The Challenges and Rewards of Business Sustainability P

The Challenges and Rewards of Business Sustainability P

What is a Sustainable Business?

 

A Sustainable business or green business, is a business that has minimal negative impact on the global or local environment, community, society, or economy.  A sustainable business embraces the concept of the triple bottom line approach to accounting. 

Many perceive the triple bottom line to create greater business value and to increase opportunities to serve those customers who lean toward environmentally sound solutions to everyday situations.



 

Business Sustainability Criteria

 

Many sustainable businesses embrace environmental policies.  A sustainable business is considered to be green if it matches the following four criteria:

 

  1. A sustainable business incorporates sustainability into all facets of it’s business.
  2. A sustainable business supplies environmentally friendly products or services that replace non-green products or services.
  3. A sustainable business is greener than it’s non-green competition.
  4. A sustainable business commits environmental practices in it’s business operations.

 

Business Sustainability in other words, is a business that meets the needs of the present, without compromising the ability of future generations to meet their own needs. 

 

Is Sustainability Social Responsibility?

 

Sustainability is often confused with corporate social responsibility, however the two are not the same.  While ethics, morality, and other social norms permeate CSR, sustainability only obliges businesses to make trade offs to safeguard the environmental equity of future generations.  Looking short term is the bane of sustainability.

Green business is seen as a mediator of economic versus environmental relationships in business.  Many feel that if embraced by all, sustainability would diversify our economy, even if it has little actual effect at lowering atmospheric Carbon levels.

 

What are Green Jobs?

 

“Green Jobs” definition is ambiguous at best, however most agree that green jobs should be linked to clean energy.  Because of this connection green jobs should contribute to the reduction of greenhouse gases.

Corporations can be seen as generators of not only “green energy”, but as producers of new realities which result from the technologies developed and deployed by these firms.

 

Sustainability is Environmental

 

Sustainable businesses main goal is to eliminate or decrease the environmental harm caused by the production and consumption of their goods.  The impact of such human activities is the greenhouse gases produced.

These gases can be measured in units of carbon dioxide and is often referred to as the carbon footprint.  Carbon footprint is usually defined as the total emissions caused by an individual, event, organization, or product, expressed as it’s carbon dioxide equivalent.

 

What are Green Initiatives?

 

Businesses take a wide range of green initiatives.  One of the most common examples is the act of “going paperless” or sending electronic correspondence instead of paper when possible.

Examples of sustainable business practices include repurposing used products, a great example is tuning up used commercial fitness equipment for resale.  Another would be revising production processes to eliminate waste, and choosing nontoxic raw materials and processes. 

For example, Canadian farmers found that hemp is a sustainable alternative to rapeseed in their traditional crop rotation.  Hemp grown for fiber or seed requires little or no pesticides or herbicides.

Sustainable business leaders also consider the “life cycle costs” for the items they produce.  Input costs must be considered in regards to regulations, energy use, storage, and disposal.

Designing for the Environment is also an important element of sustainable business practices.  This process enables users to consider a products potential environmental impacts and the process used to make that product.

The many green practices possibilities have led to considerable pressure being put upon companies from consumers, employees, government regulators and other stakeholders.  If given a choice, most customers will choose the “green product” if it is economically feasible.

 

What is Greenwashing?

 

Some companies have resorted to “greenwashing” instead of making actual and meaningful changes.  They simply market their products in ways that suggest green practices.

Greenwashing is a form of spin in which green PR or green marketing is used to promote the perception that an organization’s products, aims or policies are environmentally friendly.  Evidence that a business is greenwashing often comes when more money or time has been spent advertising being “green”, than is actually spent on environmentally sound practices. 

Greenwashing efforts can simply involve changing the name or label of a product evoking the environmental credibility of a product when it actually contains harmful chemicals.  Or greenwashing can be a multimillion dollar marketing campaign portraying a highly polluting company as eco-friendly.

 

Sustainability is Social

 

Companies that contribute to their communities, whether through employee volunteers or through charitable donations are considered to be socially sustainable.  Due to their community involvement, they are given social credibility toward being recognized as a sustainable business.

Businesses are often also recognized for encouraging education by employee training, and internships to mentor other community members.  These practices serve to increase education levels and quality of life in their community.

However to be truly sustainable, a business must foster a reverence for our natural resources and our environment.  The sustainable business reaches beyond social resources to enhance it’s reputation within the community it serves.

 

Sustainability Characteristics

 

Innovation & Technology

 

This inward examination of corporate sustainability practices focuses on a company’s ability to change its products and services making them produce less waste and emphasize sustainable best practices during all company activities.

 

Collaboration

 

This examines the formation of networks and partnerships with similar or partner companies to facilitate knowledge sharing and help propel innovation to new levels of achievement.

