Outperform Your Competitors by Incorporating Sustainability Strategies
Researches show incorporating sustainability strategies could help to grow your business faster!
I want to grab your attention to a topic that everyone, especially Millenials, is concerned about…
The Earth!
We reached an era when we cannot ignore the harmful effects of humans irresponsible activities on our planet. Therefore, there seem to be more and more companies incorporating sustainable business practices. In fact, Incorporating sustainability strategies into your company is not only good for the planet, but it can also help you outstand from the crowd!
I approach sustainability as eliminating waste of time and resources and increasing efficiency to benefit the environment and humanity.
I worked in five companies so far, two of them were startups, and I was lucky to work with many hardworking and smart executives. However, as an environmentalist, I often struggled to get the executives' attention to sustainability issues. After all, the priority in startups and many companies might not be the business's sustainability but rather financial issues.
I realised companies are resistant to my sustainable approach, mainly because of the initial costs of incorporating new strategies, and the long-term payback is usually ignored.
Recently I came across some interesting studies that show incorporating Sustainable Development Goals and communicating them with customers may boost company growth, especially in the B2C market.
Sustainable Development Goals
In September 2015, the most prominent call of action for sustainability was launched. That day, the United Nations called for governments, businesses, NGOs and citizens to achieve 17 Sustainable Development Goals (SDGs) and its associated targets by 2030. As a result, SDGs have become another inspiration for many companies, and sustainability leaders incorporate these new objectives to fit best into their business.
Incorporating sustainable strategies existed for a long time. The most outstanding example is Unilever, which is established around 90 years ago in the UK. Unilever owns over 400 brands, with a turnover in 2017 of 53.7 billion euros, and thirteen brands with sales of over one billion euros.
Success Stories
In 2009, the CEO of Unilever, Paul Polman, decided to reduce its environmental footprint in half by 2020, while doubling its turnover. Unilever developed the Unilever Sustainable Living Plan (USLP) in 2010 and set new corporate sustainability program standards.
“The company committed to helping more than a billion people to take action to improve their health and well-being and to resource all agricultural raw materials sustainably by 2020.” — Benoit Leleux & Jan Van Der Kaaij, Winning Sustainable Strategies
The results are impressive. Unilever claims its sustainable living brands deliver more than 60% of Unilever’s growth and grow 50% faster than the rest of the business. Over €1 billion costs avoided with a total shareholder return of over 230%.
In 2011, another study was done by Harvard Business School on 180 companies, 90 of which were classified as High Sustainability firms those who integrated social and environmental issues into a company’s strategy and business model by adopting corporate policies. The study shows that the high sustainability companies outperform their counterparts in the long-term, both in terms of accounting performance and the stock market.
“In addition, during the 18-year period of the study, the results also suggest that High Sustainability firms benefited relatively more in B2C sectors and in sectors where companies compete on the basis of brands and human capital, and where firms’ products depend on extracting large amounts of natural resources.” — The Impact of Corporate Sustainability on Organizational Processes and Performance
Regarding shareholder wealth, the High Sustainability firms generate significantly higher stock returns than the other 90 companies. The competitive advantage for a company in the long-run may be incorporating sustainability into a company’s business model and strategy.
“A more engaged workforce leads to a more secure license to operate, consequently, a more loyal and satisfied customer base, and greater transparency. The High Sustainability firms have better relationships with stakeholders, a more collaborative community, and a better ability to innovate, which may contribute to this potentially persistent superior performance in the long-term.” — The Impact of Corporate Sustainability on Organizational Processes and Performance
Where to Start?
Take small and simple steps to reduce their negative environmental footprint, reduce inequality, poverty, and grow the business. The priority highly depends on the company’s portfolio and vision. I would suggest to include sustainability in the companies’ ultimate vision and bring everyone together to adhere to SDGs.
Moving towards sustainable goals will make you a greener and sustainable brand in a long run. And it brings you the opportunity to enhance your brand image and give you a sustained competitive advantage.
