Building Leadership In Sustainability

By M. Isi Eromosele

Sustainability is often considered nice to do when convenient, but it can actually reward both the top line and the bottom line. Consider these results from three companies that embed sustainability practices throughout their operations.

The Dow Chemical Company, which created a Sustainable Chemistry Index, increased its sales of sustainable chemistry products between 2009 and 2010, rising from 3.4 percent to 4.3 percent of all revenue. By 2015, it expects such sales to be 10 percent of revenue.

SAP, which established 400 sustainability metrics embedded in its processes, saved $250 million between 2008 and 2010 in energy costs. It expects absolute energy consumption to remain at 2000 levels through 2020, despite continuing global expansion.

Intel saved $136 million in 2010 from 11 employee environmental projects, and the company includes environmental performance goals throughout its operations, extending to its global value chain.

Dow, SAP, and Intel share a common understanding of how to advance on sustainability over the long term: It is not a separate function or activity but a core value embedded in the company. The environmental and social impact of products and operations is integrated with how the enterprise creates economic value. Through strategy and systems that provide useful information and meaningful incentives, each part of the business understands how it contributes to the company’s long-term success.

Sustainability should be systematized in our business management and our operational execution.

You can think of sustainability as a feel good issue that you can support when it’s convenient to do so. Or you can think of it as the emerging context in which businesses must operate as customers engage more with the concept of being green, as competitors adopt sustainability practices for business advantage, and as governments regulate behavior to reduce pollution and ensure long-term stocks of raw materials, or to seek more positive relationships between society and industry.

Extend Sustainability To Industry Value Chains

The sustainability efforts of any one entity can have a limited impact and can put a business at a disadvantage if others in the value chain, upstream or downstream, do not act. Often the actual impact of any individual sustainability behavior is unclear, beyond those activities that have a direct cost, such as the purchase of paper and electricity.

The good news is that awareness of sustainability issues, coupled with customer pressure and government regulation, is causing entire business networks - value chains and cross industry groups to act together to adapt their processes to support sustainability. This joint action is becoming increasingly possible as standards emerge to measure and value the sustainability attributes involved, such as energy efficiency, carbon emissions, water usage, resource renewability, labor practices, trade practices, and social impacts.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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