Switching over to recycled paper, adding solar panels to the roof or increasing philanthropy are all a good start for a company jumping in to the sustainability pool, but they are not going to generate actual progress on climate change or other global issues.
The “bolt-on” just doesn’t cut it as a sustainability strategy anymore.
Chris Laszlo, author of Embedded Sustainability: The Next Big Competitive Advantage (along with Nadya Zhexembayeva), shared a few examples of companies that are doing a great job on embedded sustainability and those that still have work to do in his presentation at Sustainable Brands 11. Laszlo compared Chrysler, which has chosen to make incremental MPG improvements to Nissan with its big hairy audacious goal of an all-electric car. Which one do you perceive to be more sustainable? Which one are you likely to buy stock in? Nissan is demonstrating innovation and leadership in sustainability – something that will quickly transform into financial wins.
It wasn’t very long ago that accomplishments like Chrysler’s would be lauded in blogs like ours. However, the sustainability landscape is crowded enough that incremental change no longer makes the cut.
Creating Value with CSR
Laszlo takes a fresh look at the value chain and lays out three ways that sustainability initiatives build value for the firm:
- Declining Resources-as energy and other inputs get more expensive, it makes financial sense to conserve them.
- Increasing Expectations- customers, investors, regulators and employees expect more (as I mentioned above) and therefore a company has to deliver more in order to remain competitive.
- Radical Transparency, often associated with CSR reporting, puts NGOs, unions, and government officials on the outside looking in with no secrets. A company has to do good things, otherwise their reputation and brand value will quickly suffer.
Notice that 2/3 of those have to do with how your company is perceived by the outside world?
Embedded sustainability represents a tremendous opportunity to build brand value– loyal customers– beyond any incremental financial benefits your company might receive from targeting efficiency projects.
Laszlo has figured out a way to display that value visually:
Embedding CSR, Strategically
Given the nature of the corporation these days, embedded sustainability means a huge increase in brand value over what can be gained from an incremental approach.
As you brainstorm new initiatives for your company, think about where they fit on Laszlo’s chart. The more up and to the right they are, the more opportunity they give your company to make a big win in the court of public opinion which will lead directly to many a return customer.
Share your ideas for big company innovations in the comments- these companies are reading and they might even take some of your ideas!
[Image Credit: ThereIFixedIt]