PE INTERNATIONAL – Business Value from Operating Sustainably

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Courtesy of thinkstep

Sustainability is often seen as a woolly concept that has no place in the boardroom. At PE INTERNATIONAL, we don’t believe that is true.

It is becoming ever more evident that there is tangible business value to be unlocked from looking at your company’s operations through a sustainability lens. And despite what the naysayers would have you believe, it is possible to quantify the benefits of sustainability in the same way as many traditional business activities.

More and more companies are realizing and communicating the business value of their sustainability efforts. Examples include: BASF’s sales of €6.7bn from ‘climate protection products’ in 2013[1]; Johnson & Johnson generating $8bn from Earthwards® products[2]; Wal-Mart saving hundreds of millions from its bottom line through sustainability initiatives; and many more.[3]

Further, companies are applying quantification to the costs of inaction and environmental impacts, as Unilever did in 2012 when it estimated that natural disasters cost the company €200 million in 2011. Metrics such as these help to align sustainability priorities with business decision making.

Too often companies are continuing to make both business and sustainability decisions without sufficiently considering their contributions to one another. A valuable starting point is to consider the four buckets of PE’s Business Value of Sustainability Framework™ – revenue growth; cost cutting; brand enhancement; and risk mitigation – and determine how one’s sustainable business priorities are contributing to these. Further, this exercise often uncovers key success factors in being able to realize the full business value potential.

To support companies in addressing this missing link to internal engagement and improved decision making, PE INTERNATIONAL has developed the Business Value of Sustainability System™. The core of that is a four stage process which can be applied at a high level by anyone.

The first step is to focus – identifying the sustainable business activities that are providing value to your organization, such as the use of environmental product declarations (EPDs), new software tools or an employee engagement programme.

The next step is to screen – make use of the generic existing knowledge, expertise and benchmark data to highlight where and to what extent sustainability is contributing to business value.

After that, one should scope the findings based on company specific information by engaging internal knowledge sources and seeking out the ‘best available information’.

By considering the sources of business value and how much sustainability contributes to them, you can make better decisions about how to allocate resources. In the final part of the process, one scales the sustainable business practice to realize the business value and additional value across the organization.

One of the keys to getting people to take sustainability seriously is to translate the sustainability issues that are important to your business into the language of traditional business – in other words, the chief sustainability officer has to start talking the language of the chief financial officer.

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