How my business can help the environment
Read time: 7 minutes
When Bob Willard, founder and CEO of The Sustainability Advantage, started talking to business leaders about environmental sustainability more than 20 years ago, the concept was still fairly new, and seen as ‘the right thing to do’ rather than a critical component of a successful business strategy.
Today, environmental sustainability is seen increasingly as integral to any business plan and just as important as other measures, such as profitability, return on investment and shareholder value.
You don’t need to sacrifice profitability
Willard, who spent 34 years with IBM Canada, the last 10 years in charge of leadership and management training, says it’s normal to want your environmental sustainability efforts to also have a positive bottom-line impact.
“There’s a significant amount of evidence out there that companies that undertake improving their environmental and social performance don’t seem to be suffering, either on the stock markets or on their financial statements,” says Willard in an interview from his home in Whitby, ON.
Employees may be more productive; they may be more engaged. They may be more excited because they’re working for a company that cares about the same things they do, that gives them an opportunity to use the company as an agent for change.
He says that most business owners want to improve their profits, but not at the expense of the environment. By the same token, they don’t want to sacrifice profitability, while improving their environmental performance.
“As you’re undertaking a particular project that’s going to move you in the right direction on environmental or social issues, it’s important that you’re able to cost-justify that project the way any project would be cost-justified.”
How to start your sustainability efforts
So how can companies get started on the road to environmental sustainability?
Willard says companies should start by “saving money on the four low-hanging fruit of a company’s operations: the energy, the water, the material and the waste.” Of those four, the ones that normally get most of the attention are energy and waste.
“You do a base-line assessment on how you’re doing on all these things right now. In some cases, you may already have taken advantage of energy efficiencies, waste and material efficiencies and so on.”
“Then decide on which two or three you might want to invest more time and effort and money into doing better and build a business case for those projects.”
“Also step back and ask yourself, which of these sustainability projects do I not only care about as a business leader, but do my stakeholders care about?”
Environmental efforts can boost revenues and morale
Sustainability initiatives can lower your operational costs, but they also have the potential to increase your revenues.
“Your reputation as a company that cares about the environment may attract or retain customers,” Willard says. “Or you may start to produce goods and services in demand because they’re healthier, have lower carbon, or they have attributes that people are starting to look for more these days than they used to.”
He adds that there is a similar dynamic with employee morale and engagement.
“Employees may be more productive; they may be more engaged,” he says. “They may be more excited because they’re working for a company that cares about the same things they do, that gives them an opportunity to use the company as an agent for change.”
Willard said employee engagement may be hard to measure, but it can make a big difference to a company’s bottom line, especially when it comes to attracting talent to the organization.
“Top talent, they have choices. They can move around a little bit more easily than others. And they are not shy these days about looking for companies that have values that resonate with their personal values.”
In fact, Willard says employee engagement or ‘buy-in’ is the “secret sauce” that helps make environmental sustainability a paying proposition for many companies.
Sustainability reduces risk
Unsustainable companies are subjecting their stakeholders to higher risk.
That higher risk could include fines and lawsuits due to environmental spills and emissions, reputational damage, loss of market share and difficulty in attracting and retaining staff due to poor environmental performance.
“The research I’ve done over the last 20 years shows that if a company were simply to implement the best practices in environmental sustainability, they could make 50 to 80% more profit,” Willard says. “And if they can avoid the risk part, which is an erosion of their profit by 16 to 36%,” the financial payback could be even higher, he adds.
Willard says those profit improvement projections are “very conservative, low-ball numbers’’ and that he was “extremely comfortable’’ using them.
Aim for net positivity
“It’s called being net positive, where you help to be restorative on environmental issues or where you build a more resilient community. And investing in community makes you a better corporate citizen and earns you your social licence to operate.”
Willard, who began his career as a teacher, said social licence to operate is critically important for any business nowadays and practising environmental sustainability is a big part of obtaining that social licence.
“Now, as we get into more of this legitimization of having a social purpose to your organization, a social licence to operate is really, really important.”
Measure your efforts
How can you know if your environmental sustainability plan is achievable and more importantly whether it’s achieving a scientifically measurable goal?
Most businesses will want to start by measuring their current emissions and setting up a system to track them. This will give your company a chance to assess how it’s doing this year compared to last year and how it’s working towards goals it has set for itself.
Increasingly, those goals are being set, not by the business itself, but by the scientific community.
“We’re getting better at being able to articulate what those sustainability-related goals are, not only for large companies, but for some small and medium-sized companies. The Sustainability Advantage website has free, open-source tools that help small and medium-sized enterprises assess themselves as well.”