Adopting Sustainability to Drive Business: How to Create a Sustainable Business
the activities and processes that small to medium businesses should concentrate resources and effort to create a stronger business.
In the first article in this series I opened by saying, “Sustainability is really just about being a better business. It is about using less, reducing waste, becoming more efficient, and thinking longer term.
I’ll add to that description here by saying that sustainability is about listening first, then responding to what you hear.
- Listening to what stakeholders are saying – either directly to you, in the media, or in their own disclosures.
- Listen to regulators. They might not be regulating you (yet) but they are setting the policy frameworks that industry as a whole will be working under.
- Listening to nature. Understanding that our environment is increasingly stressed and fraught.
- Listening to society. Everyone is a potential customer. What are their problems, what do they need and what are they asking from the products and services they buy.
- Listening to employees. Engaging with employees, hearing their concerns, understanding what motivates them, and responding to it.
I introduced this model previously:
Figure 1. The Sustainable Business System
The elements highlighted in yellow are processes. They provide the link between a need (the push factors) and the desired outcome (the pull factors). The links are the projects that connect the plan and create the results.
Implementing sustainability strategy
An effective sustainability strategy should as a minimum implement projects to address these four elements. Here are some ideas that would be applicable to small and medium sized businesses.
DEFRA estimate that “2% of UK business profits per year may be lost through inefficient use of resources. UK businesses could save around £23bn per year by making simple changes”.
Some efficiency related savings require capital investment. Many do not. Now is the best time to get started with a new efficiency program, or to expand your existing programs:
Step 1: Collect consumption data from across the business
Step 2: Identify opportunities for efficiency and set target reductions. Wherever possible use behavioral change and education to achieve low or negative cost efficiencies.
Step 3: Track performance against targets and regularly communicate progress Undertake to continuously update and re-run the process, digging deeper for opportunities through every iteration.
There are many useful reference documents available on this website and the internet to support efficiency improvements.
Transparency in your small business
Transparency is all about free and open disclosure. It’s sensible as well. If you are doing good stuff, and planning good stuff (setting targets, vision, objectives, etc.), then you should be telling people about it.
Larger companies may be obligated to disclose certain aspects of performance. Many companies big and small choose to disclosure their performance and improvement targets voluntarily.
It is critical that you are confident about the accuracy of any information or data you do disclose. Transparency relates not only to the disclosure of information, but to the integrity of the systems and processes in place to collect the data and do the analysis necessary to create the information.
Today’s brightest and best people need to be motivated, inspired, engaged and satisfied to maximize the value they create for the business, and to encourage innovation, creativity, and operational excellence. Employees can be the driving force, and also the catalyst for improved sustainability performance.
The UK Sunday Times ‘Best 100 Companies to work for’ use the following criteria for their survey. It would be worthwhile for any business to consider how they would fare against this criteria:
- Leadership: How employees feel about the head of the company and its senior managers
- Wellbeing: How staff feel about the stress, pressure and the balance between their work and home duties
- Giving something back: How much companies are thought by their staff to put back into society generally and the local community
- Personal growth: To what extent staff feel they are stretched and challenged by their job
- My manager: How staff feel towards their immediate boss and day-to-day managers
- My company: Feelings about the company people work for as opposed to the people they work with
- My team: How staff feel about their immediate colleagues
- Fair deal: How happy the workforce is with their pay and benefits
Not all aspects of corporate governance will be relevant to every organization. In deciding what is in, and what is out, the business should apply materiality to determine the most relevant aspects and ensure that they are implemented, communicated and adhered to. Examples of good corporate governance for sustainability include:
- Dedicated responsibility assigned for strategy related to environmental, economic and social topics
- Documented and communicated policies and procedures relating to responsible environmental and corporate behaviors
- Documented and communicated codes of conduct
- Employment equity and diversity policies
- Grievance procedures
The Global Reporting Initiative (GRI) provides good guidance on governance for sustainability. The latest guidelines (G4) due in April/May 2013 provide guidance on how to apply materiality for sustainability governance and disclosure. This approach makes them as applicable for use as a best practice guide for very large businesses as they do for small and medium sustainable businesses.
Simon Humphrey is the UK Managing Director for Impact Sustainability www.impactsustainability.co.uk. Impact sustainability provide sustainability performance management software. Note: All images and diagrams included in this document were designed and created by Simon Humphrey.