 

Process Improvement

 

Ongoing surveys help create improvement in the business processes which are essential to reduction in waste.   Enhanced employee awareness of your company sustainability plan further integrates the new and improved business processes.

 

Sustainability Reporting

 

Tracking progress made to embrace sustainability is necessary to report on company performance in achieving their goals.  Corporate sustainability goals are often incorporated into the corporate mission statement to further enhance the company sustainability strategy.

 

Greening the Supply Chain

 

To emphasize corporate adherence to their sustainability goal, procurement is a vital component of that strategy.  Sustainable procurement is a huge part of a company’s environmental impact, being much larger than the impact of the products they may consume.

Third party certifications, such as those given by the B Corporation (certification) model is a good example of one that encourages companies to focus on their sustainability issues and processes.  Companies could also implement an internal sustainability measurement and management system which included a forum for all stakeholders to discuss their sustainability issues.

 

Corporate Sustainability Strategies

 

Corporate sustainability strategies take advantage of sustainable revenue opportunities, protecting the value of the business against factors such as increasing energy costs.  A sound sustainability strategy also helps to mitigate the costs of meeting regulatory requirements, any changes in the way customers perceive brands and products, and the volatile price of resources.

Sustainability characteristics might not all be incorporated into a company’s Eco-strategy portfolio immediately. However their inclusion in your corporate sustainability strategy is very important to your corporate reputation.  The widely practiced sustainability characteristics include: Innovation, Collaboration, Process Improvement, Sustainability reporting, and Greening your supply chain. 

 

Triple top-line value production

 

Triple top-line values production establishes three requirements of sustainable business activities for companies.  These activities require financial benefits for the company, natural world betterment, and social advantages for employees and members of the local community. 

Each of these three components is recognized as equal in status.  While many businesses already embrace the triple bottom line approach to business sustainability, “triple top line” stresses the importance of initial process design and is a term attributable to McDonough and Braungart in their book Cradle to Cradle.

 

Nature-based knowledge and technology

 

This mimicry based principle involves the emulation of the natural world, adopting principles found in nature to help us grow our food, harness and use energy, and in building things and conducting business. 

The principles are also important for healing ourselves, and to help us process information and design our communities to exist in harmony with nature.

 

Products of service or products of consumption

 

Products of service are durable goods routinely leased by customer’s, that are made of technical materials and are returned to the manufacturer and re-processed into a new generation of products when they are worn out, obsolete, or simply no longer needed.

Products of consumption are shorter lived items made only of biodegradable materials. They can be broken down by organisms after the products lose their usefulness.  These products are also not hazardous to humans or our environmental health.

This principal requires that we manufacture only these two types of products and mandates the gradual reduction of products of service and their replacement with products of consumption as technological advancements allow us to do so.

 

Sustainable energy

 

This principle advocates for sustainable energy produced using solar, wind, geothermal and ocean energy that will be able to meet our future energy needs without negative polluting effects for life on earth.

 

Local-based organizations and economies

 

This principle envisions durable, beautiful and healthy communities, locally owned and operated businesses and locally managed non-profit organizations, partnering with regional corporations and shareholders.  All of these diverse groups working together in a web of partnerships and collaborations.

 

Continuous improvement process 

 

This principle envisions operational processes inside successful organizations which include provisions for constant advancements and upgrades as the company transacts its day-to-day business.  The continuous process of monitoring, analyzing, redesigning and implementing is used to ensure the success of Triple Top Line value production as conditions change and new opportunities emerge.

 

Challenges and Opportunities

 

Implementing sustainable business practices may have an effect on profits and a firm’s financial ‘bottom line’.  Initially, this financial challenge might make many corporate executives cringe.  However, during a time when environmental awareness is popular, green strategies are likely to be embraced by employees, consumers, and other stakeholders.

 

Environmental Performance Affects Economic Performance

 

In fact, according to many studies, a positive correlation exists between environmental performance and economic performance.  If an organization’s current business model is inherently unsustainable, becoming a truly sustainable business requires a complete makeover of the business model.

This presents a major challenge because of the differences between the old and the new model.  It also requires reviewing how the respective skills, resources and infrastructure needed may change with a new business model.  . A new business model can also offer major opportunities by entering or even creating new markets and reaching new customer groups.

Companies leading the way in sustainable business practices are taking advantage of sustainable revenue opportunities as they move into the future.  Recent surveys suggest that the demand for green products appears to be increasing, with 27% of respondents stating they are more likely to buy a sustainable product and/or service than 5 years ago.  Furthermore, sustainable business practices may attract talent to your business and generate tax breaks for your business.

 

Calculate Your Carbon Footprint

 

If you would like to calculate your Carbon Footprint, follow the link to the free carbon footprint calculator of the United States Environmental Protection Agency.  

