The sustainability megatrend
Thanks to David Lubin, senior advisor of Esty Environmental Partners and Chairman of Sustainability Innovators Working Group for a great webinar and article in Harvard Business Review on "The Sustainability Imperative."
This is a particularly relevant topic to me since my employer, Bord na M?na, is at the forefront of the sustainability movement thanks to a forward-thinking management team.
As a matter of fact, we have just changed our name in the U.S. to Anua, the Gaelic word for renewal, as we strive to provide clean air and clean water solutions in a sustainable way.
In the long-term, no organization will be successful ignoring sustainability. Climate change alone will force changes and compel a response.
Most forward-thinking leaders see sustainability as an opportunity for innovation that can create profitable growth.
The key lies in recognizing that sustainability is a megatrend, like the IT revolution, that is changing the way business is done and how life is lived.
Fueling the sustainability megatrend is environmental degradation, public awareness, desire for personal and corporate accountability and more.
Mr. Lubin outlined best practices for leveraging sustainability. The common definition of which is, "meeting the needs of the present without compromising the ability of future generations to meet their own needs."
Companies that are able to execute sustainability strategies more fully than their peers stand to benefit from valuation premiums on their stocks and competitive advantages in the marketplace.
Unilever is doing this in consumer packaged goods, Chipotle in quick-serve restaurants, CH2MHill in architecture, engineering and construction, SAS in software and Anua in wastewater, water reuse and odor control.
These companies have changed thinking about sustainability from "a program," independent of other company functions, to "a way of doing business" integral to every department and every employee in the company.
To reap the opportunities of sustainability, Mr. Lubin suggests moving through four predictable stages:
- Proof-of-concept pilots focused on cutting cost and reducing waste. Dow has had an eco-efficiency program in place for 20 years that has returned $9 billion.
- Professionalizing the discipline with tools, processes, certifications and systems. FedEx has a sustainability certification program for their managers.
- Transforming the core business by integrating sustainable goals to drive innovation. Bord na Mona is moving from peat-based energy generation to wind and bio-mass based energy generation.
- Competitive differentiation in brand, business model and engagement of stakeholders which include customers, employees, business partners, investors, shareholders, NGOs and influencers.
Seven of eight consumers say climate change is a top issue and 84 percent say it is important to buy from eco-friendly companies.
Leveraging sustainability for greater employee engagement can bring benefits to operations and customer service as well as revenue gains.
Investors want to capture the sustainability premium — improved returns with social, environmental and governance benefits.
Finally, the vicious cycle of attack and defend between NGOs and corporations are being replaced by deeply committed partnerships with a shared vision as evidenced by partnerships between:
- Dow Chemical and The Nature Conservancy
- Wal-Mart and the Environmental Defense Fund
- Coca-Cola and the World Wildlife Federation
Can you and your firm benefit from the sustainability megatrend?
Tom Smith Tom Smith is the former director of operations and marketing at Anua. Tom is driving demand for wastewater treatment, water reuse, rainwater harvesting and odor/VOC control solutions. He has a B.A. from Duke University and an MBA from the Fuqua School of Business.