Sustainability leaders embed real, measurable, ongoing commitments to sustainability practices as a strategic differentiator, going beyond the immediate benefits of compliance, obligations, and efficiency.
Earth Day has its mission: “to raise support for a more sustainable future as climate change continues to wreak havoc across the globe. A sustainable society will only come about through the accumulated actions of billions of individuals.
Essentially, Earth Day reminds us of sustainability and perceive nature as something that sustains us and nurture us spiritually, psychologically, and emotionally.
What is
sustainability anyway? From wiki: Sustainability is the capacity to endure. For
humans, sustainability is the long-term maintenance of responsibility, which
has environmental, economic, and social dimensions, and encompasses the concept
of stewardship, the responsible management of resource use. In ecology,
sustainability describes how biological systems remain diverse and productive over time, a necessary
precondition for the well-being of humans and other organisms.
Long-lived and healthy wetlands and forests are examples of sustainable biological
systems.
1. Environmental Responsibility
1) From Compliance to Leadership
Compliance
with government regulations is a key external driver and the legally required
must-do tasks for business today. Engaging with sustainability to meet
obligations in environmental responsibility will decide business decisions and
options to meet regulations, then for efficiency and ultimately for market
leadership.
- Reducing energy use & waste
& Emissions in operations
- Managing corporate reputation
for sustainability
- Proactively responding to
regulatory constraints or opportunities
- Leveraging sustainability of
existing products to reach new customers or markets
- Improving employee retention
and/or motivation related to sustainability activities
- Mitigating operational risk
related to climate change
- Achieving higher prices or
greater market share from sustainable products
- Committing R&D resources to
sustainable products, managing the portfolio to capture trends in
sustainability
2) From
Practitioner to Advocate & Educator
When we look
at the hyper rising costs of energy in recent years, it is probably the top three most expensive
unmanaged cost for any Fortune 500 company, and especially become the biggest
concern for many energy-dependent businesses, they need to become advocates and
educators for corporate-wide environmental sustainability initiatives, also
transcribes a path that converts outside concerns into inside engagement, it
becomes a significant component of every business decision large or small, focus on growth, reputation management, and
return on capital. It also needs an integrated view that blends
financial, environmental, and social performance.
From businesses
governance discipline, organizations are disclosing significantly more
nonfinancial information that underpins how value is and will be created.
Disclosures include detailed plans for low-carbon products and services, and
employee incentives to reduce greenhouse gas emissions.
2. Economic Demands:
1) Sustainability: From Nice to Have to Must-Have
Efficiency
has been a key internal driver for sustainable practices and is the low hanging fruit
when moving beyond compliance and obligation. Waste of resources is costly.
Reuse and reduction of waste reduce cost and creates new revenue streams to
impact both bottom-line and top-line business growth.
The business
barriers need to be overcome in sustainability management:
- Lack of incentives tied to
performance on sustainability initiatives
- The pressure of short-term earnings
performance is at odds with the longer-term nature of sustainability
- Lack of, or use of wrong, key
performance indicators (KPIs)
- Insufficient data or information
to implement initiatives
- Sustainability isn’t integrated
into existing key process & performance management system
- Company leadership sets
sustainability as too low a priority, business units are not engaged with
implementing sustainability initiatives
- Sustainability the department is disconnected from the rest of the organization or is too low to be influential, the company lacks the right capabilities and/or skills
2) Embed Sustainability into Business
Process & Operational Excellence
Sustainability needs to be embedded into key
business processes and business makes the decision with an integrated view that
blends financial, environmental, and social performance, to gain business
insight, with which to manage the risks and opportunities in the future.
The
methodology and roadmap for sustainability management are designed to evaluate
a company’s sustainability opportunities and risks throughout its extended
value chain. It also can be used to drive innovation efforts in the development
of a holistic sustainability strategy.
• Operational input/output analysis: Examines critical inputs
(e.g., materials, energy) and outputs (e.g., finished products, greenhouse gas
emissions, water pollutants), giving leaders a picture of the impact
sustainability efforts have across the company
• Profit and
loss sensitivity analysis: Helps identify the bottom-line impact that
sustainability issues (e.g., energy price fluctuations) have on a business
• Regulatory risk analysis: Helps leaders anticipate both the
current and likely future laws and regulations that might affect a company’s
operations
• Customer and competitor analyses: Helps uncover sustainability
priorities of the company’s key customers and competitors
• Brand
positioning analysis: Helps assess customer sustainability priorities against
product attributes and brand positioning
• Value
chain analysis: Consider how the change to link in the value chain affects the operation, also achieve a new perspective on sustainability.
• Innovation analysis: Looking at sustainability as a driver of innovation — looking beyond the company’s walls to the ecosystem of opportunities and risks posed by the dynamic set of industry partners.
• Innovation analysis: Looking at sustainability as a driver of innovation — looking beyond the company’s walls to the ecosystem of opportunities and risks posed by the dynamic set of industry partners.
3) Using IT
to Drive Sustainability
Essentially,
a key piece of information—information around environmental and social
concerns—has been missing from most business operations. Therefore, IT can play
a lead role in improving corporate sustainability performance to ensure the long-term economic success of the enterprise. The commitment to doing this
needs to start at the highest level of the organization, with sustainability
becoming integrated into the corporate strategy, which is supported by the
overall IT strategy.
Information technology can collect, analyze, monitor, mitigate,
and monetize resources within an enterprise and across its value chain, not
only in the aggregate, but also across their operating units, allowing them to
identify opportunities for improvement. They are able to compare themselves
against industry norms to determine and report how they rank competitively in
their overall sustainability performance.
3. Social
Equity
The classic
definition of sustainability is “meeting the needs of the present without
compromising the ability of future generations to meet their own needs” well
articulate the social pillar in sustainability.
Social
Equity is defined as "equal
opportunity, in a safe and healthy environment." Social Equity is the
least defined and least understood element of the triad in creating
sustainability - balancing economic, environmental, and social equity. Social
Equity is the perceived value of individual, organization, or brand reputation.
it includes the impact on the social systems within which the organization
operates. Following categories are included:
- Labor practices: Impacts on the workforce, including labor/management relations, health, and safety, training and education and diversity, investment and procurement practices, child and forced labor, security practices.
- Society: Impacts on communities,
including corruption, public policy, and anti-competitive behavior.
- Product responsibility: Includes product health and safety, information and labeling, marketing and privacy., etc.
Sustainability leaders embed real, measurable, ongoing commitments to sustainability practices as a strategic differentiator, going beyond the immediate benefits of compliance, obligations, and efficiency.
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