Successful sustainability planning has five key elements
Data tracking, engaged employees are among such an effort's keystones
Jeff HeggedahlJanuary 31st, 2013
It's my belief that today's leading businesses can both do well and do good; sustainability is both a smart business decision and a risk-mitigation activity. The fact is, companies can save money, save resources, and improve corporate reputation at the same time. Talk about a win-win.
I'm often asked why big companies invest in sustainability programs. A variant of this question I hear repeatedly in business settings is: What amount of resources do we really need to allocate for our sustainability programs? I link these questions because they point to a troubling ambiguity concerning the drivers for corporate sustainability efforts.
To unpack the answer to both questions, let's ground ourselves on terra firma. Businesses don't operate in a stock exchange, and their employees aren't numbers on a spreadsheet. Corporations operate in the living, breathing, physical worlda world that's undergoing unprecedented and rapid transformation.
Sustainability issues are complex and can be overwhelming, particularly during the early stages of crafting a sustainability strategy. In today's business and economic environment, developing a sound sustainability strategy and executing it successfully are table stakes.
Energy costs follow labor and materials as many companies' third largest budget item and the CFO's top concern. Additionally, the U.S. Department of Energy estimates that commercial facilities account for up to 50 percent of electricity use in the U.S., nearly 30 percent of which is wasted through controllable inefficiencies. Therefore, a company's energy-management and sustainability strategies should go hand in hand.
Developing a program that makes business sense, impacts the bottom line, and helps the environment can be intimidating. Many times, I am asked: What do successful programs have in common? Based on our strategic planning work with about 100 clients we've served since 2007, we've found that there are five important triggers, or keystones, that have a clear link to driving real benefits and achieving desired outcomes.
Data: Simply put, you can't manage what you don't measure. Functioning data tracking and reporting systems, even simple ones, are the foundation upon which all improvements and progress can be made. With access to data, companies can gain an exponentially greater understanding of their energy consumption, creating opportunities for significant energy reductions ranging from10 percent to 30 percentan excellent return on investment for sustainability programs.
People: People across the company who impact sustainability activities and decisions must be engaged and trained. We have found that visible executive engagement and leadership set the pace and ensure that sustainability change agents have the backing they need to lead organizational change.
Infrastructure: Physical and operational elements comprise the third keystone. We've found that the most effective sustainability plans result from organizations with broad sustainability scope, including energy, water, waste, carbon, supply chain, and transportation efforts. Initial infrastructure strategy starts with comprehensive audits, gap analysis, and project identification. Projects are then prioritized based on such factors as capital investment, return on investment, outreach potential, and other parameters. For some organizations, this could be a daunting task that may yield benefits from third-party expertise.
Marketing and reporting: Communicating in a transparent way to stakeholders is essential to build credibility for the organization's efforts. Clear and accurate reporting about the organization's goals, practices, and performance influence brand perceptions and support risk mitigation. Examples of two companies that have communicated their corporate sustainability message well include Patagonia and Interface Global. Both organizations demonstrate transparent messaging, clear plans and goals, and communicate progress toward those goals to all internal and external stakeholders.
Continual improvement: Given daily advances in the drivers and techniques for total energy and sustainability management, enduring success will be predicated on organizations' adoption of continual improvement process management.
Regardless of an organization's size or industry, developing a corporate sustainability strategy that's designed for success requires incorporating these five elements. We've seen consistently that companies that do this improved their organization's likelihood of delivering on sustainability goals.
An example of a company that effectively incorporated the five keystones into its corporate sustainability strategy and has steadily delivered on its goals is Burgerville Restaurants, an Ecova client and a regional chain in the Pacific Northwest. Burgerville maintains strong market share and customer loyalty primarily through its long history of community and sustainability engagement. Its holistic approach to sustainability planning will keep it well positioned to be a sustainability leader.
Why now? Corporate sustainability programs have shifted from a nice-to-have to a must-have. Raw material costs are increasing, energy volatility continues to mount, and significant water stress is making its way into board room banter. Our human infrastructure is being stressed by everything from changing precipitation patterns to the degradation of ecological systems on which we depend for food, water, and shelter.
Simultaneous with changes to our physical environment, our mental and social environment is transforming as well, with younger generations accustomed to unprecedented access to information.