The Business Guide to Sustainability

Practical Strategies and Tools for Organizations

Darcy Hitchcock, Marsha Willard

• Publisher: Routledge
• Year: 2012
• eBook ISBN: 9781136554827
• Edition: 1
• Topic: Business
• Subtopic: Management
• Index: Business

Winner of Choice Magazine - Outstanding Academic Titles for 2007

Sustainability promises both reduced environmental impacts and real cash savings for any organization - be it a business, non-profit/NGO or government department. This easy-to-use manual has been written by top business consultants specifically to help managers, business owners, organizational leaders and aspiring environmental managers/sustainability coordinators to improve their organization's environmental, social and economic performance.

The authors demystify 'sustainability', untangle the plethora of sustainability frameworks, tools and practices, and make it easy for the average person in any organization to move towards sustainability. Organized by sector (manufacturing, services and office operations, and government) and common organizational functions (senior management, facilities, human resources, purchasing, environmental affairs and compliance, marketing and public relations, and finance and accounting), the authors show how organizations can incorporate sustainability into their everyday work through the application of useful tools and self-assessments.

Part 1

Foundation Concepts

1

Sustainability as a Strategic Issue

It is hard to manage an organization in today's turbulent world. Practically every day, we learn of a new technology, social dilemma or environmental problem. Businesses worry about the proliferation of new regulations and the effects of globalization. Governments struggle to maintain services while addressing the needs of an increasingly diverse and growing population amid an anti-tax culture. Unless you want to be buffeted by each change, you need a framework for making sense of what is happening in the world so that you can foresee changes and take action before they happen.

Sustainability is such a framework. It doesn't encompass everything you'll need to track to be successful and it's not a crystal ball. However, sustainability does help you see relationships between issues and more accurately forecast what may occur in the future. It examines our world as a whole system, revealing threats and opportunities. It forces you to see relationships between social, economic and environmental trends. This improved foresight can prevent unfortunate surprises and uncover previously unrecognized opportunities. If you understand sustainability, you can be a step ahead of the companies or communities with which you compete.

Sustainability challenges us to make decisions that simultaneously improve the economy, the community and the environment. That challenge may seem far outside the scope of your responsibility. Why would an organization take time to examine its impacts on these large and ‘squishy’ issues? Think of sustainability as a wide-angle lens. It helps you to see beyond your normal field of vision to take in potential threats and opportunities that you might have missed before.

Benefits of pursuing sustainability

Here are some of the benefits you should expect, based on the experience of other businesses and communities that have embraced sustainability.

Reduce energy, waste and costs. Some organizations have achieved the goal of zero waste to landfill. These organizations are able to eliminate haulage costs and also get paid for the ‘residual products’ (formerly known as waste). The Collins Company, a manufacturer of wood products in the US, found a way to put waste back into the product, not only saving money but also reducing the need for resins and improving the quality of the plywood. A prison in Oregon has reduced its natural gas bills by about 65 per cent by preheating water with solar (thermal) energy before putting it in the boilers.

Differentiate yourself. Companies and communities are always looking for ways to differentiate themselves from their competitors. Sustainability, at least until it becomes standard practice, can provide a way of making your organization stand out. For example, Scandic Hotels in Sweden was losing market share until they adopted sustainability as a focus. Sustainability gave them a story to tell. Guests don't just find a place to sleep; they become part of an exciting trend.

Sidestep future regulations. Regulations are constantly changing. For those who want to get ahead of the curve, sustainability provides a useful framework for understanding the ‘endgame’. Due to new regulations, a Swiss textile manufacturer was going to have to treat their trimmings as hazardous waste. They switched to benign chemicals and now their product is biodegradable; so their ‘waste’ is now turned into a new product instead of being thrown away.

Create innovative new products or processes. By helping you to see the world's present and future challenges, sustainability can help you develop new products or processes that can be part of the solution. By focusing its funding on sustainability projects, ShoreBank Pacific, a small financial institution in Ilwaco, Washington, has attracted deposits from across the nation. Toyota developed its hybrid technology and is now selling it to other manufacturers. An entire cluster of renewable energy companies is being formed in Bend, Oregon, providing good jobs and a bright future in this remote area.

Open new markets. Most companies focus on serving those in industrialized nations, less than one-sixth of the world's population. Believe it or not, you can make a handy profit serving even the most destitute 3 billion people, if you have a product they want at a price they can afford. Amul, a dairy cooperative in India, discovered they could sell ice cream to the poor in India if they could get the cost down to around a rupee a scoop. Since most of the cost is in refrigeration, they developed a much cheaper way to keep the product cold. This new process opens up a gigantic marketplace and has uncovered a radically cheaper refrigeration process that could be used in other venues, providing them with a competitive advantage.¹

Attract and retain the best employees. Many of today's employees want to work for companies that share their values. Sustainability can help infuse even mundane jobs with meaning. Hot Lips Pizza, a small restaurant chain in Portland, Oregon, found that pursuing sustainability helped them attract a much higher quality employee because the mission made the work seem more meaningful. Sustainability can unleash a sense of passion not possible with most other organizational change efforts. Even burger-flippers at Swedish McDonald's can feel as if they are changing the world by serving organic dairy products and beef. Sustainability, because it includes both environmental and socioeconomic issues, is broad enough to encompass most people's concerns, whether they are the future of the rainforest or the future of schools. When employees feel as if their work is a means to solving major societal issues of concern to them, you tap into a powerful source of commitment and loyalty.

