The role of business beyond sustainability

Synopsis:
The important distinction lies not between conventional business and sustainable business. It lies between average companies and great companies. We need companies that address the challenges of our planetary boundaries, but not as an activity parallel to their business model. It has to be an integral part of their raison d’être. These companies also have the possibility of becoming great; and, great companies can change the world.

Presenter:
Johan Ununger, Saltå Kvarn AB, Sweden

  • Former environmentalist
  • Managing director of successful organic food company
  • 15 years experience as a consultant
  • PhD in biology and an exam in Marketing Management

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One Response to The role of business beyond sustainability

  1. Sustainability – a new business paradigm

    In companies, it is common that major barriers to internal collaboration is functional areas do not understand their impact on others.

    Companies that can bridge that gap – using an embedded sustainability strategy aligned to the core business strategy, and business processes – will have an edge in creating a competitive value chain capable of fulfilling business strategy requirements.

    It follows, improving service and responding to new customer expectations, requires better information. Keeping better track of costs can inform and support interpersonal, cross-functional discussions – helping companies better prepare for uncertainties that lie ahead.

    By considering investment in understanding better how assets and resources are used, and applying the metrics forward, companies can position themselves for greater flexibility in the future.

    As environmental concerns become a much more significant issue for companies – and their supply chains – in the years ahead; taking action now into sustainability planning and implementation will create differentiation in terms of lowering organisational cost, creating superior market place attractiveness and deliver rising levels of customer service through improved team cohesion (see: Sustainability and being a trusted supplier – C M Gleadle).

    Additionally, given that up to sixty percent of a company’s carbon and environmental footprint – and therefore risk – can reside upstream in the supply chain; it would be prudent to pursue economically attractive opportunities which address environmental impact in the near term to prepare robust responses very quickly to the increasing shifts in environmental expectations and requirements of customers.

    The shift to a low-carbon economy is increasingly gaining traction and is a topic of importance to all senior managers – whether a large corporate or an SME.

    Science states that carbon output needs to fall to levels of up to ninety percent below 1990 levels by 2050 in order to restrict global warming below two degrees centigrade (Fourth assessment report (2007) of the Intergovernmental Panel on Climate Change – IPCC). In order to gain sustained economic growth within the boundaries of business as usual, carbon productivity – measure against GDP per unit of greenhouse emissions – would have to show an increase between five and seven percent. Contrast this against historical carbon growth of one percent when carbon emissions were not deemed to be an issue.

    Therefore, economic growth must be de-coupled from emission growth (see: The value of sustainability in business – CM Gleadle)

    What we have to see going forward is investment in low-carbon technologies to dramatically reduce energy consumption and greenhouse gas emissions; and, a company wide sustainability strategy, which holistically links organisational processes to the new technologies.

    As customer expectations shift to reducing the risk of environmental and social exposure of their supply chain, executives are going to have to fundamentally review the way they look at their business to remain vital.

    Companies need to optimise the carbon efficiency of their existing assets, products and services, and their supply chains. They need to look at new forms of low-carbon energy supply whilst also investing in new low-carbon technologies. Such strategies will – and are – rewarding companies that deliver more efficient products and services supporting the efficiency and exposure of their customers.

    Notwithstanding new customer and market expectation acting as economical drivers, governmental policy and constantly rising energy costs make this move to sustainability an imperative.

    There are many profitable opportunities to save money and cut energy consumption and greenhouse gas emissions. The Carbon Trust estimates that the UKs four million SMEs could collectively save £1.37bn a year. (See Climate Change: The great business opportunity – CM Gleadle)

    There will of course inevitably be winners and losers. The losers will be those companies that do not embrace sustainability.

    Winners will be those companies who not only have the insight into new low-carbon technologies, but also orchestrate the creation of low-carbon value chains by embedding sustainability in to the DNA of their operational processes. Additionally, winners are effectively communicating and engaging with both public and private stakeholder groups; demonstrating and proving their environmental and socially efficient solutions are economically attractive. Hence, they deliver greater value and lower risk: making themselves more attractive to both the market place and investors.
    C M Gleadle

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