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The Post-Recessionary Case for Sustainable Business.

3p Contributor | Friday June 18th, 2010 | 0 Comments

By Janine Kubert

“…[T]he goal of sustainability is to increase long-term shareholder and social value, while decreasing industry’s use of materials and reducing negative impacts on the environment.” (Source: EPA)

I was in a meeting with a property management client recently, giving the lead engineer a report on the environmental and financial cost savings we had helped them achieve at each of their facilities. We were reviewing a report with charts showing energy and water usage and costs, waste diversion rates, and greenhouse gases produced and avoided. Here he stopped me. “Greenhouse gases aren’t as important these days,” he said. “Given what happened at Copenhagen and the questions around the science, a lot of people I know think that tracking greenhouse gases is no longer the main point. Maybe you can push those charts to the bottom.”

For someone who has been an advocate of helping businesses reduce their environmental impact, I felt that I had just lost a key leverage point. For years there was an increasing tendency among the sustainability crowd to use the threat of impending climate change legislation as a primary incentive for businesses to take action on environmental initiatives. Had the primary incentives for corporate environmental stewardship shifted in just the past year?

The answer is a resounding “yes”. Although some companies that position themselves as environmental leaders still see sustainability as an opportunity to innovate and differentiate, more companies are issuing sustainability reports and making green claims but not using environmental stewardship as the main filter of which initiatives to pursue. On the tail-end of a recession, now more than ever, the main driver for them when implementing green initiatives is one of cost savings.

Fortunately, sustainability and cost savings often go hand-in-hand. Recent surveys on green building and corporate spending both confirm that for most CEOs and facility managers alike, saving money on energy and other operating expenses is the number one reason why they pursue any so-called “green” initiative.

So, although the triple bottom line is still important, many businesses care more about the reduced financial impacts of any project. They see reduced environmental and social impacts as added benefits.

This has shifted the case for sustainable business. Yes — companies are more motivated to take on projects that help them reduce waste, become more efficient, and save money, rather than those that are just touted as “green”.  But whether you call it operational efficiency or saving the planet, sustainability can produce bottom line savings and help companies get out of the red and into the black.  In fact, this should be the new slogan for the sustainability community if we hope to get businesses to take action: green is the new black.

Sustainability reports should also be reframed as a metrics-driven transparency tool that can help businesses turn green into the new black. By tracking and reporting sustainability metrics, companies increase their cost savings and add credibility to their claims of reduced environmental and social impacts.

Many sustainability reports published today suggest that companies either don’t track or don’t reveal enough in the way of metrics. In a KPMG survey about sustainability reports, readers said corporate sustainability reporters are most likely to omit failures, leading to questions about the credibility of these sustainability reports. Readers generally have a low opinion of internal company and national reporting guidelines. Readers also want to see companies provide direct and useful information about what their sustainability impacts are and what they are doing about these impacts in concrete terms. They suggest that reporters need to provide evidence of how their key sustainability impacts are addressed in operations.

But what about the growing field of carbon accounting? Although many sustainability reports include some sort of carbon footprint, those don’t usually include metrics on water, waste, or procurement because those categories are not required under many reporting schemes. Instead, the data provided by carbon accounting ledgers often only covers onsite fuel, corporate fleets, business travel, energy purchased from utilities, and employee commutes.

Whether or not a company chooses to publish a sustainability report, everyone needs to track all of these metrics to ensure cost savings and reduced environmental impact. Without comprehensive internal reporting on metrics, companies do not have a clear picture of how they are performing over time. They lack the information they need to evaluate and improve their practices. Metrics-driven sustainability is smart business.  And, if a company chooses to publicize their sustainability efforts, their metrics will help to increase transparency for stakeholders and dispel any suspicions of green-washing.

All of this leads to enhanced brand equity, increased customer loyalty and revenues, and operational cost savings, proving again that green is the new black.

***

Janine Kubert is Director of Operations for iReuse, a sustainability consulting and software company founded in 2005 that serves organizations interested in reducing their operational costs and environmental impact. iReuse software and services provide organizations with a clear sustainability roadmap to achieve measured results.


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