 

Green wedding favors for your eco-friendly offbeat wedding P

Green wedding favors for your eco-friendly offbeat wedding P

These personalized popcorn favors can be food, favors, AND table numbers
Photo by Jordan Emmitt and Kelly Kee

Plenty of Offbeat Brides include sustainability in their must-have wedding planning list. Green wedding favors can add to the eco-friendliness of your special day, while also expressing your special style. Your first thought might be to go with eco-friendly materials like bamboo, but check out the creative ideas our offbeat brides have come up with!

Plants

Cactus can favors as seen on @offbeatbride
Photo by Burlap & Blossom

Send guests home with something they can plant! It’s green, more welcome than a tchotchke they’ll have to find room for, and wildly versatile. The cactus cans in the shot above add whimsy to a fiesta wedding.

Photo by Fash Photography

Succulents planted in recycled jars are a similar idea with a different style. And that’s one of the awesome things about getting creative with favors — every single one is special. Think not only about plants, but also seeds. Paper embedded with seeds can be used to print programs that also serve as favors, or try our DIY seed bombs!

Extra benefit — your guests will think of your wedding whenever they see those plants growing in their own spaces.

Vintage favors

A new spin on "happy tears" ceremony hankies
Photo by Greenseed Photography

Whenever you use vintage stuff, you keep it out of the landfill and save on the energy and raw materials that would have gone into making new.  Vintage hankies for happy tears are a perfect example. Vintage handkerchiefs are often very colorful and special, and you can find fancy ones with embroidery or hand-crocheted lace at very reasonable prices. Etsy and eBay are great sources, but don’t miss your local thrift shops or antique stores.

Let the mismatch be part of the fun with vintage trinkets like demitasse cups, keys, miniature picture frames, paper fans… you might be amazed by how many cool small favors you can find at flea markets.

Conceptual wedding favors

Photos by Maureen Cotton Weddings

Sophia decided to give an opportunity to pick a charity to her guests instead of a physical favor. Guests had the chance to support a good cause and Sophia felt great about how she spent her favor budget It was also a very sustainable choice. Read how she did it!

Lara made super-cute scrolls laying out the favors — from computer help to cupcakes –she and her spouse would be happy to do for their guests.

Other brides offered art, tattoos, or personal letters. It really is the thought that counts!

Recycled favors

Green wedding favors can be made from cast-offs. Special bottle cap magnets and personalized snow globes are just a couple of options.

Look around for recyclables you have or can easily source from friends and family, search our wedding favors archive, and be open to inspiration!

Consumable wedding favors

s'mores wedding favors
Photo by Catherine Clark

From tea to olive oil, things that guests will eat and drink won’t end up in the landfill. This idea also gives you a lot of flexibility in terms of time and money. You can make custom DIY microwave popcorn or gourmet s’mores kits, but you can also crowd-source the whole thing with a candy buffet and take-home bags.

Eco-friendly favors can be as varied and personal as any wedding favors — and you can feel good about them.

20 Small Changes to Have a Sustainable Wedding P

20 Small Changes to Have a Sustainable Wedding P

Photo by With Love and Embers. See more of this real wedding here

Your wedding is one of the most memorable days of your life, but did you know that it’s also one of the most wasteful? In fact, according to The Green Bride Guide, the average wedding produces anywhere from 400 to 600 pounds of trash and 63 tons of CO2–all in one day! Because of the pressure to have the picture-perfect day, many of us don’t think about the effect that our wedding purchases and excess food have on the environment.

Luckily, eco-friendly weddings are becoming increasingly popular—especially as micro weddings and elopements are on the rise. Planning a sustainable wedding does not have to be more challenging than planning less environmentally-friendly nuptials. However, we know figuring out where to start can be daunting. That’s why we’re here to help you navigate the world of green wedding planning.

Sustainable Weddings are Trending

At Junebug, we’ve seen our fair share of weddings–we’re talking thousands. We’ve noticed an upward trend in sustainable weddings, so we took to asking our vendors if they’ve also seen a difference!

This is what member Jenn Mauer of Wild Coast Photography had to say about the trend, Every year more couples are reaching out saying they want to have “smaller, more intentional” celebrations. Rather than a big, traditional wedding, I’m photographing more eco-friendly outdoor elopements where couples have the chance to be super specific about what things are a part of their day. Rather than physical objects, they are choosing experiences to celebrate this moment in their lives. Instead of huge floral arrangements, they’re choosing natural mountain backdrops. Instead of a big dinner reception with a generic catering menu, they’re choosing a small picnic of their favorite foods.”

The Future of Sustainable Weddings

“I really think sustainable weddings are the future, whether they are small two-person elopements or eco-friendly ballroom weddings that have been crafted to reduce waste. At this point, a wasteful wedding is out of touch – it’s easier than ever to choose small sustainable swaps to make a wedding eco-friendly!” 

