Corporate SOS: Business Value of Sustainability

In 2012, there was a sea change in the evidence for sustainability’s business value, especially when it comes to the market value of the company.

Key Sea Change Takeaway: Sustainable companies perform better than other companies over the long-term. This is true whether you measure stock market or traditional P&L performance.

Clearly, the business case for a particular sustainability project depends very much on the project and the company. In particular, it’s easier to quantify the business value for many efficiency or waste reduction projects.

Succeeding on Sustainability (SoS): Innovation is Key

Innovation is the key to business success in corporate sustainability programs.

A recent report on corporate sustainability practices worldwide found that the most common theme among successful sustainability programs is innovation. This has been central to InnovaStrat’s approach for several years.

The kind of sustainable innovation we are talking about is not just research and development. While this is significant, what matters even more is sustainability-driven innovation around business practices. The report concluded that this kind of innovation is most important.

Sustainability Champion: Finding the Business Value

Yesterday, I talked about the different reactions that business functions have to sustainability and the need to get these groups on the same page. There are two key elements in a shared viewpoint that lead to business value from sustainability.

First, the shared viewpoint needs to reinforce the core strategic strength, capability, or competence of the corporation. This involves a shift from the mindset that sustainability is just for society or the environment’s sake, to one that advances the core value proposition of the company. When you start looking at sustainability through this lens of core strengths, you begin to speak the language of business. You can then tailor this language to the dialect of each distinct business group in the company and inspire every employee in the company.

Sustainability Champion: Common Ground on the C-Level

As a sustainability champion, one of the very first challenges you will face in making sustainability central to your business is: “how should my organization think of sustainability?”

For a field that has been around for about a decade, it’s amazing how many different views there are on what it really means. Nearly every business function has its own perspective on it. One function thinks it’s all about carbon emissions and climate change. Another, that it’s all about energy efficiency and renewable energy.

Accelerating Sustainability in Business

Call me optimistic, but the sea change in corporate sustainability seems to be gaining momentum.

Hurricane Sandy is the prime example of an event that drew attention to the perils of climate change.
But there are other, less obvious events of 2012 that are driving this sea change.

The Rio+20 conference in June this year, despite its modest achievements at the government level, had many important developments. For the first time, it became obvious that the real driver of a more sustainable world is going to be business. The spotlight is now on corporations to drive the sea change, which is great for business.