By Marc Karell, Climate Change and Environmental Services, LLC (CCES)
Well, we are early in 2012, meaning the release of surveys and other studies assessing sustainability in 2011. The MIT Sloan Management Review Report was recently released (http://sloanreview.mit.edu/feature/sustainability-strategy/). According to their survey, corporate sustainability programs grew markedly in 2011. About 70% of nearly 3,000 executives surveyed said that sustainability was on their management’s agenda in 2011, and will probably remain so permanently. Two-thirds of those managers surveyed said that sustainability-related strategies are not only beneficial economically and image wise, but are necessary to stay competitive. 24% of those surveyed meet their criteria of “Embracers”, companies that have incorporated sustainability in the management agenda, have a business case for sustainability within their company, and feel that sustainability is a competitive necessity. About 31% of those surveyed meet their criteria of “Harvesters”, companies that have begun a sustainability program and realize the business case, but have not made it a far-reaching or permanent part of the culture.
What is especially telling in the survey are the corporate motivators cited to become more sustainable. The greatest motivating factor, according to the survey, was the credence that customers prefer sustainable products and services (41% of those surveyed). Political pressure (35%) was next, followed by resource scarcity/price volatility (30%), competitors’ sustainability programs (28%), and stricter requirements from customers along value chain (26%).
A study by McKinsey & Company shows that energy efficiency is particularly profitable.A well-organized energy efficiency program will generate an internal rate of return, on average, of about 17% and would result in meeting a significant percentage of the greenhouse gas emission reductions needed to meet Kyoto Protocol targets. If just the garnered profits were reinvested into other greater-cost strategies, then total global Kyoto goals can be met at no net cost. These days a 17% return on investment is just too good to ignore. This is not an environmental group talking, but a leading global business management firm. This and additional studies prove that being more sustainable is not a cost sink, but improves the bottom line of business and society as a whole, driving further growth. This is a great opportunity for environmental managers to lead the way in a program that goes beyond compliance, but something that adds directly to the company’s bottom line.
CCES technical advisors can help you start a smart sustainability program from scratch or to move yours along more smoothly and to develop and implement smart, feasible energy efficiency projects to generate direct business benefits for your company and for your stakeholders. Others are doing it. Contact us now.