Sustainability Mythbusters: Debunking the Sustainability Myths
Welcome to the Sustainability Mythbusters series presented by Schneider Electric. In this six-part series, Schneider Electric’s Global Sustainability Services team explores common misconceptions related to the topic of sustainability and presents a business case to “bust” each myth.
- Sustainability does not make business sense
Anyone who would say that there is not a business case for sustainability might want to talk to Cabela’s. The outdoor retailer saved more than $1 million in just two years by improving energy management and efficiency in 10 new stores.
Skeptics could also look at beverage company Brown-Forman, which expects to cut 350,000 annual truck trips in 2014 by moving its Jack Daniel’s distillery and warehousing operations closer together. Or they could look at Kittitas Valley Community Hospital, which saved $200,000 after simply taking the time to analyze and improve its energy usage.
There are plenty of dollars and cents examples out there that clearly lay out the business case for sustainability. Beyond that, however, is a long list of reasons that further strengthen the sustainability case; a list so long, in fact, that it turns this myth completely on its head and makes the exact opposite true. Sustainability makes complete business sense in myriad ways.
For starters, many companies these days have been experiencing increased demand from investors, shareholders, retailers and consumers for greater commitment to sustainability. And what starts as more demand often ends up becoming a requirement. For example, shareholder resolutions focused on sustainability have been on the rise over the past few years. Such resolutions may only inform discussions initially, but with enough support they often become mandates that not only call for but support sustainability initiatives.
For companies in certain industries, sustainability can be an imperative for doing business at all. Forestry companies must manage their timberlands for future harvests, and mining companies are often required to meet rigorous environmental standards in order to receive the licenses they need to conduct their business in the first place.
Likewise, more and more large companies are beginning to require a commitment to sustainability from their suppliers. The most well-known of these, Wal-Mart, launched its sustainability index in 2009 to begin rating its suppliers based on their own sustainable practices. The retailer expects to source 70 percent of the goods it sells in the US by 2017 only from suppliers who make sustainability cut. Those who don’t will be missing out on a big business opportunity: the average Wal-Mart store carries more than 120,000 items.
Sustainability also leads to gains in efficiency that ultimately results in cost savings. Hospitals that invest between $100,000 and $1 million in saving energy, for example — things like HVAC upgrades and lighting retrofits — can cut energy use by up to 20%. Those that take a more comprehensive approach have the potential to save more than 30 percent on energy costs and see their profitability rise.
Efficiencies aren’t all connected to energy, either. Being more efficient with other resources helps bolster the business case for sustainability as well. Consider the soda company that finds ways to save water in its production processes. Not only does it cut costs by reducing overall usage, but there is then less water that needs to be purchased, treated and transported. Minimizing waste also plays a huge role in maximizing efficiency and improving a company’s financial performance.
Sustainability makes a sound business case on a bigger level as well, in terms of risk management and business continuity. Climate change will likely impact all kinds of companies in the near future, whether it’s a Mexican tequila company facing a shortage of water or wheat producers enduring drought and wildfires. There are also extreme weather events, like Hurricane Sandy in 2012, to be prepared for. Committing to be more sustainable now can help brace for the challenges of the future. Companies who manage sustainability well are managing risk well and will be duly rewarded.
The business case for sustainability is no myth. It is real and can be measured in many direct and indirect ways. And while there are many companies out there who’ve made a real commitment to be sustainable and who are reaping the benefits from it, there are those who remain skeptical. That won’t be the case much longer: either they will see the benefits and make the shift — or be left behind.
Mike Fraser is the Vice President of Global Sustainability Services at Schneider Electric. Mike leads Schneider Electric’s growth initiatives in the area of sustainability consulting and services, including the company’s online sustainability and energy management software, Resource Advisor. Schneider Electric has a proven record of leading organizations to thriving sustainability programs across economic, environmental, and social dimensions. As a global leader in sustainability services, the company provides an unmatched end-to-end solution that encompasses every phase of the sustainability journey. Through our offering of strategy, technology, and implementation, Schneider Electric is able to drive successful sustainability programs that accelerate business performance. Learn more about Schneider Electric’s Sustainability Services at, https://vimeo.com/58187366, or email: email@example.com.
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