Lessons from the Top: How Top Performing Companies get Into Sustainability

A recent Sustainability and Innovation survey of global corporate leaders conducted by Boston Consulting Group and MIT Sloan Management Review, found that sustainability is at the core of many ot the top performing businesses. BCG and MIT surveyed more than 3000 business executives and managers and organizations from around the world. The survey captures insights from individuals in organizations in every major industry.

Point of entry: waste reduction and resource efficiency

These are initiatitives that companies can start working on. Waste reduction and resource efficiency are identified as the low-hanging fruit. Respondents put the two as priorities that help them run lean and efficient operations. It is measureable and it saves money.

Via MIT Sloan Review Management.

For Clorox, it was an entry point into sustainability. “We had done the measurement on footprint and the groundwork on projects so that people could buy into the greenhouse gas reduction, solid waste reduction and water reduction goals,” says Beth Springer, executive vice president of international and personal care at Clorox. “They could see the path.”

For Johnson & Johnson, resource management is also an efficiency measure that contributes to profitability. According to its 2009 Sustainability Report, between 2005 and 2009, the company completed more than 60 energy-reduction projects, representing $187 million in capital investments, which it expects will collectively reduce carbon dioxide emissions by 129,000 metric tons annually and provide an internal rate of return of almost 19%. The projects have so far generated about 247,000 megawatt hours of cumulative energy savings a year.

During the same period, Johnson & Johnson made a 32% cut in both hazardous and nonhazardous waste. “It’s been better for the bottom line, especially in terms of energy costs,” says Al Iannuzzi, senior director of worldwide health and safety at Johnson & Johnson. “Waste is cost to the corporation … and, of course, the less waste you send out of your gates, the less expensive it is to make your product.

The top drivers

From there, the embracers expand their practice to embed sustainability into their core values, because they see the link between sustainability and profit. Among the top drivers that support sustainability-related investments are:

  • – Increase margins or market share.
  • – The opportunity for greater potential for innovation in their business models and processes.
  • – Access to new markets.

The_top_3_benefits_of_sustainability

Click on image to see larger view.

Making it happen

World_view_of_sustainability_leaders

The 7 habits of top performing businesses:

1. Move early – even if information is incomplete.

Be bold. Use your gut. This is a journey.

2. Balance broad, long-term vision with projects offering concrete, near-term “wins.”

It’s a balance between ambitious vision and areas of competitive advantage. The smart companies narrow their projects into those that they can produce early, show bottom-line results and practicality.

3. Drive sustainability top down and bottom up.

Sustainability must be driven not only from the top down, but also it must involve employees at all levels for ideas and insights from multiple sources.

4. Aggressively de-silo sustainability – integrating it throughout the company operations.

Top performers applied sustainability to all existing business processes.

5. Measure everything (and if ways of measuring don’t exist, start inventing them).

Establish baselines and develop method of assessments so that starting point can be identified and progress measured. Try to establish ways of quantifying the impact of sustainability on brand, innovation, and productivity.

6. Value intangible benefits seriously.

“Smart companies are realizing that conservation of natural resources they need is a fundamental part of risk management.” Coke and Pepsi realized that water is the key ingredient to their business. Water conservation is fundamental to their business, if they want to stay in business. Allow time to develop the ability to measure and understand fully – intangible advantages. Companies need to make investment decisions based on tangible benefits, intangibles and risk scenarios.

7. Try to be authentic and transparent – internally and externally.

Be realistic. Do not overstate motives or set unrealistic expectations. Communicate your challenges as well as your successes.

Dig deeper for Sustainability: The ‘Embracers’ Seize Advantage, here.

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Author: Dewita

Co-founder Ecotwist Labs.

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