Don’t mention the “S” word
By Graham Sprigg, CEO of IMS Consulting
Justifying the business case for sustainable development can sometimes be very difficult. For many of the companies I’ve had the privilege to work with over the past 30 years, it’s simply put as the way we do business round here.
Over-thinking the question often gets you nowhere and those organisations who are really, truly successful at embedding sustainability into their brand are the ones who just get on with it and don’t spend too much time analysing or measuring the outcome. Of course, there are plenty of stories of companies adding millions to their bottom line as a result of better sustainable practice.
After the launch of Plan A, M&S announced that their sustainability programme had added £70m to profits – and that was at the height of the recession in 2010/11. (This increased to £135m in 2012/13). And there are other stories of those who are not so savvy. BP’s shares went from $59.50 immediately prior to the Gulf of Mexico oil disaster (in April 2010), to $28.90 by June of that year.
I get mixed reactions from senior company executives when the “S” word is mentioned. While it’s often hard to attribute good (or bad) practice directly to profit or share price, there can be little doubt that the way a company approaches – and communicates - its commitment to sustainable development will have an effect in at least three aspects of their business.
These are: their ability to attract and retain staff (and this is particularly true for young graduates), their resilience to new regulation – turning costs into opportunity (eg the Carbon Reduction Commitment) and brand value – which relies heavily on how sustainable actions or initiatives are communicated. As Peter Drucker, the father of modern business consulting said a long time ago; “Business only has two functions - marketing and innovation. All the rest are costs.”
If we apply this to 2014 it fits very well with the business case for sustainability. Companies who consistently innovate, and tell their stakeholders what they are doing, are more likely to succeed.
One day, perhaps not long from now, the “S” word will no longer be needed in business. Sustainability strategies will simply become business strategies and it’s likely everyone will be a bit better off because of it.
IMS Consulting helps companies turn cost into opportunity, by ensuring that the sustainability of goods and services provides maximum benefit to mankind; with minimum impact on the planet. Visit http://www.imsplc.com to understand more.