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Into the New Millennium – Is Your Business Strategy Sustainable?

By: Susan Graff and Laura Dawood

What is sustainability?
The World Commission on Environment and Development (also known as the Bruntland Commission) defines sustainable development as "development that meets the needs of the present without compromising the ability of future generations to meet their own needs." Sustainable businesses recognize that finite natural resources are available to a rapidly increasing global population…5 billion people today, expected to reach 8 billion by the year 2050. As limited resources- water, fossil fuels, clean air, arable lands - become scarce and degraded by human activity, creative solutions, from the amazingly simple to high technology, are evolving. And the result can be improvement in both financial and environmental performance. One example from a recent Aspen Institute report…Anheuser-Busch developed a can that’s 33% lighter, and the company’s overall recycling plan saves $200 million/year.
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What’s a Sustainable Business Strategy?
Simply put, a strategy that replaces linear manufacturing with cyclical processes that mimic nature. Businesses produce more value with less "stuff"...less raw materials, energy and environmental pollutants. And the bottom line is they save money. Ray Anderson, CEO of Interface, Inc., a multinational producer of commercial interior products with more than $1 billion in sales, says his company has saved $67 million over a period of 3½ years by implementing an employee program aimed at eliminating waste. Business leaders can be found around the world in manufacturing and service industries that are addressing environmental sustainability with environmental policies, environmental management systems, and pollution prevention techniques.


The growing list includes other big and small, domestic and international… Ford Motor, Monsanto, Boeing, Skanska, Ikea, Olland, and Companie Oleaginosa Uruguay SA.
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How does a Company Get Started?
Sustainable businesses influence and partner with their major stakeholders – employees, vendors, suppliers, customers, stockholders. With strong senior management commitment to culture change (we’re talking the magnitude of an "epiphany"), sustainable businesses typically develop employee-driven quality systems that meet their immediate customer’s needs with products and services that are "in step" with broader ecological, economic, and societal needs. This takes a good deal of two-way communication….often starting with an environmental awareness raising event. It’s important these events engage the target audience at a personal level and present a compelling business case for culture change. Participants will then make decisions to commit themselves to action based on their own belief systems as well as company goals. We recently assisted Beers Construction, a Skanska USA Company, develop and roll out an environmental awareness program with astounding results…the Company expects to recoup approximately $600,000 the first year based on the program’s success and employees’ commitment to EMS implementation.
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Why a Sustainable Business Strategy?
Opposite the epiphany, a more tragic reason sustainable development strategies are developed is in response to an environmental/liability crisis. For example, the Exxon Valdez oil spill off the coast of Alaska sparked the development of enhanced emergency management procedures, a fundamental element of an environmental management system that attempts to meet ISO 14000 "prevention of pollution" standards.

In California, rapid population explosion, urban expansion, loss of open space and farmland, landfill shortages, severe traffic, increasing pollution, and lack of affordable housing triggered the Community Environmental Council to integrate sustainability into state planning since 1991.

In Atlanta, Georgia, similar environmental problems, including poor air quality and traffic congestion, deteriorate the quality of life and have caused some businesses to locate elsewhere. Business leaders are taking action…the Metro Atlanta Chamber of Commerce recently completed an initiative calling for enhanced environmental awareness and aspirations-based strategic planning to stir action on vital environmental quality issues.

Sustainable business strategies also emerge from anticipating future trends. Many experts predict that the next wave of environmental legislation will be limits on natural resource consumption. There is an evolving global movement for environmental protection in legislation, agencies, and private institutions, ie. Agenda 21, United Nations Environment Program, and the World Business Council for Sustainable Development. In Europe and South America, sustainable organizations have been increasing and their environmental regulations already promote sustainable business. Europe’s environmental protection laws increase the demand for international sustainable strategies. The European Union requires member countries to adhere to the Eco-Management and Audit Scheme (EMAS), an environmental management system. One example of a sustainable business strategy for manufacturers are extended product responsibility programs…these enable consumers or supply chain purchasers to return old equipment for recycling, reuse or remanufacture when they purchase new equipment. Has it ever bothered you to throw an old cell phone or appliance in the trash? These "take-back" programs are now in place for diverse industries, ranging from car parts to computers.

Cultivating Success
The success of sustainable strategies can be measured in the savings of raw materials and money. For example, when polymers are substituted for steel in automobiles and concrete in the construction industry, there are big savings in materials (European Commission 1992). The EC also found that new designs in products and services require 10% to 20% of the amount of raw materials currently required. Savings in natural resources and raw materials equal financial savings. The wave of voluntary and regulatory conformance to strict environmental standards can also be seen in the environmental charter signed by nine European manufacturers of PVC in Germany, France, the Netherlands, and Belgium - virtually all the major producers in western Europe - which aims to reduce emissions of toxic vinyl chloride monomer in their processes (ENDS 1999).

"We have not inherited the Earth from our parents, we have borrowed it from our children"

Communities and businesses are applying sustainable practices more commonly. However, the blueprint for success is not generic. Similar companies and industries have common challenges. By forming associations within sectors, technology transfer and dialog increases the net benefit achieved by communities. The E7 international electricity utility group demonstrates sharing information is beneficial. Members of the E7 include Southern California Edison, Tokyo Electric Power Company, Eléctricité de France, ENEL Societa per Azioni, Hydro-Québec, Kansai Electric Power, Ontario Hydro, and RWE Energie AG of Essen. E7 develops and promotes international sustainable operations for electricity utilities. The E7 maintains goals of reducing environmental impacts; maximizing efficiency in production, transmission, distribution, and end use; maximizing renewable energies as a primary energy source; and finding new applications for electricity. The E7 Network of Expertise for the Global Environment acts as a pro-bono environmental, technical and industrial advisory group for electric utilities and governments by providing gratis services for more than thirty projects in Asia, Latin America, Africa, and Eastern Europe countries. Skill seminars, training, environmental impact assessments, environmental auditing, and ISO 14000 workshops address critical needs.

Sustainable business strategies are being implemented in a host of industries ranging from electricity to carpet manufacturing to automobiles to airplanes. The application of sustainable practices is spreading in the US and globally. According to the experts, we have a ways to go in the US… a completely sustainable community with comprehensive and long-term environmental, social, and economic health and stability currently does not exist. For businesses to meet their current needs without compromising the ability of future generations to do so, the time to begin is now. At the onset of the 21st Century, a competitive business will adapt to meet the changing needs of consumers for years to come.
 
References:
  • Anderson, Ray C. Mid-Course Correction - Toward a Sustainable Enterprise: The Interface Model, 1998
  • Aspen Institute. 1998. Uncovering Value: Integrating Environmental and Financial Performance. The Aspen Institute: United States. http://www.aspeninst.org
  • Dominski, A., J. Clark, and J. Fox. 1992. Building the Sustainable City. Ed. J. Melcher. Community Environmental Council, Inc.
  • European Commission for the Fifth Programme of Policy and Action in Relation to the Environment and Sustainable Development "Towards Sustainability". 1992. Directorate General XI. http://europa.eu.int/comm/dg11/intro_en.htm
  • European PVC firms sign environmental charter. ENDS Daily. 09/02/99. http://www.ends.co.uk/envdaily
  • Lachman, B. 1997. Linking Sustainable Community Activities to Pollution Prevention: A Sourcebook. Santa Monica, CA: RAND. http://www.rand.org/publications/MR/MR855 .
  • World Commission on Environment and Development. 1987. Our Common Future. Oxford Press.
 
 
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