The Sustainable Revolution - 18 November 2009

As world leaders prepare for the United Nations Climate Change Conference (COP15) taking place the week after next in Copenhagen, business leaders should also be preparing their businesses’ sustainability strategies.

Last week’s Criticaleye Discussion Group on sustainability, held at BRE’s Innovation Park, highlighted that companies which can adapt to the changing world will gain competitive advantage. Richard Gillies, Director of Plan A & Sustainable Business, Marks & Spencer says: "We have had agricultural, industrial and IT revolutions - all have made enormous changes to business and the way we live our lives. The next twenty years will see unprecedented global change as the 'sustainability revolution' touches everything we do. Just as in previous revolutions, opportunities will be huge for those who anticipate, innovate and create change - for others it will see the rapid decline and/or obsolescence of their businesses."

Peter Bonfield, CEO, BRE adds: "There is a new age dawning for sustainability. For too long its been perceived as a marginal, philanthropic activity sitting outside the mainstream business activity. New data from BRE and others clearly demonstrates that sustainability is the key to delivering business growth and profit. For the enlightened few sustainability has become a prerequisite to commercial success. Once this realisation filters through the rest of the commercial world we’ll see a step change in reducing our CO2 emissions and other negative impacts."

In the future it's clear that consumers will opt for organisations that provide sustainable products and robust CSR plans.Martyn Fisher, Managing Director, ELGA Process Water, Veolia Water Solutions & Technologies says: “Organisations who have invested considerable time, thought and effort into developing a wide-ranging sustainability programme are not only benefiting from improved financial results but they have gained much more in terms of market reputation and competitive position. In short, they have become organisations of choice for both consumers and employees - an enviable position for any business or organisation.

“Environmental 'quick wins' are commendable but the strength of an organisation's sustainability programme will be judged on the willingness and culture of the management and employees to effect radical change which deliver permanent solutions, rather than moving problems from one organisation or continent to another.”

But sustainability is such a large issue, defining it, let alone implementing a viable strategy that engages consumers, is very complicated. Ian Ryder, Deputy CEO, BCS, The Chartered Institute for IT says: "Sustainability is a big subject, and it is already starting to become a bit like that comfy old sweater...something everybody has to have to keep feeling warm! This is not to downplay the importance of a sustainability strategy and processes within organisations, of course, and not applicable just to manufacturing, but as a component of the wider scope of CSR, it won't necessarily earn you more customers. What we need to understand, however, is that lack of such a strategy could lose you customers. So, both social and environmental policies will become a required element of all CSR strategies - the sustainability of our businesses will depend on that."

Although companies are embracing sustainability, indeed, there has been a clear increase in board appointments of individuals with experience and credentials in this field, it can be hard to bring consumers along for the ride. Peter Lacy, Sustainability Practice Lead—Europe, Africa and Latin America, Accenture explains: “Although, we have seen a rise in consumer concern - especially from Generation X and Y – beyond the niches, consumers are still driven predominantly by traditional factors such as price, quality and availability and generally are unwilling to pay premium prices for sustainable products and services.

“But sustainability is increasingly becoming a tiebreaker - all other things being equal- even in mainstream markets. In our 2009 Climate Change Observatory Consumer Survey, 24 per cent of consumers reported switching to a new product provider over the past year to benefit from a sustainability proposition. Fifty-three per cent would consider switching; this is a big change for consumers – particularly given we are in a downturn - and probably is the sign of things to come.”

It is believed that the government will soon be implementing sustainability legislation and when this happens it will fall on companies to provide these products. John Cromack, Vice President of Sourcing, Supply Chain and Facilities, Orange says: “Currently environmental and social activities are the focus of our sustainability initiatives. External pressure (green taxes, local government recycling drives, fuel costs etc) means consumers will be looking to us to help them meet these demands not just through the phone and video conferencing but using smart metering, fuel consumption optimisation apps, reminders when to recycle etc.”

Matt Sexton, Director of Corporate Social Responsibility, B&Q adds: "Anyone who looks at the demands we are making of our natural environment will realise that sustainable consumption and long term business health are inextricably linked. We believe that it is possible to maintain economic growth whilst only consuming resources at the rate at which they can be replenished but this will require massive changes in the way that we all live and work. Our job as a retailer is to help customers make this transition straightforward and affordable, which is a great challenge to have."

Social sustainability, defined as creating a better quality of life for the world’s population, is becoming increasingly important and organisations are now factoring this into their CSR plans. John Cromack continues: “Social considerations have always been important to us - a telecommunications company like ours takes inclusion and accessibility very seriously and there are no plans to pay less attention to that in the future. Our consumers are a diverse group of individuals and we try to provide services and products that make communication easy and accessible for all.”

For more information on some of the issues raised in this week's Community Update please see Engaging Consumers to Reduce Energy Consumption, a Write-up from a recent Criticaleye Discussion Group. Also see,Mind The Gap: An Assessement of Existing CSR Indices, the summary of a longer piece by BRE.

I hope to see you soon.

Matthew