Twelve Principles for Sustainable Business

There is much talk of business needing to become more sustainable, in the face of an increasing number of challenges, including climate change, peak oil, new legislation, reputational risk, and increasing costs. That companies need to change is no longer the debate, but there is a need to understand (in easy terms) what businesses could be doing and how this action will deliver sustainable business success, as well as helping to save the planet.

The Global Research Project In Search of Sustainable Business was established to take this challenge forward, to ‘join up the dots’ and pull the fragments together, to develop holistic, rigorous business-focused models, to generate a greater understanding of cause and effect and a robust appraisal of the business case for change.

Following eighteen months of detailed case study development and analysis, I am pleased to share some of the initial insights from the first phase with you, distilled into twelve principles for sustainable business. Many of the lessons we believe are transferable and, therefore, helpful to businesses in all sectors.

For a copy of the full report please visit the Case Studies/Learning section at www.sustainablebusinesslab.org.  Here’s a summary of the twelve principles:

1. Think Big! Carbon is not the only issue.  By considering all aspects of sustainability, including resources and supply, waste and recycling, people and community, biodiversity and energy, it is possible to make a greater and more efficient impact.

2.  Develop Your Structure: An appropriate measurement and reporting framework for environmental, social and economic impacts will help provide visibility, focus and discipline. Life-cycle impact analysis enables you to identify opportunities for cost savings as well as improved sustainability performance.

3.  Think Entrepreneurially:  See if you can you incorporate sustainability principles to generate new income streams, differentiate your goods and services and enhance competitive advantage, e.g. production of renewable energies as a sideline to benefit from appropriate feed-in-tariffs? Look for significant operational cost and risk reduction opportunities that can be achieved by integrating sustainability initiatives.

4.  Look at Product Innovation: Consider ways of innovating in product design to reduce the amount of virgin raw materials needed, increase the use of recycled content and establish suitable low carbon alternatives. Consider offering value-adding customer choice, perhaps changing your model to focus on services that look after the complete product lifecycle.

5.  De-risk Your Business Model: Establish how dependent your products and business operations are on non-renewable inputs; look to find ways at reducing your long-term dependency and business risk.

6.  A Structured Approach to Energy and Carbon Reduction: Think about the ‘energy hierarchy’ – can you reduce the initial demand, and then improve energy efficiency, before considering the optimal mix of renewable energies.

7.  Re-think Resources and Waste: Consider adopting a closed-loop or cradle-to-cradle approach to resource management: find ways to re-use your own waste, or even waste from other industries/neighbouring businesses; one man’s waste is another man’s feed!  Huge benefits can be experienced; up to 70% of a product’s environmental impact results from gathering the raw materials!

8. Sustainable Supply Chains: Seek out suppliers who share your vision and values. Share the challenge and work collaboratively with your key suppliers. But ensure that commercial arrangements support and enable, rather than inhibit investment through the supply chain.

9. Align with Other Business Initiatives: Try integrating the key principles of ‘lean’, continuous improvement and energy, carbon and waste reduction within your own services and processes. Look for the full range of beneficial impacts that may be possible; scarcity and cost challenges may be a route to deliver improved resource utilisation, waste reduction and enhanced profitability.

10. Collaborate to Compete: Nobody has all the answers. There are a surprising number of people and organisations out there, grappling with similar challenges – go find and collaborate!

11. Sell the Business Case: Model all intended benefits and costs to establish initial business case expectations.  This enables you to sell the new approach to your board, customers and other stakeholders, and can help win over any sceptics.

12. Leadership is Crucial: Winning ‘hearts and minds’ is always key. Effective leadership, awareness raising and promoting the benefits will all help to drive change.  Employee engagement is vital, try and tap into the latent desire for improvement; set the challenge and see the great ideas they can generate. Try and incentivise the right behaviours, with a balance of ‘stick and carrot’. Finally, change is hard – persevere! Even when the ‘going gets tough’, never give up!

We aim to share more insights as we develop the second stage of the project in Europe and North America. Watch this space...