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I graduated from Liverpool University with a degree in Geography in 1999, and seeking variety while I decided what I wanted to do long term with my career, I began my management consultancy career at ...

Kirsty Nethersell, Partner

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Sustainable business - time to get serious?

Sustainable business - time to get serious?

Sustainability has moved from the periphery to the heart of business and therefore onto Board agendas and into job titles. The risk to corporate reputations of ignoring it or getting something wrong is high. Sustainability makes good business sense and it is also simply the right thing to do, so here are some strategies for building a more sustainable business…

A must do, not a nice to have

In recent years the issue of sustainability has moved from the periphery to the heart of business and therefore onto Board agendas and into job titles. This shift has happened with good reason: environmental concerns are becoming ever more pressing; customers are demanding companies take action; the risk to corporate reputations of ignoring sustainability or getting it wrong are high and it makes good commercial business sense. It is also simply the right thing to do.

Helping you do it well

So, addressing the sustainability challenge is becoming a must for many organisations, but doing so successfully can be far from straightforward. Here are six factors that will help you build a more sustainable business.

1. Ensure commitment from the top to a clear, well-articulated set of goals. To achieve any kind of significant business change you must have not just senior sponsorship but senior buy-in to a clear, well-articulated set of goals. These should state clearly what you want to achieve, and how ambitious you want to be. Sustainability is a long-term game, not a quick win, and it takes genuine commitment from the top.

2. Adopt a mindset of “sustainable business is good business”. And it’s true. There are many examples: reducing energy usage, waste and water consumption will reduce costs. Equally, driving through efficiencies in your logistics operation will be good for the bottom line as well as reducing your environmental impact. But you can go much further than this, for example by building sustainability into the way you design your products, how you source them, and ultimately how your customers consume them as well. There are opportunities at all stages to be more sustainable and more profitable and it starts with everyone adopting that mindset.

3. Share the benefits. To influence the behaviours of your suppliers, customers and employees, seek out mutually beneficial outcomes. It makes a lot of sense for banks for instance, to shift customers away from paper-based statements – it’s good for the environment and they can save on significant paper, printing and mailing costs. But how do they encourage customers who may well be attached to their paper statements? By sharing some of the cost benefits through for example reduced banking fees or a donation to charity – a mutually beneficial move that is likely to lead to much higher levels of take up than keeping all the upside to yourself.

4. Take a sustainable approach to sustainability. It’s much easier in the short-term to kick off standalone sustainability initiatives than it is to build the approach into your core operations, but taking a long-term view and truly making it an integral part of your business is the right move. This is what leading organisations are doing, whether it is through how they deal with suppliers or how they promote and sell products and services to their customers. In addition, they are increasingly making sustainability part of their future investment decisions and are embedding it into key performance measures. 

5. Measure your performance and progress. You need to track your progress against the goals you have set – the old business adage of you get what you measure is as true for sustainability as it is for anything else. Where possible, make sure the high level goals you have set are broken down to a level that enables business unit leaders and functional heads to sign up to, and be accountable for, their slice of the pie. Use regular reports against the agreed targets to track progress and take action. And be prepared to reset some targets – sustainability is evolving and you need to be ready to flex accordingly.

6. Communicate, communicate, communicate. Sustainability is a long-term game and progress will not be made overnight, so it is vital you bring all the key stakeholders – investors, employees, suppliers and customers – along with you on the journey. Again, regular reports against progress are vital here - helping maintain momentum. But probably more important is to make sure you handle the inevitable issues and problems that will arise in the right way. As with all kinds of significant change, the best approach with sustainability is always one of openness, honesty and transparency.   

Ultimately, the markets will decide to what degree sustainable business is good business. For many organisations, particularly those that take a long-term view, becoming more sustainable makes a great deal of sense. It might not be quick or easy, but if you go about it in the right way long-lasting success can be achieved through developing the capability to deliver both economic and environmental benefits as part of your core operating model.

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Sustainable business - time to get serious? A must do, not a nice to have

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