The Secret to Green Business Success: YOU, the Consumer.
This is the last of three posts on the Executive Council’s “Value-Based Sustainability” event last week (read previous posts here and here). As official sponsor of the event, CleanTechies raffled off five free tickets to our Facebook fans, Twitter followers (@CleanTechies) and Newsletter subscribers. The author of this article was one of the lucky winners. Fan us and follow us to learn about upcoming raffles like this!
Many companies easily jumped on the ‘green’ bandwagon in 2007 and 2008 when the economy was growing. Now that the U.S. is in a recession, unless sustainability was already a guiding pillar for your company, making the business case for green, clean, and lean initiatives can be challenging. At last week’s Executive Council summit on Value-Based Sustainability: the Business Case for Clean, Green, and Lean, several best-of-breed companies shared their thoughts on sustainability and the role of consumers.
Executives from UPS, IBM, eBay, Coca-Cola and Microsoft along with others all agreed that sustainability is the right thing to do, especially since customers are asking for it.
When Microsoft’s Environmental Sustainability Director, Francois Ajenstat, was asked why Microsoft decided to formally implement an environmental strategy two years ago, he answered that it was because customers kept asking for it.
Adam Werbach, CEO of Saatchi & Saatchi S, called for companies to implement a ‘North Star’ framework, that is: actionable by every employee, core to the business, solves a global human challenge, achievable in 5-15 years, and inspirational. For example, PG&E plans to sell $50 billion worth of sustainable innovation products by 2012.
Beyond differentiating a company, sustainability has an additional benefit: cost savings and employee morale. The low-hanging fruit exists in data center efficiency and recycled printer cartridges. Additionally, most of the companies at the event had a green team or an internal green website where grassroots sustainability and company-wide implementations converge.
But how does one implement and maintain a sustainable strategy? The answer: measure, measure, measure. Also, the executives present said it was essential to be transparent with your data and work with other companies or organizations. While most executives wanted some guidance from the government, they were not going to wait for regulations to implement a global good.
Examples showing that sustainable actions can be profitable were described as part of a five-point framework by Rupert Davis, a sustainability leader at Monta Rosa, where he helps companies build sustainable business cases. The bottom line can be impacted the following ways:
- Profit – Sustainable measures can reduce costs and increase earnings. For example, the Empire State Building renovations included energy efficiencies, which are saving the site $5 million a year with an IRR of 37%.
- Growth – Sustainability can both increase customer value and expand a company’s competencies into a new market. For example, the Toyota Prius had the longest consumer waiting list in U.S. history. Also, Clorox found new customer value by promoting products with less toxins.
- Regulations – If companies are already sustainable, then regulations will provide them with a competitive advantage.
- Risk Management – In some cases, sustainability can manage risk exposure. For example, Walmart has required a sustainability scorecard for its suppliers. If suppliers does not score highly, they will not be selected.
- Image – If you do good, you look good, and you sell more. For example, Unilever had a campaign to help educate children in India on the importance of washing their hands to prevent diarrhea. The result of that effort was a decrease in diarrhea in India as well as an increase in Unilever stocks.
Even in these tough times, the green business case is not only viable but can have a positive impact on the bottom line. Companies just need to align with what their customers want and be transparent about it.
Tamara Becher is an award-winning process and project manager in the Bay Area transitioning into the CleanTech field. Most recently with Johnson & Johnson, Tamara is learning how to make the most impact for Clean Technology utilizing, among other things, engineering, project management, process excellence, and corporate effectiveness skills.
photo: Vermin Inc
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