Thanks to David Lub
in, senior advisor of Esty Environmental Partners and Chairman of Sustainability Innovators Working Group for a great webinar and article in Harvard Business Review on “The Sustainability Imperative” (http://bit.ly/irSDYM).
This is a particularly relevant topic to me since my employer, Bord na Mona (http://www.bnm.ie), is at the forefront of the sustainability movement thanks to a forward-thinking CEO who joined the firm five years ago.
No organization will be successful ignoring sustainability. Climate change alone will force changes and compel a response.
Most forward-thinking leaders see sustainability not as an earnings drag but as an opportunity for innovation that can create profitable growth.
The key lies in recognizing that sustainability is a megatrend, like the IT revolution, that is changing the way business is done.
Fueling the sustainability megatrend is environmental degradation, public awareness, changing business relationships, stakeholder pressure and more.
Mr. Lubin outlined the best practices for executing on sustainability. The common definition of which is, “meeting the needs of the present without compromising the ability of future generations to meet their own needs.”
Companies that can harvest sustainability opportunities more fully than their peers stand to benefit from valuation premiums on their stocks and competitive advantages in the marketplace.
Unilever is doing this in consumer packaged goods, Chipotle in quick-serve restaurants, CH2MHill in architecture, engineering and construction and SAS in software. These companies have changed thinking about sustainability from “a program,” isolated from other company functions, to “a way of doing business” which is integral to every department in the company.
To reap the opportunities of sustainability, Mr. Lubin suggests moving through four predictable stages:
- Proof-of-concept pilots focused on saving costs and reducing wastes. Dow has had an eco-efficiency program in place for 20 years that has returned $9 billion.
- Professionalizing the discipline with tools, processes, certifications and systems. FedEx has a sustainability certification program for their managers.
- Transforming the core business by integrating sustainable goals to drive innovation. Bord na Mona is doing this by moving from peat-based energy generation to wind and bio-mass based energy generation.
- Competitive differentiation in brand, business model and engagement of stake holders which include customers, employees, business partners, investors, shareholders, NGOs and influencers.
Seven of eight consumers say climate change is a top issue and 84% say it is important to buy from eco-friendly companies.
Leveraging sustainability for greater employee engagement can bring benefits to operations and customer service as well as revenue gains.
Investors want to capture the sustainability premium — improved returns with social, environmental and governance benefits.
Finally, the vicious cycle of attack and defend between NGOs and corporations are being replaced by deeply committed partnerships with a shared vision as evidenced by partnerships between:
- Dow Chemical and The Nature Conservancy
- Wal-Mart and the Environmental Defense Fund
- Coca-Cola and the World Wildlife Federation
Can your company benefit from a sustainability strategy? Is it already doing so?
Chipotle For Life 