Sustainability policy has long been seen by many companies as more of a compliance burden than an opportunity for commercial gain. This paradigm is shifting though and sustainability practice and corporate social responsibility (CSR) policy is increasingly being seen as a driver of commercial success and business growth. The ubiquity of ethically motivated consumers is also feeding into this at a public relations level, with companies staking the credentials of their CSR policies against those of their rivals.
In this article I want to look at how good sustainability policy isn’t about jumping through regulatory hoops, but should be seen as a central pillar of your business model.
Many manufacturing companies are incorporating sustainability practices and data gathering into their business models at a strategic level. This goes far beyond box ticking and marks a shift away from predominantly ‘defensive’ sustainability policies towards ‘offensive’ ones, where commercial interest and profitability are the driving forces. Indeed, a business-wide sustainability policy has the potential to open up new commercial opportunities in everything from product innovation to energy efficiency and reduced raw material usage.
To a large extent, this is a natural result of companies, especially those in manufacturing, adopting a triple bottom line (TBL) approach to business growth. Coined by John Elkington in 1994, TBL is an accounting framework that extends the financial bottom line to include social and environmental impacts. A host of interconnected shifts in consumer behaviour, compliance, public awareness on climate change, as well as advances in technological systems such as the Internet of Things, could now be causing the level of interrelation between these various ‘bottom lines’ to increase drastically; namely the pivotal relationship the financial bottom line has with social and environmental impact.
“Environmental, social and compliance factors are becoming increasingly central to companies’ ability to operate successfully,” says Chief Sustainability Officer at thinkstep, James Fava. “At the same time, value chains and product life cycles have become ever-more complex, not just because individual issues are now more in the spotlight, but because these issues are increasingly interacting with each other.”
These complexities have a lot to do with data and the increasingly complex task of collecting, mapping and interpreting it across an entire organisation.
Understanding Data Topologies
Effective sustainability policy requires effective data gathering and this all starts with the task of building a detailed three dimensional data topography across all business functions. Only by understanding what data is being collected at a business-wide level can you begin to create strategies around how this data can work together.
A common error when data mapping is identifying a potential efficiency and collecting only the data that you need to drive home that efficiency. Silo mindsets like this are common in large organisations and good sustainability policy needs to seek to break down these walls. Getting an accurate data topology will help you see the interrelationships between different areas of the business, so make sure you ask people for the data they have, not the data you need.
“Reducing energy usage across an organization may incorporate the entire supply chain and may include a much broader spectrum of functions such as transportation of raw materials and products, shutdown and turnaround scheduling”, says Dan Roessler, chemicals industry manager at Aspen Technology.
The more data you can accurately map, the more insight you can get into how individual areas in the supply chain impact other areas of the business. This is crucial to driving efficiencies that aren’t simply contained to the business, but impact your suppliers and customers as well. Remember, there is always a public relations element to CSR policy and your programme should be able to link up with your wider corporate marketing strategy, so your customers, partners and suppliers are kept informed.
Employing the Right Tools for the Job
The greatest challenge your organisation will face when it comes to implementing sustainability policies at an organisation-wide level will always be centred around data migration and unification. Different parts of your organisation will track and collect different data, for different reasons, often in different software packages and systems. Pulling these fragmented datasets together requires joined up thinking and processes, but crucially it also requires having the right tools in place and an understanding of what you want your output to look like.
There are a huge number of sustainability data management software solutions available that allow you to track, migrate and standardise data collected across disparate parts of an organisation. Selecting the right tool is no small undertaking and requires a good deal of planning if you are to pick the right package, with the right modules and add-ons in place. You’ll also need to know who will be using the software, what kind of reporting you want to get out of it and how much training will be required for those who will end up using it.
In an ideal world, the ethical and moral imperative of environmental protection and lower carbon emissions should be all the motivation companies need to put their sustainability policies centre stage, but of course we don’t live in an ideal world. Instead compliance and regulation have been introduced to force companies into thinking about their CSR and sustainability policies.
This legislation driven approach to corporate sustainability policy is now evolving into something more organic, driven by commercial expediency, as companies wake up to the huge benefits of developing their sustainability policies. As big data and technological advancements continue to enable and empower this revolution, we can only hope that this revolution continues to spread.
By Nicola Ainger, project manager at SustainIt