With climate change and environmental pollution topping industry news, corporations are finding that jumping on the sustainability train benefits their bottom line.
But what is sustainability? The Brundtland Commission issued the most commonly recognized definition of sustainability in its 1987 report, Our Common Future: "meeting the needs of the present generation without compromising the ability of future generations to meet their own needs." Sustainability is the premier buzz word and one of the significant global issues facing business today.
And what exactly does that mean to you as a business owner? Sustainability is a proactive approach on the part of a company for managing natural resources and reducing environmental and social impacts that ensures viability and enhances reputation with stakeholders (employees, customers, and suppliers), while not compromising profitability.
Why Go Green?
The answer, as always, lies in the bottom line. Some of the benefits of having a sustainable business or going green include:
- Setting a positive example for stakeholders
- Boosts morale, leads to recruiting and retaining the best employees
- Builds customer loyalty
- Positions you as supplier of choice
- Setting your operations beyond compliance and reducing your risks
- Benefitting the community and the environment
Not to mention that corporate responsibility and sustainable business practices can encourage creativity and innovation.
Although every organization has a different vision of how sustainability fits into their business model, balancing business operations with social, economic, and environmental responsibilities may determine business performance in the future. As sustainability progresses from disjointed projects to a philosophy integrated at all business levels, companies are finding that sustainability is good for business and has a positive impact on the bottom line.
Corporations are also discovering that demonstrating a commitment to sustainability offers a competitive advantage-nationally and globally-and it makes good business sense.
Baxter's Reasons for Sustainability
Baxter International, a multinational healthcare products manufacturer, is a company that has focused on sustainability for many years. At the 2008 NAEM Forum, Elaine Salewske, senior manager, Corporate Communications, offered the following reasons why Baxter International believes sustainability makes good business sense:
- It differentiates Baxter from other companies.
- It drives efficiency and creates a competitive advantage.
- It helps identify and manage risk.
- It enhances the company's reputation among various stakeholder groups.
- It supports the company's mission of sustaining lives.
However, in order to fully take advantage of the benefits that a robust sustainability program will create, information must get to the appropriate stakeholders. As a result, more and more companies are producing annual sustainability reports to document their efforts as good corporate citizens and progress toward reducing their environmental footprint. For example, Baxter International produced their first sustainability report in 1999 and, according to Salewske, in addition to providing stakeholders with an overview of company performance, the report allowed Baxter to establish a baseline and demonstrate progress over time, which ultimately helps the company advance its various sustainability programs.
Are energy efficient
Reduce, reuse, and recycle materials
Incorporate renewable resources
Close the loop
Triple Bottom Line
In the Age of Corporate Responsibility, a commitment to sustainability implies a commitment to triple bottom line reporting: "People, Planet, Profit." In practical terms, this means expanding the traditional reporting framework to take into account environmental and social performance in addition to financial performance.
The phrase "triple bottom line" was coined by John Elkington in his 1998 book Cannibals with Forks: The Triple Bottom Line of 21st Century Business. It is a serious and increasingly recognized concept, and companies are embracing it as a way to demonstrate commitment to sustainable business growth.
In the past, business decisions considered only profit-but now the triple bottom line recognizes that without happy, healthy people, a cleaner environment to sustain those people, and natural resources to offer supplies, a business is simply unsustainable in the long run. Triple bottom line is an ongoing process as companies continually adapt to the changing marketplace and the environment.
Triple bottom line legislation is under consideration in some U.S. states, including Minnesota and Oregon. A number of corporations have advocated for sustainable corporation laws that grant triple bottom line or sustainable businesses benefits such as tax breaks and low-priority routine inspections.
Challenges of 'Going Green'
Moving toward sustainable business practices can present challenges in balancing economic interests against social and environmental concerns. The following concerns can easily be curbed if your focus remains on demonstrating commitment-especially from top management.
- Get employees on board and committed. If your employees see a real commitment and enthusiasm through communication, it will trickledown. Encourage input so they can see themselves as valuable team players.
- Secure time and money. Sustainable practices need to be taken seriously by devoting time to define objectives and set goals. You must also invest in steps to meet your goals.
- Create a workable program to achieve measureable results. Communicate objectives with stakeholders.
- Maintain, improve, and adapt a green program with a forward-looking focus. You must take a closed-loop approach to obtain and sustain maximum benefits--this enables continuous improvement.
There is no one-size-fits-all solution to developing a green policy or sustainable workplace. You must work with what you have and remember that your employees are your best resource. Keep your focus on the triple bottom line.
- Start small--target a few areas for improvement and commit to those.
- Participate in business partnerships to share best practices.
- Focus on ideas that require minimal capital investment.
- Involve all employees-motivation is key to a successful green program.
Tip: Start with an energy saving or conservation plan--it is easy to implement, easily measured, and may present immediate benefits.
Your sustainability program should be built on the "Plan, Do, Check, Act" approach (outlined below) for continual improvement. This follows the ISO 14001 and ISO 9100 management systems model.
First, create a "green team" and appoint a respected person with project management experience as coordinator of the team. Members of the team should come from all levels and areas of your company and must include one person from top management.
Next, assess your current situation to determine your energy consumption, and identify how and where energy and materials are being wasted or usage reduced.
- Distribute employee questionnaire--no more than 8 questions.
- Contact suppliers for exact costs.
- Consider variations in energy use.
- Conduct an energy audit.
Once you've assessed your current situation, you will know the direction you should take, and you can set your goals.
Then, determine what systems to use to disseminate information with stakeholders (employees, customers, investors, etc.)--e-mail, training presentations, posters, or word of mouth.
Secure a budget for promotional materials and possible upgrades or for the purchase of energy-efficient technologies.
Create a timeframe to meet your goals. Be realistic about what is possible in a given timeframe.
Finally, create an incentive program to encourage proactive involvement by employees.
After you define roles, responsibilities, and authority among members of your green team, you can implement your new program. Some companies have a special launch event.
The program should be integrated into all areas of your business, including new employee orientation. Develop training materials for your employees.
Be sure to communicate your progress internally and externally--and be transparent about it.
To see the results of your program, you must monitor and measure progress-perform audits.
If you find areas that need improvement, identify corrective and preventive actions.
Be sure to document everything so you are able to communicate results and findings to top management for review.
After upper management has reviewed your progress, consider any recommendations and act on needed improvements.
In order to fully take advantage of the benefits that a robust sustainability program will create, information must get to the appropriate stakeholders. A sustainability report is a great way to communicate progress and demonstrate commitment to investors. And remember to also convey results to employees to keep up motivation on all levels.
If you take corporate responsibility and sustainable business seriously-People, Planet, Profit-your company can improve its operational efficiency and reputation among stakeholders, while reducing risk exposure and encouraging loyalty and innovation.
Overall, employees, customers, regulators, and joint venture partners will see your company as a good investment and a company of choice.
INFO: Contact BLR's Ana Ellington at 800-727-5257, ext. 2169.