One of the people I follow in the field of sustainability is Gareth Kane. This blog is adapted from one of his posts.
Like Gareth, we have spent a significant amount of time and energy in persuading clients to think of “sustainability for profit” rather than “sustainability or profit”. The best way that people start understanding this mindset change is by considering the impacts of cost savings and the improved bottom line. Increasingly however this focus is shifting to the benefits that having a good sustainability record can have in attracting customers. Ultimately the alignment of sustainability and profit arises when the company’s business model aligns completely with sustainability, creating a win win for both business and the environment.
He states that probably the highest profile example of this is the Ecomagination programme at General Electric. It was started in 2005 by GE to identify and develop business opportunities in green technology. According to GE, Ecomagination has generated more than $160bn in revenue since then. This year, the company announced a further $10bn in investment for the period 2015-2020 taking the overall investment to $25bn. CEO Jeff Immelt says “Sustainability is our business strategy. It’s our roadmap for how we operate & innovate.” A multiplier of 16 times on ones investment is not bad in anyone’s book!
Obviously GE is in the energy business but what about other sectors? An off the wall example is commercial fabric producer Camira who also sees sustainability as the engine of growth in their business, using this to find new business opportunities to exploit. The company took used coffee sacks from Starbucks and blended the fibres into a fabric for seats in Starbucks stores – creating a product with a great story behind it. Great marketing, great vision and improved profitability!
Here are three main strategies to align your business around sustainability:
- Identify the overlap between your business purpose and sustainability and designating that as the key growth sector in your business strategy (the low carbon economy is here to stay);
- Identifying and commercialising untapped business opportunities in this unique space.
- Getting rid of ‘unsustainable’ elements in your business portfolio. This not only removes the scope for accusations of greenwash, it is also ‘creative destruction’ – continually challeng your business to find new ventures which are profitable and sustainable.
The above approach is not necessarily easy and will not always have application across all industries. Generally however, with forward thinking and innovation, opportunity knocks. The key is to make your strategy a win-win-win – good for you, good for your customer and good for the planet.
Author: Tim James