In our understanding, a sustainable corporate culture therefore means that the corporate culture serves sustainability. Attitudes, values, assumptions, cooperation, etc. should be organised in such a way that they enable and promote sustainable action. In turn, it should make non-sustainable behaviour more difficult or ultimately prevent it.

Sustainable corporate culture and the corporate culture of sustainability are used synonymously in the following.

Relationship between sustainable corporate culture, corporate structure and the people in the company

All levels influence and shape each other. The dividing line is not always clear and unambiguous. The important realisation here is that the levels can be found in one-person businesses, SMEs, public institutions and large corporations.

These levels are also typically addressed in change management practice and specialist literature. The central message is: If you want to understand a company, you have to look at these three levels. If you want to change a company, e.g. make it more sustainable, you have to consider all three levels.

The individual level can be summarised as follows: The person belonging to the company can be asked directly, e.g. about wishes, attitudes, etc. The personnel file or CV provides information about the level of education and other aspects.
The company structure can be recognised even more easily if organisational charts, process landscapes, manuals with rules and guidelines, etc. are visible.

Corporate culture is more complicated. On the one hand, there are "visible" elements, on the surface so to speak. On the other hand, there are so-called "invisible" elements in the depths of the company, below the surface. These include collective feelings, perceptions, experiences, beliefs and values. The latter can be formalised and published (e.g. in the mission statement "Our values"). Shared experiences can also be legible, e.g. with commemorative plaques or in a chronicle. However, whether values are really lived or people act influenced by collective experiences is not apparent at first. These characteristics lie beneath the visible surface.

Typical components: Which elements are part of a corporate culture of sustainability?

We have collected examples of a corporate culture of sustainability. At the same time, we show examples of concrete measures that speak in favour of a sustainable corporate culture: 

Visible elements

• Vision of a sustainable future, e.g. set out in a vision for the future
• CSR or sustainability strategy
  (some good Practical examples for sustainability strategies we here before)
• CSR officers or sustainability committees that can be consulted on sustainability issues
• ESG target agreements, i.e. target formulations for environmental (environment), social (society) and governance (corporate management)
• Cooperation agreements, e.g. with environmental or occupational safety NGOs
• Formats for sustainable corporate development, e.g. dates for exchanging experiences on best practice approaches or CSR role models
• Complaints, suggestion schemes or feedback processes on sustainable products, processes, etc.
• Guidelines, e.g. for sustainable purchasing
• Guidelines for business practices and processes, e.g. business trips or gifts
• Codes (Code of Conduct) for responsible supply chain management
• Manners and rituals, e.g. meetings with healthy, regional snacks or environmentally friendly company outings
• Appearance of the workplace, e.g. attractive workplace, ergonomic aspects, fair coffee, organic food, Green IT, company bike or e-car fleet, and much more.
• Facility management, e.g. solar cells, planting on the roof, cradle-to-cradle office furniture, planting on the property for high biodiversity and cooling, waste management and much more.
• Clothing habits, e.g. acceptance of second-hand goods or sustainable fashion labels
• Marketing and public relations, e.g. focus on sustainable ambitions or offers
• External presentation as a socially responsible company, development of an eco-image, use of Green Marketing

Invisible elements

• Practised values, prevailing norms, e.g. sustainability is generally understood as a core value; other typical accompanying values are fairness, transparency, trust, common good
• Wishes, needs and fears, e.g. fear of climate collapse, need for job security or a sense of purpose in daily life, desire to help shape the future (participation) or access to information (transparency)
• Management styles, e.g. authoritarian with strict environmental targets or participative, whereby employees and stakeholders develop their own targets and measures for social responsibility (there are dozens of different management styles between the two)
• "unwritten" laws of the company, e.g. mindful breaks, emotional check-ins for appointments or environmental "no-gos", such as the use of disposable crockery
• Interpersonal relationships, e.g. between colleagues, informal contacts, as well as loose (non-official) contacts with external parties, e.g. NGOs for social responsibility, environmental protection organisations, trade unions, political parties, climate researchers 
• Collective experiences, e.g. that sustainability offers a lot of room for creativity and development, that more sustainable management is meaningful and makes friends; that you can also celebrate quick successes (harvesting the sustainable "low hanging fruits") or how to deal with setbacks in sustainability projects  
• Unofficial status or hierarchy of power, e.g. expert on specialised issues or opinion leader
• Dealing with uncertainties and possibilities for queries, e.g. in questions about conflicting goals (dilemma) between social, financial, corporate and ecological responsibility
• Processes put into practice, i.e. the difference between acting according to regulations or acting in the interests of the cause, e.g. were the effects on the environment and society really considered or was the point ticked off without deeper reflection?

Many of the points mentioned become visible elements when they are formalised. Here is an example: If contact between colleagues or an NGO, for example, is official and planned, this is recorded in the company organisation chart or a cooperation agreement. If the contacts are more accidental (e.g. during a joint coffee break or company sport) or arise out of personal interest (e.g. through commitment to corporate transparency), they are categorised as invisible elements.

