Jun '13

Real World Corporate Sustainability

Chatting with Gavan the other day, I was confronted with the issue of how sustainability can mean different things to different people. Indeed, in a previous blog (15th October 2012) Gavan made the point that a development can be seen as sustainable by one expert and very unsustainable by another. Does this mean that sustainability professionals run the risk of being as contrary as economists or is there an “absolutely common global agenda”?

I think the answer is that for some aspects of sustainability, there are globally accepted answers while for others, the agenda is still being formed. This can make it difficult for businesses to know what to do. However, a lot of companies have started down this road and others can learn from them. There are now a few widely accepted frameworks that can help set a company’s sustainability agenda. The best known is the Global Reporting Index (GRI), which is run by a not-for-profit organisation (www.globalreporting.org). There are also the requirements set for the London Stock Exchange’s FTSE4Good Index and by the Dow Jones Sustainability Index.

Using one of these frameworks as a guide can help companies plot a course towards sustainability but before we look at one of them in more detail, let’s go back to what sustainability means business. Start by thinking about what you business will need to still be thriving in 50 years time. I use the mantra: profit, planet and people. If a company wants to remain in business it needs to look after these three things. If you look after these three issues, it should benefit your business, the planet and society.

You need to take care of people because you need employees, investors and customers. You need to look after the planet because you need physical resources, energy and space and you need to get rid of waste. You need profit because you aren’t a business if you don’t make a profit over the longer term.

So, let’s get back to the frameworks. If you look at the Global Reporting Initiative, you will see that it is designed to help companies report on sustainability. By going through the issues it covers, companies can decide which are most relevant to their business and then start to manage these. When deciding relevance, you need to think about what is important for your company’s success and about risks posed by the different issues.

Sustainability covers such a wide range of issues that no company can deal with them all from the start. However, large companies, like Marks & Spencer, might cover many different issues. Marks & Spencer launched their Plan A sustainability approach with 100 Key Performance Indicators (KPIs) in 2007 and now have 180 KPIs. All the effort gives financial benefits: in 2011/12 Plan A returned £105m net benefit to the business.

To get your business to benefit from sustainability you need to be clear on why you are doing it. Then choose KPIs that are relevant to your operations, including your supply chain, sales and after sales. Don’t duck the difficult issues – be open about them and decide how you will improve. Be clear about what you are already doing well but don’t exaggerate. Your business won’t become sustainable overnight but you can start moving in the right direction.

Martin Gibson

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