Let’s say you’re a progressive company dedicated to sustainability principles. Suddenly, your company hits a rough spot financially. Of course, you feel the pressure to not disappoint shareholders. Conventional wisdom says, “Lean your business by any measure to get profits back up.” What do you do? Ditch the green to make more green?
Marks & Spencer, a British Retailer of clothes and home furnishings, is facing such a predicament. In this week’s HBRGreen, Sir Stuart Rose (CEO of M&S), discusses why they have decided to stay the course in their endeavors to become carbon neutral and send no waste to to landfills by 2012. What are their reasons to doing so?
M&S has received a lot of public attention for Plan A, a comprehensive corporate strategy towards sustainable business practices started last year. The plan includes “five pillars” of focus: climate change, waste, sustainable raw materials, health, and being a “fair partner.” M&S works closely with NGOs to help monitor the program and was recently awarded the World Environment Center gold medal. They have already seen progress from various initiatives – from recycling clothes hangers, reducing packaging, and encouraging reusable bags – that have saved energy and landfill waste.
Although M&S anticipates that full implementation could cost upwards of 200 million sterling over the next five years, their primary reason for continuing with Plan A is because of consumer demand and reputation.
“A 2007 M&S customer survey said that 75% of British consumers are interested in green issues. Last November, in a survey which scored M&S with the best reputation in British business, the Confederation of British Industry concluded that customers will pay a premium for a great reputation, and that, as far as M&S is concerned, Plan A is already contributing positively to our wider standing,” says Sir Rose.
Like all corporate greening measures, M&S has also learned that some initiatives work better than others. They’ve decided to ditch wind turbines on the roof of their first eco-store, for example, because of insufficient power generation. If anything, they’ve learned that “symbolic” is not always “economic.”
In the sustainability game, you’ve got to be strategic about where to devote resources for maximum efficiency. This might not always win you headlines, but if it makes your company more financially sustainable, then you can maximize your overall approach.