Where Even the Mighty Falter: Integrating Sustainability

We all know and understand the importance and significant impact sustainability has on businesses and communities. But do we truly understand its potential? In order for companies to reap the ultimate benefits, companies must integrate sustainability into every facet of the overall business strategy. In this four part series, we will examine how sustainability affects the bottom line and how to ensure your overall business strategy fully integrates sustainability at every turn.

The Biggest Benefits

Sustainability has three main impacts on the bottom line: increased efficiency, revenue growth, and customer preference. It’s really common sense when it comes to efficiency – when you use less energy, less materials, and have a leaner supply chain, your operating costs are less. But what is really important here is understanding the implications that embedding sustainability into your business plan has on your customers.

Here at DuPont, for example, we began producing new polymer-based materials for use in hybrid and electric vehicles, which allowed for lighter, more efficient energy storage options. These materials reduce the weight of cars, reduce energy consumption and emissions, and meet new auto industry regulations for lighter materials, thereby meeting the needs of automakers and allowing the company to increase revenue. In this case, sustainability was more than just a catalyst for innovation; it helped create products that would be more competitive in the current market, thereby increasing overall business success.

In the end, customer preference is key–in order to get people to buy, products or services rendered must meet market demand. But how does sustainability fit into this? Let’s take the case of FREITAG, one of the last industrial companies still in production in the city of Zurich that is run by two Swiss brothers.

Unsatisfied with the durability of available bicycle messenger bags, the pair wanted a functional, heavy-duty, water-repellent bag. So in 1993, they started a company to create one. Instead of sourcing the latest high-tech materials, they formed bags from old truck tarpaulins using second-hand car seat belts as straps[1]. The recycled materials, originally intended to lower their production costs and create an industrial strength product, generated a completely different reaction with customers.

It positioned FREITAG bags not only as green, by re-using industrial waste, but also as a personal commodity[2]. Though the bags were initially sold to bike messengers, the real interest came from the trendy and urban consumers who were willing to pay top dollar for green personality[3]. By incorporating sustainability into the entire identity of the brand, the brothers created a unique product for an entirely new customer market.

Keeping It Local

So what is the most important thing to keep in mind when developing a sustainable business strategy? Keep it local. This is often where many companies go wrong. One of the key elements to integrating sustainability into an overall business strategy is to think globally, but act locally. You can have the best sustainability strategy in the world, but your strategy will not work if you do not tailor it to the competencies, priorities and capabilities of the local market For example, what might work in Russia might not work in Indonesia due to differences in environment and geography, culture, language, regulatory standards, standard operating procedures, etc. You cannot design one strategy to fit markets with very different cultures or contexts.

You have to know and understand the local issues in order to extract the full value from a corporate sustainability culture.  In order to grow your company and expand globally, you must learn to adapt your strategies and programs. But learning how to tailor strategies to local regions and communities is often a challenge especially for large, global companies.

The Toughest Challenges

Once you define your strategy, the real work begins. As important as a clear strategy is, it will not be effective without strong leadership, a solid structure, and proper organization. We have found that it is best practice to appoint a chief sustainability officer and give her the responsibility to implement sustainability on the ground.

With a chief sustainability officer in place, you can ensure that the line managers are empowered to execute the strategy. To extract maximum value, we’ve found it best to give line managers the support they need and build an infrastructure around them to provide all the elements they need to do their job well. This infrastructure includes a supportive staff, integrated committees, motivational strategies and performance measurements. Communication, training, standards, audits and evaluations are also key. In order to be successful, sustainability must be truly integrated within the whole hierarchy of an organization, from workers to line managers, mid-level supervisors, all the way to the senior leadership. Another common pitfall for companies is in not compromising on environmental and social balance. It’s not an either/or when you are talking about making environmentally conscious decisions or profitable business decisions. You can –  and should – do both. Case in point, a company that focuses only on waste reduction, but does not have an overall strategy in place for energy consumption, will not save as much in the long run.

So a corporation’s transformation is really all about having a culture of sustainability. This means incorporating sustainability into the entire identity of the company and brand, while also developing a sense of ownership of sustainability initiatives within each and every employee.

The first step in enhancing the culture of a business begins with its leaders. My company works with many businesses across diverse industries, and I have consistently observed the overwhelming influence that leaders and their attitudes have on transforming the performance of a company. Leadership is the integrating force that makes standards and systems, the process by which they are managed, and the routine actions of the organization come together to create an effective and profitable business. Leaders are expected to demonstrate commitment and take actions for the well-being of their people across all levels of the organization. They must think, feel, and believe in the value and importance of incorporating sustainability into every single aspect of the business.

In this culture of sustainability, you also must have a culture of innovation. In next month’s post, we will explore the role that innovation plays in sustainability. Stay tuned.

Davide Vassallo is global practice leader of Environmental Management for DuPont Sustainable Solutions. DuPont™ is a trademark of E. I. du Pont de Nemours and Company.