The Sustainability Of Business

The downturn affected everything, not least sustainability. As a result, organizations are now revisiting what it means to be sustainable and embracing the business benefits.

The global recession had many impacts, one of which was that sustainability slipped way down the news agenda. As illustration, in the thick of the downturn last year, the BBC’s environment correspondent Richard Black despairingly noted in his blog that 4,000 journalists had attended the UN World Summit in 2005, while in 2009: “hardly a news reporter came” to the UN Commission on Sustainable Development’s (CSD) annual meeting, “and hardly a news report emerged. “He added: “In one sense, this is incredible. The CSD’s agenda is humanity’s future; so in the minds of news editors the world over, this is not a story?”

This begs the question, is sustainability no longer ‘a story’ for businesses, when the priority has become pulling out of the downturn?

In fact there is evidence to show that, on the contrary, sustainability is seen as an antidote to the downturn by leading businesses; and that organizations are using “green” and “socially responsible” activities as levers for economic recovery.

The downturn affected everything, not least sustainability. As a result, organizations are now revisiting what it means to be sustainable and embracing the business benefits.The global recession had many impacts, one of which was that sustainability slipped way down the news agenda. As illustration, in the thick of the downturn last year, the BBC’s environment correspondent Richard Black despairingly noted in his blog that 4,000 journalists had attended the UN World Summit in 2005, while in 2009: “hardly a news reporter came” to the UN Commission on Sustainable Development’s (CSD) annual meeting, “and hardly a news report emerged. “He added: “In one sense, this is incredible. The CSD’s agenda is humanity’s future; so in the minds of news editors the world over, this is not a story?” 1This begs the question, is sustainability no longer ‘a story’ for businesses, when the priority has become pulling out of the downturn?In fact there is evidence to show that, on the contrary, sustainability is seen as an antidote to the downturn by leading businesses; and that organizations are using “green” and “socially responsible” activities as levers for economic recovery.

Adopting sustainability is also almost invariably a way to embrace the innovation and new technology which leads to market advantage.

It acts as a catalyst for businesses and organizations to seek out the better materials, the better suppliers, the better product designs, the better waste management strategies, the better processes and the better labour and societal relationships – all of which bring competitive advantage.

In turn this lets the organization tell a better story about itself which confers reputational benefits. Superior supply chain partners are easier to find, ethical investment fund managers and venture capitalists are more likely to invest because they see you have a future, consumers and employees are more likely to remain loyal – and new ones are easier to attract.

So sustainability develops brand value, even as it embeds responsiveness to customer preference and growing consumer awareness of the issues. And as this awareness grows across the board – from the carbon cost of products to the human cost of cheap labour – consumers will likely continue to drive the growth of the sustainability market to the benefit of those businesses who get involved.

Finally where sustainability was once a feel good factor, it is rapidly becoming a legal requirement in many areas, from waste disposal to air quality, from carbon emissions to corporate accountability and transparency, with new legislation constantly emerging. By embracing sustainability, organizations will be anticipating or mitigating the impact of the growing body of sustainability legislation.

But enough about theory, what about practice? In the real world, how does sustainability benefit organizations using standards and working with BSI?

In BSI’s experience and at its most basic, sustainability undoubtedly saves money. Aside from the savings made by being compliant with legislation, behaving sustainably calls for organizations to review their environmental impacts. This leads to the measurement and then the reduction of the amount of materials and energy they consume and the amount of waste they generate and pay to put in landfill – all of which ultimately reduces cost.

Moreover standards, by their very nature, embed systematic and thorough processes which ensure opportunities aren’t missed and that improvements are continuous.

Consequently, when LG Electronics India Ltd (part of the global consumer electronics manufacturer LG Electronics) implemented the energy management standard EN 16001 it found savings on its energy bill approaching 22 per cent, in spite of a 32 per cent increase in productivity and in addition to the energy savings it had already made.

Other early adopters of EN 16001 include Morgan Lovell, a leading office interior design and fit out specialist in the UK, which saved head office electricity costs of 30 per cent; and Camil Farr, a global manufacturer of air filtration equipment which reduced gas costs by 35 per cent, electricity by 22 per cent and diesel by 19 per cent.

Similarly, when First Group, a leading transport operator in the UK and North America was certified to the environmental management system ISO 14001, it reduced its energy costs by 31 per cent; it saved £240k through energy reduction initiatives in 2008 alone and in the same year saved £70k through waste minimization.

Sun Life Direct, which handles direct marketing campaigns for 90 per cent of the AXA insurance group adopted PAS 2020 for environmentally responsible direct mailing, and saved £150k per annum on mailing costs by reducing mailing volumes and being able to benefit from Royal Mail’s Responsible Mail scheme in the UK.

Nimlok, a market leading exhibition and display company adopted ISO 14001 and found the certification process to be cost neutral from year one, due to the significant cost savings made on power, materials and waste disposal. Additionally the introduction of recycling and reconfigurable exhibits now saves 95 per cent of materials.

When Earls Court and Olympia, the UK’s premiere exhibition and conference venue providers, adopted BS 8901 for sustainable event management, it reduced waste to landfill by more than 50 per cent and realized significant energy savings from switching to low energy lights and switching them off along with stand power 30 minutes after exhibitions closed for the day.

And cost is just as much a concern in the public sector. When Cambridge City Council adopted ISO 14001, it found a significant reduction in landfill costs from improved recycling and a reduction in fuel use. When Norfolk County Council’s Planning and Transportation Department implemented ISO 14001, it redirected more than half its construction waste from the highways programme away from landfill and into reuse. This resulted in a saving of nearly £1m.

As well as cost savings, organizations which implement sustainability standards see other less-easily quantified benefits. Most cite the advantages of recognition as a sustainable company in their sector. This leads to visibility, enhanced reputation and wider opportunities to do business. In some cases organizations have challenged the culture of their sector and become market leaders for sustainability.

Other organizations are simply reassured that they are and will remain compliant, risk is well managed, and they are in a good position to absorb new legislative requirements.

Universally, organizations find that their staff has a heightened awareness of their environmental and social impacts: how energy and materials are used and consumed and how products and services are produced. This spills into local communities and into the supply chain. It leads to process improvements and efficiencies and perhaps most tangibly of all, it produces people who are motivated by the knowledge of ‘doing the right thing’.

Businesses that signed up to sustainability management should have come through the downturn stronger than those that ignored it and their strategies – showing long-term thinking – will also work just as well in the recovery. Driving sustainability helps companies cut unnecessary costs while simultaneously reducing their impact on the environment. This translates into a stronger reputation, and that feeds right back into the business when it reaches out to new recruits. For businesses it represents hard benefits across the board, and for people it makes working even more rewarding, knowing the positive impact they are having on the environment and society.