1 Decide What Fits Best Into Your Business: I categorised SDGs to three groups: A. Environmental Goals, B. Equality & peace, C. Growth. That gives us a better overview of the goals and prioritises each practice based on our vision and portfolio.
A. Environmental Actions: Affordable and clean energy. Sustainable cities and communities. Responsible consumption and production. Climate action. Life below water. Life on land.
B. Equality & Peace: No poverty. Zero Hunger. Good health and well-being. Quality education. Gender equality. Clean water and sanitation. Reduced inequalities. Peace, justice and strong institutions.
C. Growth: Decent work and economic growth. Industry, innovation and infrastructure. Partnership for the goals
The goals can be picked up depends on a company’s status and deliverables. For example, if my company is in a growth period, I might incorporate gender equality quicker with a lower cost than any other goals.
2 Provide Feasible Goals: This article is not written only for entrepreneurs, but for whoever works with people other on a product and knows how to improve a product's efficiency or service. I believe, at every level in a company, you can start incorporating SDGs.
I’m sure 100% of people know multiple ways to improve efficiency of a copmany’s deliverables that matches SDGs but they rarely share it.
Microsoft will be zero waste across their direct waste footprint by 2030. The company implemented different practices in different sectors, such as improving the data centres operation's efficiency. Microsoft set incentives for data centre managers to higher the efficiency of their centre to keep them motivated.
We should choose some goals that are matching our available resources and the company’s status. Putting together such a plan is like preparing a full business case, depends on the picked goals, it might take days or months to prepare a cohesive SDGs implementation plan. Be patient; it will pay off.
3 Rolling out: For rolling out the plan, we need supporting data, tools, and guidance to internal teams so they could incorporate these improvements into their practices. If applicable, we can guarantee these tools will be used to the extent by offering a financial incentive.
4 Share The Success Stories With The Team and Customers: Tumi Holdings, Inc., is a manufacturer of high-end suitcases and bags founded in 1975 by Charlie Clifford in Peru’s Peace Corps. The company reached $330 million in sales, and its products are available in over 65 countries. Few of the actions made by Tumi towards sustainability are:
- Tumi participated in the Fair Labor Association, a non-profit initiative whose mission is to promote adherence to international and national labour laws.
- Tumi suppliers were audited for environmental sustainability and workplace health and safety.
- Tumi also master pack products for shipping to reduce cardboard, carbon emission, and freight costs when viable.
Jerome Griffith, CEO of Tumi, explains his Tumi store visit in New York City in an interview with the authors of Winning Sustainable Strategies:
“I was having a conversation with a store manager. He raised a small issue that bothered him. We used to supply the stores with special bags to pack the customers’ purchases. These bags were really fancy and brand enhancing. shiny and opulent. Then a few months earlier, we introduced new bag models he found less exciting, less rich. What had happened is our Corporate Social Responsibility (CSR) specialist, Adam Black, had discovered that the old bags were probably the worst we could have found in terms of their environmental footprint. The raw materials used were not renewable, the processes used to manufacture them were wasteful, the chemicals applied to give the shine were harmful to the environment, etc. So he worked with suppliers to develop and source a new type of bag for Tumi, manufactured from recycled materials and processed ecologically. The new bags were less shiny, and less brand enhancing. And at Tumi, we used some 2 million bags a year… I explained that to the store manager and he was astounded and delighted to hear the story behind the bag. That moment really stuck with me. I realised how good we were with ESG issues (Environmental, Social and Governance), and how pathetic we were at communicating these elements, even to our own people. From there on, we made sure to explain our actions and make them visible to everyone, within Tumi and outside Tumi. Because they mattered a lot to employees and customers…” — Jerome Griffith
As mentioned, better relationships with stakeholders is an essential factor in persistent superior performance in the long-term.
Let’s face the fact that we have only one planet with limited resources for more than 7.5 billion people. Moving toward a more equal and green world is our business. I hope my success stories could encourage you to take actions towards a more sustainable company.
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