Corporate culture ensures that sustainability is actually practised or only intended

There can be extreme situations where a company has hardly any visible elements such as a sustainability vision or CSR measures, but still acts very sustainably. The reason for this is that sustainability is deeply and broadly anchored in the culture of the company. It is therefore part of everyday life to pay attention to social issues, for example. Environmental aspects are intuitively taken into account when making strategic decisions. This tends to be the case in micro-enterprises and SMEs. 
Conversely, despite numerous visible components, such as a sustainability report or a code of conduct, good sustainability performance cannot be achieved. This suggests that there is no distinct corporate culture of sustainability. The structures are in place and there are professionally trained CSR specialists, but processes and structures are only carried out according to regulations, while there is no acceptance of the sustainability ambitions of those responsible for CSR. This tends to be an observation for large companies or groups.

How it works: How does a sustainable corporate culture work?

On the one hand, the corporate culture is a lubricant between the structure and people from the individual level so that they can function together. What's more, it forms the foundation for action. Values, standards and orientation are anchored in the sustainable corporate culture. The other levels are based on this. It has a major influence on formulated structures (strategy, processes, rules, etc.) and the members of the organisation (their thinking, expectations, values, etc.). Please refer again to the figure above.

A weak corporate culture can lead to people working without a common goal and understanding. Structures, processes and tools may be in place, but without the corresponding values, they will not have any particular effect (they are used because they have to be used - but they are not used to generate real added value). The result can be that people start working against each other instead of with each other. The result is working to rule without seeing the bigger picture. The impact of the company does not exceed the sum of the individual elements.  

In uncertain times, a distinctive, practised corporate culture provides stability and orientation. The economy and the companies operating in it are becoming increasingly complex, with a greater division of labour and greater differentiation. Complexity is also intensified by the growing importance of sustainability. This gives rise to numerous new challenges for companies. This includes environmental protection issues, changes in management due to transparency and diversity, new supervisory duties in the supply chain and employee requirements, to name just a few aspects.

Corporate culture brings security in uncertain times

A suitable corporate culture of sustainability helps to provide orientation, security and time and space for solutions. The code of conduct for the supply chain, for example, can be studied as a visible element. An invisible element is dealing with uncertainties when making decisions. Values such as trust ensure that critical questions can be asked and that there is no social ostracism or other sanctions (e.g. being told off by the bosses). An established procedure (process) in the company can be to collect sustainability aspects during the decision-making process, to express justified concerns and to develop a basis for decision-making based on this. It is also conceivable to consult internal CSR officers or to approach external experts from NGOs or authorities with the question. An assessment tool (sustainability scoring) can also be used.

Having practised routines, management and members of the organisation have learned to deal with ambiguous situations. The established corporate culture of sustainability supports people with their sustainability ambitions and provides the basis for utilising structures and processes in the interests of sustainability. With the opportunities for questioning, time and space for additional research, decision-making powers and evaluation of options, constructive solutions are ultimately developed in the interests of sustainability. 

In order for the company as a whole to function well and for all levels to work together, it is worth taking a targeted look at the sustainable corporate culture. Culture, structure and the individual level must be harmonised.

An example of how corporate culture works

A person can be passionate about a topic and wants to act on it and inspire others. It is easy for them to muster motivation and show commitment, e.g. the person is a big fan of the colour purple. The person now joins the "orange" company. However, if there is no format or suggestion system for new ideas (structure), the environment blocks the new colour theme (individual level) or the person is socially ostracised for it (culture), the person will not live out or promote their favourite theme in this group. The person adapts to the prevailing norm ("orange is actually okay as a colour too") and bows to group pressure. Ultimately, the person may leave the organisation because the prevailing norm and attitude is "Orange is our colour, we love orange and it will always stay that way!".

The rule behind this is that the environment (the culture) shapes the person.

Collective peer pressure has enormous power over the individual. The prevailing culture shapes people's thoughts ("Orange is okay too") and actions ("Adapt").

The striking example with the colours can easily be transferred to much more controversial topics such as digitalisation, environmental protection, diversity, gender issues and so on. These are not "just" issues of the heart, but quickly become fundamental values and questions of personal identity.

A non-sustainable corporate culture causes sustainability ambitions and instruments to fail

The example shows that a single person with sustainability ambitions can do little if the environment, the unsustainable corporate culture, cannot be changed. Without a cultural change towards sustainability, the person will give up, end up in passivity or ultimately resign in frustration. The management is then left wondering why you are not a sustainable company, even though you have hired a person specifically for this purpose. The blame may then be placed on the person who has been declared incompetent. As a result of this experience, people conclude that sustainability is money thrown away. In the worst-case scenario, the issue is then scuppered.

