The secret of sustainable success

Emiliana Winery, Chile
Grape expectations: Emiliana Wines is an organic and biodynamic Chilean winemaker Credit: Alamy

Oliver Pickup explores the businesses embracing change for long-term gain.

All over the globe, from traditional behemoths to smaller start-ups, companies are striving to be more sustainable and eco-conscious.

This is not just about hitting flimsy corporate social responsibility (CSR) targets, though; whole business models are being rewritten with the aim of becoming more effective and more profitable. 

The changes made range from operational tweaks to cultural and behavioural revolutions, and their potential impact is enormous, proving that a sustainable approach can be both better for the soul and the balance sheet.

Phil Gilbert, Director of Customer Solutions at E.ON says: “Energy costs can have a significant impact on a business’s bottom line and putting yourself in control of your energy use – by cutting down waste, using smart technology to manage buildings, and possibly generating your own power – are all options to consider.

If companies don’t show a commitment to sustainability they are simply out of the game

“Investing in energy efficiency or in new generation technologies can make sound investments, often paying back in only a few years. Across Europe we are seeing customers actually profiting from improving their energy efficiency. As well as the bottom line impact, investing in new energy solutions can also unlock new growth and improve productivity and overall competitiveness.”

One celebrated example of a huge multinational company successfully altering its culture is Unilever. The Anglo-Dutch conglomerate’s Sustainable Living Plan launched in 2010, with the aim of doubling revenues while halving its environmental footprint.

That’s a huge target for a company that owns more than 400 brands and at the end of July 2016 announced a half-year turnover of €26.3 billion (£22bn).

Already, just over five years in, Unilever is on track to meet the vast majority of its aims, which included helping more than a billion people take action to improve their health and wellbeing by 2020 and halving the environmental impact of its products by 2030.

Costs have been significantly reduced, thanks to savings on energy, waste and time in factories and since 2008 eco-production has helped save €600 million (£500m).

A more robust sustainability approach, developed through eco-efficient practices can significantly decrease operational costs

And risk has been reduced by securing long-term supplies of agricultural raw materials. Further, sales have been boosted by using brands that have put sustainability at the heart of their offer, and through sustainability-led product innovation – a compelling attraction to many of today’s savvy shoppers.

“Unilever is an inspiring example, but perhaps too large for those smaller businesses who view sustainability as a daunting task,” suggests Dr Pablo Munoz, a lecturer in Business and Sustainable Change at the Sustainability Research Institute at Leeds University. However, he adds, there are plenty of smaller examples of businesses putting efficiency at the heart of their strategy.

“In a recent research project we observed the different sustainability strategies used by companies entering, or willing to enter, conscious consumer markets, and there were some incredible examples,” he says.

“Emiliana Wines, for instance, is an organic and biodynamic Chilean winemaker, which has one of the most comprehensive materiality matrices I have ever seen.” The business complies with the most rigorous sustainability international standards and certifications, and was Wines of Chile’s Green Winery of the Year in 2014.

At the other end of the food and drink sector, says Munoz: “American ice-cream company Ben & Jerry’s was one of the first companies in the world to place a social mission in equal importance to its product and economic missions. They were bought by Unilever in 2000, though only on the understanding that they would have a board independent of their parent company, so they could maintain their high standards.

Cream of the crop: Ben & Jerry's were bought by Unilever in 2000 Credit: Alamy

“Some argue that Unilever’s transformation was due to Ben & Jerry’s strong culture, and there is evidence to support this. It is one of the most amazing underdog stories: they changed an empire from the inside out.”

Dr Munoz believes that it is critical for companies that have an eye on both long-term costs and risks to act now to improve their sustainability. “A more robust sustainability approach, developed through eco-efficient practices – such as environmental management – can significantly decrease operational costs,” he says.

What’s more, adds Dr Munoz, embedding a strategy that takes a long-term view on access to resources puts a company in a favourable light for investors, while a strong ethical brand builds the customer engagement that can help a business ride out stormy economic seas.

It’s all positive stuff, he says. “As I see it, if companies don’t show a commitment to sustainability they are simply out of the game.”

How to think more sustainably

Hermione Taylor, founding director of behavioural change platform The DoNation, says: “Behaviour change is often made to seem terrifyingly complex, but I believe that when you break it down into individual actions, it becomes startlingly simple – and usually these actions just make sense.

“To embed a culture of change that will allow businesses to adapt to the complex issues of sustainability and energy, you must engage their whole workforce in the challenge.

“Clear direction and inclusive leadership is vital. Leaders must paint a bold, inspiring vision of where they want to get to, and then break this down into small, simple steps that each individual employee can act on and take ownership of immediately.

“Measure progress, show employees the impact that they’re having, and you’ll be amazed at how far employees are willing to go to help you achieve your goals.

“According to a recent study by Cone Communications, an American public relations and marketing agency, 79 per cent of millennials say they consider a company’s environmental and social commitments when deciding where to work.

“As times get tough, businesses need to retain talent more than ever – replacing staff costs on average £5,311. So actively showing staff how they can help their company to reduce its environmental impact has a double benefit: cutting environmental costs and reducing turnover.”

The greater importance a business places on energy efficiency in every decision, the greater the impact will be on long-term business efficiencies and long-term competitiveness.

Download a free energy report here and for more information on energy saving solutions, visit eonenergy.com

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