In the face of increasing public eco awareness and widespread media coverage businesses can no longer ignore the opportunities, concerns and risks posed by not having a sustainable business strategy. Business sustainability is now both a top-line and bottom-line company focus. Companies are implementing business sustainability plans that target revenue as well as cost reduction.
Think about it. How long does a company keep producing a product that does not sell? How long does a supplier last who fails to deliver on-time? In the business world, action must generate return to be sustainable. However, one of the challenges in transitioning business sustainability from the drawing board to daily practice is the ability to link sustainability concepts to specific business value.
Although business sustainability is not new, grasping sustainability concepts and its practical applications to a specific business is new to some business leaders. It is not uncommon within our business sustainability consulting practice to be questioned for specific examples as to the value of business sustainability. Pointing to industry leaders and leading companies is the easiest way to capture the attention of skeptical business owners.
A report, produced by the UN Environment Programme (UNEP) in partnership with SustainAbility and GlobeScan, uses compelling economic and scientific data and a wide-ranging collection of real-life case studies to demonstrate the advantages of the green economy in action. Included are examples of companies embracing environmental business to save and/ or make money, lighten the load on the environment, and foster support for sustainable business strategies from consumers and businesses alike.
For instance, Unilever’s Sustainable Living Plan, which aims to integrate sustainability into business models, has led to savings of over US $10 million dollars annually. At the same time, their “one rinse” washing formulas, which save an average of 30 litres per wash, are now used across 12.5 million households worldwide – a 60% increase over 2010 and General Motors saved more than US $30 million in 6 years through their resource productivity program while also reducing waste volume by 40%.
Despite the economic downturn and tenuous recovery, more than two-thirds of businesses are strengthening their commitment to sustainability, according to a global study by MIT Sloan Management Review (MIT SMR) and The Boston Consulting Group (BCG). The study, released in a report titled Sustainability: The ‘Embracers’ Seize Advantage, found that 69 percent of companies plan to step up their investment in and management of sustainability this year. Just over one-quarter (26 percent) plan no change, and only 2 percent intend to cut back on their commitment.
We find in our professional consulting that most companies want to make sure they are committing capital to the right business strategies. In the post, What is the Business Cost of Sustainability, we discussed the value of providing transparency to business sustainability costs. In evaluating business sustainability return, a company should consider both top and bottom-line impacts:
• Will base sales increase through improved reputation and customer loyalty?
• Will new market opportunity become available?
• Will new consumer segments be attracted to company products and services?
• Will overall sales increase from applied business sustainability concepts?
• What will be the resources requirements to implement sustainable change?
• How will sustainable actions affect exiting processes?
• Will material or service supply cost increase or decrease?
• Will overall long-term variable cost increase or decrease?
Our business sustainability consulting experience at Taiga Company has shown that each business has its own focus and value drivers, which give a company a unique view of sustainability. We work with business leaders, work groups, and stakeholders to bridge the gap between conceptual business sustainability to daily practice.