The same can happen with a structural element. A sustainability tool or management system that has been introduced, for example, which provides key figures on environmental performance, has no effect. If the non-sustainable corporate culture behind it does not change, the new tool or system will only be perceived as additional work without any meaningful added value. Checklists are filled out, figures are recorded because it has to be done. However, no action is taken as a result of the knowledge gained. The effect on sustainability performance will remain low and there will be no real change towards a sustainable company.

Added value: the benefits of a suitable corporate culture of sustainability

The positive outcome of the example: the new person in the company is enthusiastic about a topic. The corporate culture is characterised by openness and appreciation, so that other opinions are heard. Bosses and colleagues show interest in other points of view and encourage new approaches and offer help, e.g. in the form of tools. The positive feedback motivates people to bring their passion to company issues. Commitment and motivation increase. With more perspectives and openness, processes, products and customers can appear in a different light. People react and innovate better. The objective is easier to achieve. 

Corporate culture can hinder or promote engagement

Particularly when it comes to transferring sustainability, individual commitment is needed in conjunction with suitable structures. A high level of motivation ("I can change things for the better here") and the opportunity to use their own creative scope ("I can achieve goals for sustainability, I can work holistically and meaningfully") are a strong foundation for organisational members to dedicate themselves to unknown, new subject areas. 

In addition, a corporate culture of sustainability can also prevent behaviour that runs counter to sustainability goals. Phenomena such as corruption, environmental violations, resource inefficiencies or poor treatment of employees can be prevented more easily. This in turn avoids legal disputes, fines, additional costs due to waste or damage to the company's image.

We can state the following: If sustainability has no place in the corporate culture, the sustainability efforts of individuals (individual level) or CSR measures (structure) remain cosmetic at best or fall into the charity sector. If, on the other hand, the management, employees and change agents (e.g. the CSR officer) work together to think about the corporate culture of sustainability, success will be achieved. This is precisely where the great incentive for companies lies. 

As shown, the corporate culture is formative. If a company seriously wants to implement sustainability in its processes, promote sustainable management among its employees and anchor it in management structures in a way that will bring success, then it is essential to develop a corporate culture of sustainability. The resources used together will achieve a greater effect than the sum of the individual parts.

Advantages of a sustainable corporate culture

We have already highlighted various advantages of a sustainable corporate culture. We summarise them again here:

• Motivation and team spirit (sense of community): Working together towards a higher goal, e.g. transforming the company into a sustainable business. Future-orientated and meaningful work often brings with it a high level of motivation and commitment for those involved.
• Coordination and orientation for everyone involved: especially in unclear situations, shared values and goals simplify decision-making. It is easier to deal with uncertainties.
• Rapid implementation: Since a common language has been found and the information structures are optimised accordingly, decisions are easier to make.
• Identification with the company: This ensures a high level of commitment, e.g. to stand up for the company or a project in times of crisis or to resign less quickly in the event of dissatisfaction. This also helps to cope better with setbacks, which cannot be ruled out when implementing sustainability measures.
• Employees become brand ambassadors. If people are enthusiastic about a company with a culture of sustainability, they will communicate this to the outside world. If they are criticised, they are more likely to speak back and act as a credible "testimonial" from the company.  
• Employer attractiveness (employer branding): Sustainable companies, or companies on the way to becoming sustainable, are more attractive to people with a sustainable mindset (sustainability talent). The number of applicants is rising. Several surveys show that sustainability is already perceived as a decisive job criterion by more than half of applicants. We write more about this in the blog post "Sustainability as a job factor".
• Uniqueness: The special corporate culture creates a distinction and differentiation from other companies.
• External perception and market development: By improving its image, the company becomes more attractive to new or existing customers or suppliers or is perceived as a good player in urban society.

The benefits realised will contribute to the achievement of objectives in the long term and thus promote sustainable corporate success.

The downside of a strong corporate culture

A distinctive corporate culture can be disadvantageous in that it is difficult to change and requires a lot of (time) effort. This can be particularly challenging when it comes to new trends or rapid market developments. A strong corporate culture with a strong sense of belonging to a group (group cohesion) can also make it difficult for outsiders to integrate. This can also lead to company members becoming focussed on themselves, resistant to advice and difficult to access for external developments and trends (development of a wagon-castle mentality).

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Conclusion and final thoughts

Sustainability in particular presents companies with enormous challenges. The associated issues are diverse, far-reaching and dynamic. In addition to sustainability tools, climate targets, social indicators (structure) and individual motivation as well as the attitude and training of employees (individual level), a sustainable corporate culture is required. On the one hand, this is the link between the structure and the people; on the other, it is the foundation for working together towards a common goal. This helps to fulfil the long-term tasks and requirements of sustainable development. This creates room for manoeuvre and security.

Further blog posts:

• It all comes down to people: Sustainability in personnel management
• 15 example measures to motivate and make sustainability tangible
• Sustainability communication: communicating sustainability in the application process
• Tips for sustainability in the office: How to make sustainability tangible and visible in everyday office life!
• Overview: Developing a sustainability strategy within the company