Strategic

The Business Case for Sustainable Development in an Organization


Contributing to sustainable development is not only the right thing to do, it makes good business sense. Sustainable development helps us be a more competitive company and create value for our shareholders by:

Reducing our operational and financial risk

Delays, approval failures, or disruption to existing operations by concerned communities are significant risks to our business. Understanding what our stakeholders perceive as responsible behavior, meeting these expectations and achieving recognition from financial institutions, investors and customers deliver obvious financial benefits.

Reducing costs through eco-efficiency

This is about producing more with less energy and materials. For example by adopting cleaner technologies, reducing emissions, recycling, reusing, minimizing waste and even turning waste into saleable products. These activities improve the efficiency of our operations, help us reduce our costs, avoid current and future costs of emissions and even create new income streams.

Influencing options and evolving portfolios

By anticipating new markets driven by societal and customer desires for a cleaner, safer, more sustainable world, and evolving business portfolios and supply chain relationships to match, we can gain competitive positions and enhance our ‘licence to operate and grow’.

Influencing product and service innovation

Being aware of changes to customer life styles and values enables us to differentiate our products and provide more services to customers that reflect and meet their demand.

Attracting more loyal customers and enhancing the brand

Providing products and services built on sustainability thinking create customer loyalty and market share.

Attracting and motivating top talent

Our commitment to sustainable development is an important factor in some people’s decision to join and stay and that alignment between personal values of staff and corporate values is a powerful motivator.

Enhancing reputation

By being seen and being credible as a good corporate citizen whose performance matches its words, we become the organization of first choice for customers, staff, investors, suppliers, partners and the communities in which we operate.

The company takes a very broad view of sustainable development. Its high-profile stance provides an example of the consequences for strategy of ‘making it happen’. Its 2005 Sustainability Report details:

 Commitments and standards: documented principles written and approved by the Board and signed by divisional managers. These standards were drawn up after detailed consultation with stakeholders;

Governance and structures: establishment of a Social Responsibility Committee of the Ltd Board, chaired by the CEO. This sets performance metrics, reviews progress and performance and appraises options.

 Stronger controls and incentives: each line manager is required to write an Annual Assurance Letters, reviewed by the Board, outlining their division’s compliance and progress on sustainable development. These are reviewed by the Audit Committee of the Board. All divisions are required to achieve relevant certifications such as ISO 14001 (an environmental standard) and others such as on animal testing if relevant. A balanced scorecard contains measures for the elements and is used for performance
appraisal and pay.

Human resource development: creation of a management and leadership development programme to include SD issues. Project Management Academy trains in coping with these area too.

Perspectives on sustainability include:

 An essential consideration for which corporations must shoulder responsibility if the Earth is to avoid global tragedy
 A fad pushed by elite political groups and which is now being alighted on by consultants and academics to generate research and consultancy incomes
 ‘Greenwash’ that large corporations can use as rhetoric whilst underneath they continue to conduct their usual disruptive activities.

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