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MeterHero Sponsored Series

The ROI of Sustainability

4 Ways to Make Your Sustainability Programs Downsize-Proof

By 3p Contributor

This article is part of a series on “The ROI of Sustainability,” written with the support of MeterHero. MeterHero helps companies and organizations offset their water and energy footprints through consumer engagement. To follow along with the rest of the series, click here.

By McGee Young

These are good times for sustainability initiatives. Cost-saving returns on investment grab the attention of budget hawks. Marketing teams love to tell sustainability stories. CEOs can now hold their heads a bit higher at Davos, COP and Aspen when asked how they are addressing climate change.

But will this boom turn to bust? If so, should you worry about how to defend your sustainability programs the next time costs have to be cut. When the ROI is harder to calculate, when consumers have less discretionary income, when the CEO retires, how do you make the case to continue your good work?

Taking a page from Silicon Valley, sustainability professionals should focus on creating increasing returns with their programs. That is, for each additional unit of input there is a correspondingly larger increase in output or value.

For example, think about social networks. Each additional person who joins the network makes the experience better for everyone else (except maybe your distant relatives who comment on your Facebook posts). In a previous generation, the spread of telephones had a similar effect. Each person who gained access to a telephone made the technology more valuable for existing users.

By focusing on programs that generate increasing returns for your organization, you can buffer sustainability against the inevitable questioning and second-guessing of its ROI.

Here are four tips that can help you sustain your sustainability programs even in the face of downsizing, reorganization and cost-cutting crusades.

1. Integration

Sustainability programs are more durable the more integrated they are into the fundamental production of value in your organization. There is often an inverse relationship between the startup costs of a sustainability initiative and its stickiness. A more fully integrated sustainability program is more difficult to get started, but high up-front costs work to its advantage in the long run. A program that takes years to set up, integrates with software and other systems, and requires more resources to establish is more difficult to cut.

2. Network effects

Most companies design products that work well for a specific customer. But when a company can create an ecosystem, where each additional customer brings value to existing customers, magical growth happens. Remember when Instagram launched? If you were one of the few customers using the early version of Instagram, you would have found it useful – for your own purposes. Once it became a photo-sharing app, each additional user made the experience better for existing users. It’s great to look at your own pictures through sepia tones, but it’s even more fun to look at your friends’ pictures.

Sustainability programs that create network effects survive because the value of the program far exceeds the cost of setting it up. Employee engagement initiatives are the best example of network effects improving sustainability ROI. For example, MeterHero’s water and energy conservation employee engagement programs allow employees to compete against each other to save water and energy at home and earn cash for their savings. The more employees that participate, the more value is created for participants and the more value returned to the company.

3. Learning effects

Look down at your keyboard. Do you know why the keys are arranged the way they are? Because your great-great-aunt learned how to type on this keyboard layout. Once a critical mass of typists learned how to type on the QWERTY keyboard, no further changes were possible. Have you ever tried to type on a European keyboard? It’s impossible not to hunt and peck!

If your sustainability programs create valuable skills by virtue of participation, others will want to participate in your programs to acquire these skills. If these skills are in turn valuable for your company, your program is unlikely to be cut. Does your sustainability program teach water and energy literacy? Can your employees tell you the difference between a CCF and an acre-foot of water? If you can show a difference in the innovation and productivity of sustainability program participants versus others in the company, your program will thrive.

4. Inevitability

Psychology plays an important role in the sustainability of sustainability. People conform their behavior to match the expectations of their environment. If you can build your company identity around sustainability, you’ll have more ammunition to fight against retrenchment. If you are really effective, you’ll help carve a niche for your company as the brand leader for sustainability in its sector.

Today’s consumers are increasingly fickle in their sustainability expectations. While they are passionate about ecological issues, they often make choices based on low-information impressions of corporate behavior rather than measured assessment of sustainability programs. For this reason, the story that you tell is as important as the actions you take. Your customers must be able to take for granted that you are the sustainability leader in your sector. Once you achieve that position, your programs will be more resilient because your customers will demand nothing less.

With climate change appearing to become more dire by the day, and water scarcity a fact of life for most of the world now, sustainability programs should see their status elevated in most companies. But shareholder expectations and pressures to increase profits often pit sustainability against the bottom line. By focusing on programs that provide increasing returns to the company, sustainability professionals can help achieve triple-bottom-line results – profits, planet, and people.

Image credit: Flickr/GotCredit

McGee Young is founder and CEO of MeterHero, a water and energy conservation platform. MeterHero allows companies to fund conservation rebates that consumers earn as they reduce their water and energy consumption.  McGee was a winner of the Midwest Social Innovation Prize, a finalist in the Clean Energy Challenge, and his company was selected for the charter class of startups in the Global Freshwater Seed Accelerator. Prior to MeterHero, McGee founded H2Oscore, while also serving as an Associate Professor of Political Science at Marquette University. He is the author of “Developing Interests: Organizational Change and the Politics of Advocacy.”

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