Photographer Nikk Nuygen agreed, saying, “Today’s couples are concerned about the state of the planet and are passionate about lowering their carbon footprints as much as possible. Most modern couples don’t want a wedding full of excess waste and unnecessary items, especially with the increasing costs! When it comes to sustainable weddings in 2020, it’s all about locally sourced and seasonal food, natural materials over plastic, recycled paper and goods, eco-friendly and all-inclusive venues, and mindfully choosing decorations (reusable is preferable).”

Photo by Scarlet Roots. See more of this real wedding here

How To Find A Sustainable Wedding Venue

One of the easiest ways to host a sustainable wedding is to find a venue that prides itself on reducing its carbon footprint, recycling wherever possible, and incorporating renewable energy sources.

Junebug member Kat Warner of Benjamin T Warner Events put together the perfect list of questions to ask a potential venue to gauge what efforts they use to be environmentally friendly:

  • Do they offer recycling or composting bins on-site, or recommend a local green trash service?
  • Do they offer rentals?
  • What seasons would lower the wedding’s carbon footprint?
  • Are there any local vendors or organizations they recommend connecting with?
  • Are renewable energy sources, such as solar generators, available?
  • Do they incorporate sustainable operations or methods? Options like carbon offsetting, gravity rainwater harvesting, solar-powered energy, seasonal options, etc.
  • Do they work with a local conservation organization? These organizations typically look like a conservation easement, a mentoring program, etc.

Junebug member Sachin Khona suggests looking into whether or not a venue is LEED-certified. She says, “the LEED certification process ensures that the venue is functioning in a sustainable and energy-efficient manner. This includes water savings and materials selection. You’ll feel better knowing your wedding is housed in a caring environment. 

19 Other Changes You Can Make For A Sustainable Wedding

1. Be Thoughtful About Who You Hire

Hiring vendors that care about sustainability themselves and are willing to work with you to be as sustainable as possible is critical. Life is easier when you’ve got people in your corner, and the same goes for wedding planning. Vendors that share your same views will make wedding planning that much easier.

2. Keep the Guest List Small

While it may seem tempting to invite everyone you know to your special day, the smaller the guest list, the less waste you will produce. If you’re in the wedding planning process and you’re overwhelmed with the thought of cutting friends and family from your guest list, use these tips to help you narrow it down.

Watermark Invitation via Minted

3. Choose Eco-Friendly Recycled Invitations or Opt For Virtual Invitations

There are so many options available for eco-friendly invitations. It’s easier than ever to find invitations made from recycled paper, upcycled fabric, leather, and even wood. Some companies also give back with every purchase. For example, Paper Culture offers 100% post-recycled paper invites, and they plant a tree in your honor with every purchase. Botanical Paperworks prints their invites on seed-infused paper that you can plant and turn into flowers.

4. Create an Eco-Friendly Registry or Have Guests Donate to a Charity of Your Choice

We know how easy it is to go a little scan-crazy when you’re putting together your wedding registry. However, before going shopping, make a list of sustainable items that you and your new spouse would like to add to your home. Whether it be recycled ceramic or reclaimed wood, there’s usually a sustainable alternative to our everyday household item or decor.

If you would rather forgo the gifts, have your guests donate to a charity of your choice. Whether you’re passionate about feeding the homeless or educating children, there are so many charities to choose from Get creative and find a charity that speaks to you like this real couple who had their guests donate to a local food rescue charity in New Zealand.

5. Buy Ethical Wedding Rings

Did you know that it’s important to track the origins of your diamonds and gemstones? Due to poor planning and regulation, diamond mining has created a real mess. Finding ethical wedding rings will help you avoid this pitfall.

If you want a conflict-free diamond ring, look no further than lab-grown diamonds. Moissanite is starting to take the world by storm, and for a good reason. It’s a rare, naturally occurring mineral created in a lab, so you don’t have to worry about harming the Earth. The best part? Moissanite stones look exactly real diamonds and cost a whole lot less. Companies like Brilliant Earth pride themselves on being as ethical as possible while producing seriously stunning jewelry.

You can also switch up ring shopping by looking for vintage options. Whether your family has a precious heirloom or you shop at an estate sale, vintage rings are truly one-of-a-kind.

Photo by Michelle Lyerly Photography. See more of this real wedding here

6. Choosing An Eco-Friendly Wedding Dress

Who says you can’t be sustainable and still look fabulous on your wedding day? Many gowns are created as “fast fashion” but that doesn’t mean you are entirely out of luck when it comes to your wedding dress. There are many wedding dress designers who focus on ethical production and eco-friendly fabrics. Some of these popular designers include Grace Loves Lace, Sanyukta Shrestha, and Reformation Bridal.

