There has been a large-scale change in the public perception of the importance of the environment and, as a reflection of that, businesses have changed as well.
This changes in attitudes can be attributed to increasing global demands on resources such as food, water and energy and the impacts of climate change that have focused international efforts to minimize the damage to our environment for future generations. Greater public awareness through the activities of organizations such as Greenpeace, the World Wildlife Fund and the United Nations Division for Sustainable Development , has put added pressure on governments and organizations the world over to work in a more sustainable way.
Fraser Paterson, sustainability adviser at global engineering , construction and technical services firms URS Scott Wilson believes there are three cornerstones to organizational sustainability:social , ethical and environmental sustainability . "Sustainability is concerned with ensuring the human rights of stakeholders through health and safety and equal opportunities practices, " says Frasier.
"The environmental aspects are concerned with tackling climate change and lessening your impact in the environment through responsible sourcing , waste management and energy efficiency. The ethical side is bound up with standards, codes of conduct and anti- corruption legislation as well as organizational values of transparency and honesty."
These three elements are increasingly being linked to a fourth element-that of economic sustainability. With the number of socially responsible investment funds increasing and tough conditions for business loans, the finance sector is looking towards long term stability rather than short term balance sheets.
Becoming sustainable
With financial , stakeholder and regulatory pressures to become more sustainable, it seems only common sense that organizations should work to lessen their negative impact on the environment and increase their positive impact , but it's not always easy. Frazier says: " To be successful with sustainability , organizations need to address four key areas : business integrity , technical innovation , human capital and leadership. Without a coherent approach and top-level commitment in these business areas, organizations cannot be truly sustainable."
Business integrity is all about setting the core values of an organization and gaining the trust of all stakeholders; both suppliers and customers. To do this businesses have to ensure effective corporate governance and transparency.
A famous example of an organization that does this well is the John Lewis Partnership, founded in 1929, which works against a constitution which sets out a founders' ideals.The framework available online , defines the partnership's principles and the way it should operate. Tessa Colman, John Lewis Kingston explains:" The partnership was ahead of its time in recognizing that commercial success depended on showing the highest level of good citizenship in its behavior within the community. The approach seems to work well with Waitrose , the supermarket arm of Partnership.
Similarly, Marks and Spencer 's approach to sustainability , Plan A , publishes its 180 commitments to becoming" the world's most sustainable major retailer" online. The company's plans are split into five areas:
- Climate change- with the target of making its UK and Irish operations carbon neutral by 2012.
- Waste- with the target of no clothing or packaging ending life as landfill
- Sustainable raw materials- ensuring high standards of animal welfare and sustainable resources of clothing materials.
- Fair partner- to set a new standard in ethical trading and improve the livelihoods of its suppliers and their communities
- Health - helping its customers to choose a healthier lifestyle.
Mark and Spencer openness with its targets and plans reiterates its commitment to sustainability , which in turn boosts its reputation for integrity.
According to Fraser, organizations should also be working to push forward technical innovations to ensure their sustainability. "Businesses need to look at their market place and come up with solutions that will help to drive the company forward and creates value," he says. " It could be developing new products or services , or a new approach that creates fewer green house gas emissions."
The creation , by Proctor and Gamble's washing powder brand Ariel, of a new washing gel that could clean clothes at 15 degree centigrade is a particularly good example of an organization using innovation to push sustainability. The new product helps to ensure consumers are saving energy , lowering the company's overall energy consumption, and enhances the brand's reputation as a market leader.
People Power
Innovation and integrity obviously offer businesses great help with sustainability , but without engaged people throughout an organization these ideals will fall at the first hurdle. Ben Eavis, Sainsbury's head of corporate responsibility says. " You need to have both a top-down and a bottom-up approach. Buy-in from senior management is crucial to gain traction with initiatives and to demonstrate why they are important for business, but without colleagues in store who display our values on a daily basis we would get nowhere."
One way in which Sainsbury's has worked to engage its staff with their store's impact on its local environment is to give each store control of its charitable funds. The company asks each store's staff and customers to nominate the local charity they think it should be supporting. "It means that everyone is really passionate about it and gets involved because it means something to them and their customers."
When it comes to the environmental side of sustainability. Max argues that the most important element for success is in educating people. "Businesses must teach their staff about how their actions influence the wider environment and will help organizations to become more sustainable. Without that basic understanding in the workforce a business plans for sustainability won't take off."
Equally important to internal staff is an organization's relationship with its suppliers. Max says: " Inherently sustainability is about ensuring your organization is sourcing everything it needs as responsibly as it can. The simplest and most effective approach is to source what you need from organizations that are certified as being able to create products in a sustainable fashion.
" One very good example is sourcing paper products from organizations certified by the Forest Stewardship Council. Alternatively, ensuring that your suppliers or contractors are certified to a management system standard such as ISO 14001, is a good way of ensuring that your organization is reducing its impact on the environment by influencing the people that supply you."
Future Challenges
Organizations' relationship with their suppliers are going to be even more important in the future according to Ben. " As food security , water security, climate change and population growth impact us as a business, we have to get closer to our suppliers to ensure they are as financially and environmentally efficient as possible so we can continue to offer the products that we do now long into the future.
" One example in how we are tackling this is our daily development group. It was set up in 2006 to help 325 dairy farmers more sustainably. We have growth targets and we want to be able to share those rewards with our suppliers, but we need to be sure they can grow with us. It's sustainability , but it's also business sense."
The biggest challenge facing organizations future commitment to sustainability is current financial pressures. Max says: "From the mid-1990s until a couple of years ago there was a period of real positivity about businesses becoming more environmentally responsible. Now, as the economy struggles , businesses are looking to cut wherever they can and while sustainability is seen as important, the principle is under threat because of strained finances.
"While some business can tie the financial side of their business to their environmental and CSR side nicely, for others that's just not the case. They are perfectly able to function well without doing so because there is no regulatory or stakeholder pressure for them to do it."
While the concepts of sustainability are clearly important , it could be that some organizations' approaches will be reliant on the wider financial situation.Max warns: "If the economy recovers relatively quickly there won't have been too much damage done, but the situation is very much dependent on the results of the drastic cuts the government is making now."
Fraser agrees that organizations' top priority in tough times is to remain financially viable, but argues that doesn't mean that they can stop considering sustainability . "Organizations can't just work sustainably in good times , they have to do it all the time!People have to get into the mindset that sustainability is a win-win situation. If you are working to ensure your business is environmentally, socially and ethically responsible, then you will enhance long-term profitability.
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| At Grand Hyatt Hotel- Singapore May 5-7, 2011 Jolito Ortizo Padilla is a Resource Speaker |
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