profitable sustainability

Profitable Sustainability: Oxymoron or New Opportunity?

Many commentators believe that sustainability harms profitability; we have found the opposite to be true — good sustainability programs add significantly to profits.

This is because many of today’s business challenges relate to society and the environment. These include resource scarcity/security and resulting commodity price escalation, game-changing new cleaner technologies, disruptive resource-efficient business models and increasing corporate responsibility expectations.

A well-designed sustainability program addresses these challenges and unlocks value through cost reduction, new product innovation, brand enhancement, improving licence to operate, risk reduction, increasing security of supply, lifting employee engagement and raising barriers for competitors.

Examples

Marks and Spencer’s Plan A sustainability program contributed £135M p.a. to its bottom line in 2012.

Interface has lifted its profit margins and retained its leading market share of the global carpet tile market while moving to 100% renewable energy and reducing its greenhouse gas emissions by 90% in Europe.

Similar profitable sustainability examples include Unilever, Toyota, Du Pont, GE, Body Shop, Ecover, Patagonia, IKEA, Henkel and P&G. Would these global market leaders have continued to drive sustainability if it was not adding value for them?

In over 50 projects completed by our team members (many of which are on the Our Experience page) we have helped companies to increase profits while improving environmental and social impact.

Key areas in which we find substantial value include:

• Non-labour resource efficiency (including energy efficiency, transport efficiency, packaging optimisation and waste reduction)
• Remanufacturing, recycling and reuse
• New business models
• Cleantech

Further detail on the value available from sustainability and how to access it can be found in our viewpoint “Unlocking New Value in a Changing World”.

How to Unlock Value through Sustainability

The key to profitable sustainability is the design of a coherent, comprehensive sustainability program – addressing key issues, putting necessary enablers in place and engaging the right stakeholders. Poorly designed programs which reach beyond a company’s core business can drain profitability. Perhaps it is such inappropriate sustainability strategies that commentators are referring to with their declarations that sustainability does not add value.

So how can a company begin/continue to drive profits through a sustainability program? Here are the six most common types of projects that we undertake for companies, which may trigger ideas for how you could accelerate profitable sustainability within your organisation:

Business Case for Action: We rapidly demonstrate the untapped sustainability value and what it would take to unlock it, using a rigorous fact-based business case to show the economic attractiveness of acting.

Quick Sustainable Wins: For companies under economic pressure and uncertain about committing to long term sustainability programs with stretch targets, we help capture low-risk, profitable opportunities that pay back within one or two years. Such initiatives also can act as a pilot to prove the business case for and determine the internal appetite for a larger profitable sustainability strategy.

Profitable Sustainability Strategies: We help companies to develop effective and practical sustainability strategies that increase profits while improving brand value, lifting customer and community support, and reducing environmental impacts. Please refer to our paper “Sustainability: the HOW” for more detail on how we do this.

Sustainability Integration: We assist companies to integrate their sustainability strategies into core business strategy and culture.

Specific Opportunity Capture: Often clients recognise that they have profit and sustainability improvement potential in one particular area – such as remanufacturing, energy efficiency, waste reduction, light-weighting/packaging reduction, transport efficiency or new sustainable product development. We assist to quantify the size of the opportunity, build the business case and design and implement programs to capture the additional profits.

Cleantech Due Diligence, Growth- and Turnaround Strategies: Using our depth of knowledge in most cleantech sub-sectors, we assist companies with buy- or sell-side due diligence, providing an experienced commercial perspective. We also have a track record of developing successful growth and turnaround strategies for cleantech businesses.

Feel free to contact us; we welcome the opportunity to discuss how sustainability can increase your profits.