You can also give a pre-loved wedding dress a second chance. Etsy, Nearly Newlywed, and Preowned Wedding Dresses are just a few of the places you can find gently worn gowns. This is a great way to get the dress of your dreams without spending extravagantly!

7. Rent Tuxes for Groom and Groomsmen

Unless galas are regularly part of your social life, there is no need to have a nice tux on hand at all times. Save you—and your groomsmen—money and help the planet by renting a tux from sites like The Black Tux and Generation Tux. That’s what we call a win-win.

8. Get Married Outside

As mentioned earlier, finding a sustainable wedding venue may seem tricky. There’s one option that makes being environmentally friendly a piece of cake–the great outdoors! What better way to be one with nature than to tie the knot surrounded by a lush forest or the rolling countryside?

Outdoor venues typically have built-in decor, making them easy to work with. Vineyards add scenic backdrops while greenhouses bring lush greenery without the need to bring cut florals.

Photo by Henry Tieu Photography. See more of this real wedding here.

9. Think About Travel

If you have your heart set on a destination wedding, consider the travel necessary for friends and family. If visiting a faraway destination, you and your guests are likely going to have to hop on a plane, which can drastically affect your carbon footprint. Destination weddings don’t need to be counted out just for sustainability. Businesses like My Climate offer a calculator to offset your carbon footprint from travel.

Travel isn’t necessarily only by airplane. If you’re hosting your wedding in two different venues–one for the ceremony and one for the reception—consider offering a shuttle service or ask your guests to carpool as much as possible.

10. Check Facebook For Wedding Decor

We can’t stress this enough–Facebook groups are your best friend while wedding planning! Couples are often looking to sell their wedding decor once the wedding has passed, and one of the best places to do so is Facebook. Whether it be Facebook groups or Facebook Marketplace, you can find everything from linens to glassware to lighting.

Photo by Karra Leigh Photography. See more of this wedding inspiration shoot here

11. Reuse Flowers or Opt For Dried Flowers

There is no doubt that flowers are one of the most stunning ways to dress up a venue. Fortunately, there are a few ways to get the most out of your floral arrangements. If you are using floral arrangements in your ceremony, choose to reuse them for your reception as well. Turn your backdrop into a photobooth, or use your bridal party’s bouquets as decor for your cake table.

Potted orchids, roses, and succulents also make great focal points for tables and can be taken home and used as decor once the day is done.

If you’d prefer to skip the flowers altogether, we’ve put together a list of creative floral alternatives that will still have your wedding day looking elegant and well put-together, all without the worry about what to do with them once the wedding is over.

12. Donate Leftovers and Decor

One of the most significant ways waste accumulates at weddings is discarded food, decor, and flowers. Rather than throwing everything in the garbage, consider donating it.

Resell wedding decor on those Facebook groups we mentioned earlier, and donate leftover food to local food kitchens, if possible. If regulations prohibit this, give your guests the option to take food home in to-go containers.

Photo by Dearheart Photos. See more of this real wedding here

13. Skip the Confetti or Rice Toss

While rice or confetti looks great in photos, it’s not very environmentally-conscious. There are alternatives that are just as beautiful–one could argue that they’re even more beautiful. If you still want a dramatic send-off before your reception, go down the natural route with dried flowers. Some of our favorites include lavender, rose petals, leaves, and dried flowers.

If you can’t part ways with the idea of a confetti toss, look into dissolvable confetti! The Confetti Bar has multiple colorful options that will still give your photos that “wow” factor.

14. Avoid Single-Use Dishes and Utensils

This is one of the easiest switches to make when planning a green reception. While it may seem easy to opt for single-use plates, napkins, and utensils, these options produce lots of extra waste. Renting dishware and glassware not only helps make a significant impact, but it also adds an extra touch of glam to your special day.

15. Choose Caterers That Source From Local Farmers

Eating local is always important, as the carbon emissions from shipping food across the country can be extremely detrimental to our environment. When putting together your wedding menu, have a conversation with your caterer to find out where they source their food and if you are able to keep the food menu seasonal.

16. Consider a Vegan or Vegetarian Menu

This suggestion might be slightly controversial, but stay with us here. Consider serving vegetarian and vegan options. Plant-based meals consume fewer resources than dishes that rely heavily on animal products. This may sound daunting, but there are endless possibilities that avoid animal products. Your top-notch caterers can make your dream meal come true.

Photo by Karra Leigh Photography. See more of this real wedding here

17. Skip Buffets

Speaking of your menu, while a buffet may seem like an easy choice–as it gives your guests choices–it can also lead to a lot of food waste. Hosting a plated dinner will ensure that you have just enough food for the guests that attend.

