Sustainability – a new business paradigm

Christopher Gleadle 2011

www.thecmgconsultancy.com

In companies, it is common that major barriers to internal collaboration is

functional areas do not understand their impact on others.

Companies that can bridge that gap - using an imbedded sustainability strategy
aligned to the core business strategy, and business processes - will have an edge in
creating a competitive value chain capable of fulfilling business strategy
requirements.

It follows: improving service and responding to new customer expectations,

requires better information. Keeping better track of costs can inform and support
interpersonal, cross-functional discussions – helping companies better prepare for
uncertainties that lie ahead.

By considering investment in understanding better how assets and resources are

used, and applying the metrics forward, companies can position themselves for
greater flexibility in the future.

As environmental concerns become a much more significant issue for companies

– and their supply chains – in the years ahead; taking action now into sustainability
planning and implementation will create differentiation in terms of lowering
organisational cost, creating superior market place attractiveness and deliver
rising levels of customer service through improved team cohesion (see:
Sustainability and being a trusted supplier - C M Gleadle).

Additionally: given that up to sixty percent of a company’s carbon and environmental

footprinting – and therefore risk – can reside upstream in the supply chain; it would
be prudent to pursue economically attractive opportunities which address
environmental impact in the near term to prepare robust responses very quickly to
the increasing shifts in environmental expectations and requirements of
customers.

The shift to a low-carbon economy is increasingly gaining traction and is a topic of

importance to all senior managers – whether a large corporate or an SME.
Science states that carbon output needs to fall to levels of up to ninety percent
below 1990 levels by 2050 in order to restrict global warming below two degrees
centigrade (Fourth assessment report (2007) of the Intergovernmental Panel on
Climate Change – IPCC). In order to gain sustained economic growth within the
boundaries of business as usual, carbon productivity – measure against GDP per
unit of greenhouse emissions – would have to show an increase between five and
seven percent. Contrast this against historical carbon growth of one percent when
carbon emissions were not deemed to be an issue.

Therefore, economic growth must be de-coupled from emission growth (see: The
value of sustainability in business – CM Gleadle)

What we have to see going forward is investment in low-carbon technologies to

dramatically reduce energy consumption and greenhouse gas emissions; and, a
company wide sustainability strategy, which holistically links organisational
processes to the new technologies.

As customer expectations shift to reducing the risk of environmental and social

exposure of their supply chain, executives are going to have to fundamentally review
the way they look at their business to remain vital.

Companies need to optimise the carbon efficiency of their existing assets, products
and services, and their supply chains. They need to look at new forms of low-carbon
energy supply whilst also investing in new low-carbon technologies. Such strategies
will - and are – rewarding companies that deliver more efficient products and
services supporting the efficiency and exposure of their customers.

Notwithstanding new customer and market expectation acting as economical

drivers, governmental policy and constantly rising energy costs make this move to
sustainability an imperative.

There are many profitable opportunities to save money and cut energy
consumption and greenhouse gas emissions. The Carbon Trust estimates that the
UKs four million SMEs could collectively save £1.37bn a year. (See Climate Change:
The great business opportunity – CM Gleadle)

There will of course inevitably be winners and losers. The losers will be those
companies that do not embrace sustainability.
Winners will be those companies who not only have the insight into new low-carbon
technologies, but also orchestrate the creation of low-carbon value chains by
embedding sustainability in to the DNA of their operational processes. Additionally,
winners are effectively communicating and engaging with both public and private
stakeholder groups; demonstrating and proving their environmental and socially
efficient solutions are economically attractive. Hence, they deliver greater value and
lower risk: making themselves more attractive to both the market place and
investors.

Christopher Gleadle
www.thecmgconsultancy.com