Implementing a genuine sustainability policy into your business plan is one the most powerful and credible strategies to enhance brand authenticity
STEVE HOWARD, IKEA
The big blue buildings of Ikea have sprouted solar panels and wind turbines; inside, shelves are stocked with LED lighting and recycled cotton. Why? Because as Steve Howard puts it: “Sustainability has gone from a nice-to-do to a must-do.” Howard, the chief sustainability officer at the furniture megastore, talks about his quest to sell eco-friendly materials and practices — both internally and to worldwide customers — and lays a challenge for other global giants.
Germany is set to unveil the country’s very first zero-waste supermarket. Berlin’s Original Unverpackt is the brainchild of friends Sara Wolf and Milena Glimbovski. Frustrated by the overpackaging and wastefulness they saw in the retail food industry, the young women decided to take action and launched a crowdfunding campaign in early May that has succeeded beyond all expectations. They now have the funds to open their first outlet this summer, with a second to follow soon after.
Patagonia: A Company with Soul
“The most important right we have is the right to be responsible.” – Gerald Amos
Patagonia is one of the leading clothing brands in the world, and leading also in their sustainability efforts within the industry. The company 'went organic' in 1996. Once you start, you can’t stop, they profess. “Living the examined life,” said founder, Yvon Chouinard, “is a pain in the ass.”
Underlying much of what challenges Patagonia is the modern commitment to growth and consumption. In the end, Patagonia may never be completely responsible. "We have a long way to go and we don’t have a map – but we do have a way to read the terrain and to take the next step, and then the next."
WASTE = FOOD
WASTE = FOOD explores this revolutionary "cradle to cradle" (as opposed to "cradle to grave") concept through interviews with its leading proponents, American architect William McDonough and German ecological chemist Michael Braungart, coauthors of Cradle to Cradle: Remaking the Way We Make Things. Their ideas are increasingly being embraced by major corporations and governments worldwide, unleashing a new, ecologically-inspired industrial revolution.
David Jones has recently released an Environment Strategy which outlines the actions the company will take in improving their environmental footprint. By reducing greenhouse gas emissions, protecting and conserving natural resources, optimising water use, and engaging shareholders, customers, employees and suppliers to ensure that their business model is environmentally sustainable by July 2016.
Good for Business
We are currently using resources at a rate of 1.5 planets (Living Planet Report 2010, WWF), raising costs for energy and raw materials. Setting aside concerns about sustainability, being careful with resources and managing energy use and costs for the future, is good business. To fulfil modern customer needs, address the high price of raw materials and energy, while driving down emissions and maintaining affordable prices, business models need to transform. This means challenging old ways, embracing the new and being bold, innovative and committed to taking action.
According to the MIT Sloan Management Review, 2600 executives of companies around the world were analysed over 4 years from 2010. A total of 37% of these companies reported profits from their sustainability efforts with a 23% rise in profits during one year. Nearly half, or 48%, of companies changed their business models as a result of sustainability opportunities.
More than 60% of companies that had changed their business model and had sustainability permanently on their management agenda reported increased profits from pursuing sustainability. Seventy percent of companies expected their commitment to sustainability to improve profits due to improved brand reputation.
According to 2011 Forbes report, many executives viewed making their business more sustainable as making their costs and profits worse. However, in practice, this perspective has been proven shortsighted and incorrect. The world faces shortages of resources of all kinds and businesses that use these resources most effectively will have an advantage. Most importantly, businesses can avoid costly damage to its brand from exposure of embarrassing or unlawful business practices.
Making operations sustainable is now a requirement for a modern company. With everyone on the internet, brands can be instantly hit very hard, placing the entire business at risk from news of unethical, unsustainable practices. Modern consumers are extremely aware of and well-informed about sustainability. They want companies to walk the walk. Brand value is affected by how well businesses act in sustainable ways. Tesco, WalMart, Toyota, Ikea, Nike, Coca-Cola, David Jones are
examples of businesses who understand that sustainability is the most powerful marketing strategy to enhance brand authenticity. Nike was almost put out of business by their unsustainable business practice but by addressing this issue, Nike is now seen a leading in sustainability and profits more than trebled.
DuPont, one of the early adopters of sustainability committed itself to a 65% reduction in greenhouse gas emissions in the 10 years prior to 2010. By 2007, DuPont was saving $2.2 billion a year through energy efficiency, the same as its total declared profits that year. When Marks and Spencer launched its “Plan A Sustainability Program “in 2007, it was believed that it would cost more than 200 million pounds in the first 5 years. Instead, the initiative generated 105 million pounds by 2011 by saving money and improving profitability by enhancing competitiveness. When Unilever (known most famously for Dove Beauty Soap) developed a Sustainable Living Plan during 2009 their stock value went up from $20 per share to $40 per share.
The Ivey Business Journal reported that businesses with sustainability policies reduce operational costs, produce less waste, improve worker safety, improve community relations, enhance worker productivity and increase innovation within company.