18. Cut out Balloons and Floating Lanterns

Balloons and floating lanterns have become increasingly popular for over-the-top exits at the end of the evening. Balloons, if not disposed of properly, can end up being eaten by animals. Floating lanterns can not only be a fire hazard for you and your guests, but they can also spark forest fires if in wooded areas.

19. Rethink Your Wedding Favors

How many times have you gone to a wedding and left with a wedding favor that you know that you will never touch again? Wedding favors are a great way to thank your guests for celebrating with you, they are often small goods that we forget about once we leave the wedding. Tasty edible gifts are popular for a reason—guests will look for midnight snacks after a night of celebrating with you.

We hope these small changes help inspire you to reduce waste and host the sustainable wedding of your dreams, Junebabes. Use even a few of these tips and you’ll ensure you feel beautiful and sustainable for your incredibly special day. For more eco-planning inspiration, read about how you can repurpose your wedding decor from ceremony to reception!

Photo by Scarlet Roots

 

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Responsible Sustainability is Your Business Success Story P

Responsible Sustainability is Your Business Success Story P

Business Has a Sustainability Role

 

It’s become accepted that business has a role to play in improving the environment and dealing with climate change.  What is undecided is how to do that, and for some, what actions are expected.  Generally, companies are comfortable doing business as usual, and few want to threaten their competitiveness in favor of green virtue.

My point is that this is not an either or question.  A growing number of examples, from diverse industries, show that sustainable business practices can be good for business.  Many companies just do the right thing.  While others are spurred to act because their customers expect it.

A good example is Unilever which has developed washing-up fluids that use less water.  And their sales are growing fast, especially in water-scarce markets.  Most of us can name a favorite product or two whose brand is intimately associated with its green credentials.  My point is that sustainability can be much more, that it has a role in any and all sectors.

 

Brewery embraced sustainability reducing green house gas emissions by 30%

Sustainability Can Be Profitable

 

A major brewer identified 150 possible improvements that could reduce Green House Gas emissions—while saving $200 million over five years.  Implementation of the improvements was a major cost savings move which went directly to their bottom line.

 

Sustainability Programs Can Be Complicated

 

The nitty-gritty of sustainability programs can get complicated.  But the principles are actually pretty simple —and should be familiar to most business people.  First, and most important, is to acknowledge that sustainability is important.  The case is often not difficult to make.

In a recent survey of 340 executives, more than 90 percent said risk management—whether from consumers, regulators, or the market—was an important factor in pushing them toward sustainability initiatives.

 

Define Your Sustainability Goals

 

It is important to define targets that are both specific and achievable.  It’s much better to say “Eliminate X million pounds of packaging,” than to use the vague “Reduce the footprint of our packaging.”

A recent analysis found that only one in five companies in the S&P 500 had defined, long-term goals when it came to sustainability.  Despite the fact that more than a third (36 percent) said sustainability was a top-three priority.

 

Set Measurable Sustainability Goals

 

Once the decision is made, define your company sustainability priorities, setting measurable targets.  These should be easy to establish after evaluating their costs and benefits.  To make these goals easier to achieve you may need to create consistent incentives, including those related to executive compensation.

For example, Nike tracks its suppliers on a range of metrics, including quality, timeliness, cost—and sustainability.  Falter for long on any of these, and the consequence is fewer orders.  Result: many more suppliers are hitting their sustainability mark.

DuPont has no trouble justifying its sustainability initiatives to shareholders.  it’s sustainability initiatives are generating billions in revenue from products that reduce emissions.  Intel has a dedicated finance analyst whose job is to calculate the value of its sustainability efforts.

To reduce emissions and improve other environmental metrics in its food chain, Wal-Mart tracks not only Green House Gas output, but also it’s yield, water use, and other factors per ton of food produced.  In addition to achieving environmental improvements, it cut the price of food and vegetables in the United States by $3.5 billion.

 

Develop a Sustainability Culture

 

The point is this, real business sustainability efforts are core business efforts.   Because they are not always easy, they can help a company to raise its game and perform better in all kinds of ways.

 

Business people embracing sustainability as part of their business culture

In mid-2014, McKinsey did a study that found a strong correlation between resource efficiency and financial performance.  Their study discovered that companies with the most advanced sustainability strategies did best of all.

In a study for the Harvard Business School that drew similar conclusions about a higher return on equity and assets for higher-sustainability companies, the authors concluded, “developing a corporate culture of sustainability may be a source of competitive advantage in the long run.”

 

Sustainability Creates Value

 

To think of sustainability as a niche gets it wrong.  To do it right, your business sustainability goals need to be rigorous, goal-oriented, and accountable.  Evidence is building that sustainability initiatives work, and that they are an important factor in creating long-term value.