Improve your image with shareholders and the public. Sustainability can put organizations on the leading edge of an exciting and socially responsible trend. This can help the largest corporations, who are often targeted by non-governmental organizations (NGOs), build goodwill with the public. But it can also help tiny organizations get recognition. Gerding/Edlen, a developer in the northwest US, has received national recognition in trade journals and on a Public Broadcasting TV show. ‘We couldn't have bought this type of PR,’ the owners say.

Reduce legal risk and insurance costs. In order to manage risk, organizations must keep an eye on social and environmental practices. Sustainability can help organizations radically reduce those risks and the overhead costs that go with them. OKI Semiconductor discovered that, by eliminating certain toxic chemicals, their insurance company could offer them a lower rate. Swiss Re, one of the world's largest reinsurers, now is threatening to deny coverage to organizations that do not have a plan in place to reduce greenhouse gas emissions, recognizing that they will bear the brunt of the risk associated with climate change.

Provide a higher quality of life. Sustainability helps communities make decisions that maximize the quality of life through ‘smart growth’ design principles. Curitiba, Brazil, for example, combined insights in urban planning, transportation and social programmes to provide a much better quality of life for all their citizens, rich and poor. Their public transportation system is so convenient and well used that it requires no government subsidy. The whole city is designed for people, not cars, reducing air pollution while enhancing the quality of life.

Threats if you don't pursue sustainability

In addition to the benefits of pursuing sustainability, there are also threats you can avoid. Organizations that choose to ignore this worldwide trend may put themselves at unnecessary risk. In 2005 alone we can list a host of different disasters that might have been forecasted by an understanding of sustainability. Climatologists predict that climate change will bring bigger, more violent storms, of which the floods in Europe and hurricane Katrina may have been examples. Chemical companies may not have had to fight the Registration, Evaluation and Authorisation of Chemicals (REACH) Directive in Europe so strongly had they foreseen the need to clamp down on pollutants. The jump in oil prices has been predicted by Hubbert's Curve for decades, although the precise date for peaking oil supplies is still in dispute. The massive benzene spill in China could have been averted if the country had not pursued economic growth at the expense of the environment and if less toxic alternatives were in use. Even the Paris riots, a purely socio-economic issue, were foreseen by, among others, Thomas Friedman, the New York Times foreign correspondent who identified the European unwitting complicity in Arab terrorism in his book Longitudes and Attitudes: Exploring the World After September 11. Note that in all these cases it was not possible to predict the exact timing of the disaster or the location, but understanding sustainability made it possible to envision the probability that such a disaster could occur. Looking forward, effects of climate change (environmental and social), persistent toxins and emerging pollutants, invasive species, peaking fossil fuel supplies and water availability are at the top of our list of concerns. Prudent leaders factor these risks into their plans.

The threats to you may not be as dramatic as the ones described above. Here are some of the more everyday problems that sustainability can help you avoid.

Liability for pollutants. Even though smokestack emissions and waste-pipe discharges have long been the targets of environmental regulations, organizations are still often caught off guard every time a new substance is added to the list of regulated substances. Smart companies anticipate these hits by taking a proactive look at the raw materials they use in their processes. If it goes into your product, likely as not at least some of it will end up in your waste stream. Increasing attention to waste lead, for example, caught most of the members of the metal casting industry unprepared. One small metal caster in Oregon, Barr Casting, anticipated the problem and developed a casting process that didn't use lead. When the owner of a now-defunct competitor discovered what Barr had done, he moaned, ‘Why didn't my engineer tell me about this?’

Liability is also beginning to extend beyond the factory gates. More and more industries are surprised at how far their liability for toxins and other damaging substances extends. The current trend toward product stewardship or producer responsibility increasingly holds manufacturers responsible for the impacts of their products for their entire life cycle. Electronics companies, for example, are scrambling to design end-of-life options for their products in anticipation of state and national regulations that are likely to prohibit the disposal of computers, televisions and cell phones.

Supply problems with raw materials and energy. Sustainability helps you to foresee potential future supply and demand problems. Wouldn't you like to know in advance if a material or resource is likely to become much more expensive or unavailable? When the energy crisis of the 1990s hit the US Pacific northwest, it resulted in closing down the area's entire aluminium industry, which had become dependent upon cheap hydropower. In the half-century they had been around, many other industries had undergone major transformations in process efficiencies, but the aluminium industry was still melting rocks with electricity. Had they been better able to foresee the future of energy, they might still be operating.

Attacks on your image. Sustainability helps you to understand the expectations of all your stakeholders. It can take years to recover from one well-publicized mistake or omission. Nike, for example, discovered the hard way that the public holds them responsible for the actions of their contract manufacturers. Nike is still trying to recover from bad publicity about sweatshop operations, years after the story broke.

Legal risks. Many companies have been held responsible for actions that were legal at the time but later determined to be harmful. General Electric is fighting litigation intended to make them pay to clean up toxic chemicals they dumped into the Hudson River. So staying within the bounds of current legal practice is no protection. Sustainability can help you assess your environmental legal risk, taking into account issues beyond compliance ...

Table of contents

• Cover Page
• Half Title page
• About the authors
• Title Page
• Copyright Page
• Contents
• Figures and Tables
• Acknowledgements
• Abbreviations
• Introduction
• Part 1 Foundation Concepts
• Part 2 Sustainability by Industry Sector
• Part 3 Sustainability by Organizational Function
• Appendix A Sustainability Frameworks and Tools
• Appendix B Certification Schemes
• Notes
• Index