Corporate Sustainability Part 2: Managing the Future Today

Corporate sustainability is about smart business consumption, a stratEQic, pragmatic and astute management approach. It blends economic profit, ecological balance and social compatibility in a management formula that goes beyond tick box compliance and glossy reports. Businesses that develop the mastery of growing profits in balance with their environments and enhancing social wellbeing will be the brand giants of tomorrow. Steve Burt, CEO EQi Group, writes in a recent LinkedIn post. You can read part 1 here.

Economic Profitability

Sustainability is about how one conducts business operations in a profitable manner within the resource and impact limits of the planet. Economic profitability is fundamental to creating a sustainable world and society. The existing for-profit system is key to building a future, maintaining a stable society and building long term returns that provide the bedrock of future economic growth and a well maintained ecological system.   Today’s business models are built with the primary focus of producing profit and thus providing all stakeholders the ability to grow their wealth for future needs. There is an intricate relationship between the performance of companies and people’s financial and personal wellbeing.

As 21st century challenges become more obvious, business leaders are realising that their business models need to be changed to models that are less resource hungry, do not damage the planet’s fundamental ecological infrastructure and are compatible and complementary to the societies in which they operate. This change brings a new dynamic which requires careful consideration, planning and implementation: classic change management.

Accurate information is critical so that businesses can understand the financial gains that resource efficiency will deliver – in savings and value. Knowing the value to be gained from implementing these forward-looking changes will not only preserve, but progress commercial success – and this is critical to embedding sustainable cultures and change.

To date, sustainability has not been embraced as a change management mechanism but more as an estimation of a business’s position to attain some recognition that it is doing the “right thing.” Awards are given for efforts and glossy reports are used to sell the message.  What happened to addressing the real issue of reducing resource use and increasing bottom line returns?

Ecological Balance

Ecological balance plays a critical role in the stability and success of all businesses and organisations.  A clear strategy on how using ecology as part of profitable growth will bring increased returns on investment and secures long term customer loyalty. Ecological consciousness and planning as part of a business strategy is not only responsible but intelligent business management because it protects the fundamental resources that every business needs to thrive.

Since every resource businesses use to produce their goods or services can have an ecological impact, it is in a business’s interest to proactively manage their ecological impact to protect their on-going profits. It is an executive’s fiduciary duty to protect the company’s assets, minimise risk and protect profit, understanding how to reduce such impacts while maintaining shareholder value should be a key executive responsibility.  Furthermore, understanding these risks and impacts is critical to migrating to a sustainable business model. Being able to accurately determine and reduce the negative ecological effects in an operation and its supply chain protects future profits and value. Ecological balance will drive innovation, create business disruption opportunities and open new levels of shareholder returns.

Social Compatibility

Social impact management affects all aspects of running and conducting business[1] and is a great profit generator, building compelling brand positions that protect future returns. It feeds into future research, development and design and can provide competitive advantages that translate into greater stock performance and lower capital cost. It cannot be ignored.

With the advent of brand reputation being a critical aspect in winning and maintaining customer loyalty, businesses can no longer be cavalier about the social impacts their operations and supply chains may have. Social compatibility therefore is a powerful mechanism for building a sustainable business. Enlightened and astute executives are bEQinning to view sustainability as a business driver, not a marketing tool or legal cost. Engaging employees and their communities means opening up minds, multiplying your intellectual resource and adding new perspectives to create new and competitive products and services.

Sustainable Organisations

Sustainability is a journey not a prize. It is an outcome to be achieved. It is fundamentally about first class management and resource efficiency. For business teams to plan and act on a meaningful change management strategy that migrates a business and its supply chain to an acceptable level of economic, ecological and social sustainability, executives need accurate, comprehensive and trustworthy information.

Unlike the one-dimensional compliance, carbon management, and sustainability reporting systems out there today, Corporate Sustainability needs a comprehensive global system akin to financial systems with accuracy and detail – one focused on numbers and targets, and providing relevant resource consumption information to everyone who needs it, thereby allowing business teams to work together.

Each business sector and industry will need to create their own resource efficiency operating model and change strategy. There are many options business teams could look at as examples and there are going to be many more created.

One fine example of how companies can create strong market and competitive positions while protecting the environment and enhancing social wellbeing is demonstrated by the Zeitz Foundation, a group of global businesses that have embedded sustainability through their tourism operations to build profitable, long term, and resilient destinations. They have harnessed economic profit, ecological balance and social compatibility through the principles of the four C’s: Conservation, Community, Culture and Commerce.

Resource Efficiency Economics

The financial opportunity and compound savings achieved by migrating to a resource-efficient, sustainable model has not yet been realised by the vast majority of companies. To make an operation sustainable, quantification, not qualification, is required.

Resource efficiency needs to be the main focus and driver in moving the business model forward – using hard numbers that give accurate positions of resource use at a granular level in order to understand how making small efficiency changes can add up to a significant savings. When resource efficiency is the business focus operating resiliency and sustainable profits will follow.

EQi is a data and technology company that connects business to sustainability by providing resource efficiency management solutions. EQi has announced successful certification as a founding UK B Corporation.

[1] http://www.aspeninstitute.org/policy-work/business-society/publications-speeches/publications-archives/social-impact-management-de