 

How to Bring Discipline to Your Sustainability Initiatives P

How to Bring Discipline to Your Sustainability Initiatives P

Why Your Business Should Embrace Sustainability

 

Sustainability has become a part of life for many companies.  For many, it’s simply a matter of meeting demands from customers seeking socially responsible goods and services.  For others, it’s about addressing pressure from stakeholders or pursuing their own corporate values.

For still others, business sustainability is a strategic responsibility, especially those in a resource-constrained environment.  Whatever the reason, sustainability is sufficiently pervasive that defining it and executing business programs, products, and practices with an eye to their environmental and social implications has become a demanding managerial exercise.

 

Sustainability Identifies Opportunities

 

For some, sustainability has identified opportunities that they might have otherwise missed.  Whether it was to cut costs, reduce risk, and generate revenues.  Consider the multinational consumer-goods company Unilever, which changed the shape of deodorant to use less plastic in packaging and created a concentrated laundry product that sharply reduces its use of water.

German pharmaceutical company Bayer expects to save more than $10 million a year with a resource-efficiency check it developed to improve operations by using by-products and reducing wastewater. Global chemical company DuPont has recorded $2 billion in annual revenue from products that reduce greenhouse gas emissions and another $11.8 billion in revenue from improvements in nondepletable resources.

 

Why Do Some Struggle Over Sustainability

 

To better understand the challenges that companies face with creating value from sustainability.  We worked with sustainability groups to identify managers to collaborate on analyzing their programs.

What we found is that companies often have more initiatives than they can effectively manage.  The sustainability movement is flexible, including everything from environmentalism, resource management, corporate governance, and human rights.

Some managers in different regions may be enthusiastic about their efforts without taking a company-wide perspective.  In most cases, their efforts are too fragmented to create much value, either for the company or for society.

 

How Sustainability Provides Solutions

 

Thankfully, that kind of problem’s solution is well known.  We found that if they applied performance management principles to their sustainability initiatives most companies would benefit.  Companies must keep their sustainability programs focused, set specific goals, create accountability for performance, and communicate the financial impact.

 

Where To Focus Must Be Agreed

 

Getting leadership attention to sustainability initiatives is one of the biggest challenges companies face.  In a recent report for the United Nations Global Compact, 84 percent of the 1,000 global CEOs surveyed agreed that business “should lead efforts to define and deliver new goals on global priority issues,” but only a third said that “business is doing enough to address global sustainability challenges.”

 

Why Do Some Fail To Focus

 

The problem at many companies is often one of focus.  Two-thirds of companies in a representative sample from the S&P 500 have more than 10 different sustainability focus topics.  Some have more than 30.

That’s too many, making it difficult to imagine how a sustainability agenda with more than 10 focus areas can break through and get the necessary buy-in from leadership to be successful.  If top management doesn’t prioritize, then departments won’t either.

The result is fragmented, decentralized, and not aligned with one another or with overall top-level goals.  This slows the social and environmental impact but also the economic value.  A recent McKinsey Global Survey found that companies having a unified strategy and no more than five strategic priorities were almost three times as likely to be among the strongest performers.  Both financially and on measures of sustainability.

Coca-Cola, for example, has set for itself a strategy it describes as “me, we, the world,” which is it’s approach to improving personal health and wellness among the communities in which it operates and the environment.

The company reports making material, tangible progress on metrics related to three specific areas of focus: “well-being, women, and water.”  The company does not ignore other issues such as climate change and packaging, but it has made it clear that this is where it wants to lead.

 

Why You Need To Analyze Your Value Chain

 

To develop your priorities, it’s important to start by analyzing what matters most along the entire value chain.  You can accomplish this through internal analysis and consultations with stakeholders, including customers, regulators, and nongovernmental organizations (NGOs).

This process should enable companies to identify their sustainability issues with the greatest long-term potential and thus to create a systematic agenda.  You don’t want to create a laundry list of vague desirables.

 

One Company, BASF Maps it's Sustainability Priorities

After consultations, BASF, the global chemical company, put together a “materiality matrix” exhibit which is shown above.  This chart ranked the importance of 38 sustainability-related issues, based on their importance to BASF and its stakeholders.

This type of exercise helps companies to recognize the important issues early and get internal stakeholders to agree on what will create the most value.  Their focus needn’t be mechanical but should instead reflect discussion on the strategic, reputational, and financial merits of different efforts.

 

Set Specific Sustainability Goals

 

After completing your initial analysis, the next step is to translate this information into external goals that can be distilled into business metrics. These goals should be specific, ambitious, and measurable against an established baseline, such as greenhouse-gas emissions.  Your goals should have a long-term orientation and be integrated into your business sustainability strategy. Finally, the intent of your goals should be unmistakable.

