Five years ago, “sustainability” was a cultural buzz word. Al Gore’s An Inconvenient Truth had just won the Academy Award for Best Documentary Feature and whether or not global warming was real was a topic for discussion in the presidential race between Barack Obama and John McCain. Magazines like Time and Newsweek regularly featured pieces on the “environmental debate” and attacked companies for green washing.
Times have certainly changed. This winter, the MIT Sloan Management Review reported that sustainability is approaching a tipping point with companies adopting sustainable business practices in record numbers. Of 4,000 survey respondents to their most recent sustainability survey, 70% of companies report placing sustainability permanently on their corporate agendas. The survey also found that, despite difficult economic times, a commitment to sustainability was on the rise. And this is not simply a recycling program or green team effort here and there – rather, companies are giving sustainability a seat at the table in recognition of its value in responding to customer & investor demand, driving competitive advantage, decreasing risks, increasing employee engagement, and impacting the bottom line.
The adoption of sustainability as a core business practice requires considerable organizational change and authentic effort. In order to develop buy-in from employees and to gain the greatest leverage, companies must develop a sustainability strategy that becomes embedded in the organization’s operations. The most successful adopters of sustainability focus their efforts on five primary targets when creating their sustainability roadmaps.
Build a Business Case
While a commitment to sustainability may be based on the values the collective members of an organization have around conservation of resources, ultimately, numbers talk. It is therefore imperative for companies to build a business case for sustainability that demonstrates the value to the organization in adopting new practices. And make no mistake – the business case is there to be made. Companies consistently report that they are saving money and increasing profits as a result of reduction targets, efficiency efforts, and innovation.
Companies that are the most successful with their sustainability strategy have created an organizational structure that supports this commitment. Sustainability officers, departments, cross-organizational teams, communication strategies, and performance management expectations help to lend credence and credibility to the sustainability function within the organization.
Sustainability presents a unique competitive advantage for companies creative enough to adopt it. The growing consumer demand for “green” products in every sector means that companies that are able to innovate and respond to this demand can realize greater market share and profit margin. The increasing interest in product lifecycle provides an opportunity to overhaul products and services to make them simultaneously more efficient and more attractive.
Successful adopters of sustainability have recognized that collaboration is key to performance and transparency. By involving employees and other stakeholders in the decision-making process as well as execution, engagement increases. By working together with competitors to share best practices, industry sectors can be improved (consider such organizations as the Sustainable Apparel Coalition, Electronics Industry Citizenship Coalition, and The Sustainability Consortium). Companies are also finding leverage within their supply chain, and a push for measurement and transparency in supplier operations continues.
Ultimately, sustainability is about reducing, whether that is a reduction in resource consumption, product packaging, or fleet emissions. By measuring a baseline, establishing reduction targets, and continuously monitoring reduction performance, companies are able to realize continuous improvement on a variety of levels.
Companies that realize the greatest sustainability success keep pushing forward even in the face of obstacles. They use metrics and creativity to move their initiatives forward. Companies that engage in sustainability only for the sake of compliance don’t experience nearly the same level of profitability as market leaders. The lesson? Take the plunge and adopt sustainability as a core business commitment.
We invite you to download our new white paper to learn more about how voluntarily embracing sustainability can make a significant contribution to your organization’s success.