Working toward sustainability is about quality and innovation. About co-operation and working in a forward-thinking manner. About welfare and well-being. Running a responsible business is about more than looking at the profitability figures. It’s about finding the balance between people, planet and profit.
These three well-known pillars have become intrinsically and irrevocably intertwined. That said, identifying that sustainability has become a major trend is one thing, but is also a ‘must’?
At many large companies, sustainability is fully integrated in the strategic agenda. And we’re now seeing a transformation in the SMB segment as well. For smaller companies, it began with more of a marketing flavor (‘green-washing’), but the middle segment of the economy is now increasingly making the effort to integrate it fully at the top strategic level.
You also see more and more sustainability-oriented initiatives like ‘cradle to cradle’, CO2-impact-measuring and ‘social return’. In the transport industry, there are ‘Lean and Green’ stimulation programs for businesses and government. They stimulate organizations to grow towards a higher level of operational sustainability, looking not only to measures that will generate cost savings, but will also lead to less pressure on the environment.
Lean and Green allows companies to show that they are actively tackling environmental issues and committing to making their transportation processes more sustainable – using a plan of action to demonstrate how they can realize a 20% reduction in CO2 emissions within 5 years.
The Top 3 ‘do’s in logistics
So, what are the top ‘do’s in logistics when it comes to being more sustainable?
- Make it strategic. It’s not a project from the marketing department. Sustainability needs to be supported business-wide. It’s currently reactive for many businesses, and the switch needs to be made to proactive. Beware though – if it’s only issued from the top down, you’re unlikely to create any lasting changes in the organization. Get employees from all areas of the business involved and let them play an active role.
- Invest where possible in sustainable raw materials without finite availability
- Discuss and commit to key performance indicators (KPI’s)…
KPI’s key to success
So what are the right KPIs for managing sustainability? In every sustainability project, whether it concerns a reduction in CO2 emissions, paper usage, or supply chain waste, choosing the right KPIs is a key component for success. A few things to keep in mind when determining what those KPIs should be:
- Choose KPIs that align with your business strategy.
- Start small, think big: choose just a couple to start with. This stops you from looking at all the possible indicators that you could measure, and forces you to focus on those identifiers most fit for purpose.
- Choose KPI’s that are relevant for your stakeholders.
- Choose KPI’s that are measureable, but don’t make that the guiding light – they also need to be the most important ones.
- Consider industry specific KPI’s.
And some examples?
- Initiatives to reduce greenhouse gas emissions and reductions achieved
- Percentage of materials being recycled
- Energy saved due to conservation and efficiency improvements
- Percentage and total volume of water recycled and reused
- Total weight of waste by type and disposal method
Sustainability – a must
It’s absolutely my opinion that businesses that do not commit to sustainability initiatives will eventually pay a penalty with consumers and investors alike. Sustainability may be considered a trend by some, but it’s already become a must for many.
Jeff Immelt, CEO of General Electric and one of the most influential business leaders in the States, puts it as follows: “If you want to be a great company today, you also have to be a good company”. There are, however, remarkable examples of major enterprises lagging behind.
Amazon, for example, appears to be doing far less than some of its blue chip peers. You’ll have some serious difficulty trying to find a sustainability report on their website. The non-profit group Climate Counts studies the world’s biggest businesses’ impact on global climate. Amazon are near the bottom of the list, and have been since it started in 2007. Amazon don’t work with the Carbon Disclosure Project either; last year 81% of the companies in the Global S & P 500 took part in the organization’s study.
Amazon’s commitment to sustainability appears a long way behind businesses like Google, Microsoft and FedEx. I have to wonder whether the company will eventually come under pressure from nervous investors. Will that then be enough to stimulate adjustments in their sustainability policy? For many businesses, waiting for that tipping point may already be too late.