One company stated as a goal: “Reduce the impact of our packaging on the environment.”  From a different company came a sharper version: “Eliminate 20 million pounds of packaging by 2016.”

Along the same lines, “reducing emissions” is a vague and almost meaningless phrase.  It doesn’t say by how much the company should reduce emissions, by when, or compared with what benchmark.  The approach taken by another sustainability leader is stronger and more specific: “Reduce 2005 CO2 emissions by half by 2015.”

 

Build Internal Support For Your Sustainability Goals

 

It is important to build adequate internal support to meet your goals.  Our analysis found that the companies that excelled at meeting sustainability goals made sure that they involved the business leaders responsible for implementing them from the start.

One global manufacturer announced in 2010 that it would reduce greenhouse-gas emissions and energy consumption by 20 percent by 2020.  To reach their goal, they set up energy assessments and energy-management plans, established global programs to optimize procurement and building standards, trained and developed internal “champions” and coordinated best practices, and began to use renewable energy where possible.

They communicated their early wins internally through a newsletter and regular conference calls.  Four years into their ten-year effort, the project is already net present value positive.

 

Encourage Sustainability Innovation

 

Setting ambitious external goals motivates your organization.  It also forces resources to be allocated and promotes accountability.  An analysis of companies that are part of the Carbon Disclosure Project found that those that set external goals did better when it came to cutting emissions.  They also had better financial returns on such investments.

Stronger goals, seem to encourage innovation.  People may feel more motivated to find ways to meet them.  Lack of goals is a sustainability killer: “What gets measured gets managed” is as true of sustainability as it is for any other business function.

And yet that is not happening.  An independent analysis of S&P 500 companies suggests that as of this writing only one in five S&P 500 companies sets quantified, long-term sustainability goals.  Half of the companies do not have any published sustainability goals.

 

Communicate Sustainability’s Financial Impact

 

Despite growing evidence of the value of investing in sustainability, many executives still have doubts.  Senior management gives sustainability lip service but not capital if they do not see financial benefits. “Sustainability metrics can seem like random numbers and don’t do much,” one chemical-industry executive told us. “For our businesses, sustainability efforts have to compete directly with other demands, which means that financial impact is key.”

Nearly half of the research participants reported that the pressure of short-term earnings performance is at odds with sustainability initiatives.  A constructive response is to make the case that sustainability can pay for itself, and more.  This needs to be done rigorously, reinforced with fully costed financial data and delivered in the language of business.

 

Make Sustainability’s Business Case

 

This is much easier said than done.  At Intel, although business leaders were interested in saving water, they saw little financial justification to do so: water was cheap.  Advocates of the initiative were able to calculate that the full cost of water, including infrastructure and treatment, was much higher than the initial estimates.

Saving water, they argued, could create value in new and unexpected ways.  Because of those arguments, Intel went ahead with a major conservation effort.  The company now has a finance analyst who concentrates on computing the financial value of sustainability efforts.

Making the business case for sustainability might sound like an obvious thing to do, but apparently, it isn’t. Only around a fifth of survey respondents reported that the financial benefits are clearly understood across the organization.

 

Measure Sustainability’s Savings

 

Sustainability initiatives can be difficult to measure because savings or returns may be divided across different parts of the business.  Some benefits, such as an improved reputation, are indirect.  It is important, not only to quantify what can be quantified but also to communicate other kinds of value.

An initiative might improve the perception important stakeholders have of the company, the better to build consumer loyalty, nurture relationships with like-minded nonprofits, and inform policy discussions.

 

Create Sustainability Accountability

 

The top reason that respondents gave for their company’s failure to capture the full value of sustainability is the lack of incentives to do so, whether positive or negative. According to the United Nations Global Compact, only 1 in 12 companies links executive remuneration to sustainability performance.

While 1 in 7 rewards their suppliers for good sustainability performance. Among survey respondents, 1 in 3 named earnings pressure and lack of incentives as reasons for poor sustainability results; 1 in 4 named lack of key performance indicators and insufficient resources.

 

Exhibit Good Sustainability Practices

 

In this area, a number of companies exhibit good business sustainability practicesfrom which others learn.  Some are strong when it comes to tracking data and reporting indicators, tracking carbon emissions and energy use, monitoring water use and waste, and recycling.

Adidas demonstrates one useful approach.  The sporting-goods company breaks down its long-term goals into shorter-term milestones.  Its suppliers, for example, are given strategic targets three to five years ahead, as well as more immediate goals to encourage them to focus.  The effort makes it very clear what is expected of suppliers for the current year.

The beer company MillerCoors does something similar.  It tracks and quantifies progress in ten areas, ranging from water to energy to packaging to human rights, using its own sustainability-assessment matrix.  The idea is for MillerCoors to understand its performance, in quantitative terms, in areas that are often difficult to quantify.