Sustainability: Burden or Opportunity?

“Sustainability” is the concept of organizations moving beyond traditional financial metrics to define their company, and using a “triple bottom line” approach to incorporate economic/ financial, environmental, and social/ stakeholder issues into company management.  Some groups use “Corporate Responsibility” or “Corporate Social Responsibility (CSR)”.  “Green” or “Eco-friendly” are other terms.  “Sustainability” is the term that is a handy umbrella over all the others, and is used for this and in subsequent blog posts.  Whatever you call it, transparent reporting is a common requirement.

You encounter Sustainability at your company, from recycling bins in the lunchroom to reminders to turn off lights, and those emails that plead you to “think about the Environment before you print this email.”  You think for half a second, you print – using one side of the paper!  If this is all you know about Sustainability, it would be easy to dismiss it as a fad.  Sustainability is becoming more important to companies, and in ways they may not fully appreciate.  Here are how some stakeholders view your company’s Sustainability program and performance.

Customers consider Sustainability – either in general, or the issue(s) of most concern to them – as they make buying decisions.  This applies to both retail customers making choices on store shelves and business customers under pressure to “green” their supply chain.

Investors are seeking opportunities to invest in companies that achieve performance in Sustainability.  Many are driven by their customers’ expectations; others are looking for companies that have identified opportunities for competitive advantage through strategic adoption and implementation of Sustainability for branding, operational efficiencies, stakeholder relations or other practices.

Employees are looking for Sustainability commitment and programs.  Many employees consider their ability to participate in them an intrinsic value to working for your company.  CEOs can tap employees for suggestions to improve company performance; this also contributes to employee satisfaction.

Competitors are seeking advantage by publicizing Sustainability commitments, programs, and performance.  They may create distinct brands, emphasize existing brands, or use traditional or social marketing methods to position their products and services.

Burden or Opportunity?: The answer is up to you; it depends upon your outlook.  Companies that decide that Sustainability is a burden will get exactly that:  additional process activities, costs, paperwork, and time-consuming management attention to deal with one issue after another.  Companies that treat Sustainability as an opportunity will embed it into everything they do:  procurement; selecting office space or work arrangements; packing; service delivery; investor relations; corporate communications; and others.

There are a couple other basic questions with more basic answers:

Option or Requirement?: Sustainability is a requirement somewhere in your company; if you don’t know where or how, your company could be at risk. Environmental and Safety issues are regulated – but there is no U.S. Sustainability Enforcement Agency.  But Dodd-Frank includes provisions related to conflict minerals in supply chain. Local governments have enacted “green building” ordinances.  Some countries in the European Union require Sustainability reports for publicly-traded companies.  Sustainability provisions are now in sales contracts; this isn’t enforceable by the EPA, but a customer can drop you as a supplier.

Fad or Here to Stay?: Many executives wonder if Sustainability is a passing fad, or here to stay.  Sustainability is here to stay.   Sustainability consists of dozens of issues; these affect companies in different ways.  The risks are growing (losing customers, operating inefficiencies) – and so are the benefits (brand enhancement, cost reductions, public relations).  Applying business practices to embed Sustainability into your company will help your bottom line.  All three of them.

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