In October, sustainability consultant and former federal Green Party leader Jim Harris presented the business case for sustainability to delegates of the CIMA Canada Conference 2012. Mr. Harris put forward the argument that sustainable business practices weren’t just a matter of ethics, but also tools for cost reduction and profitability, citing several studies and examples that proved his thesis. However, he also noted that few organizations have adopted sustainability practices because the issue simply isn’t on their radar. He recently spoke with the Financial Post’s Dan Ovsey about why he believes this to be true and what he sees as the biggest barriers to sustainability. Following is an edited transcript of their conversation. [...] … [Read more...] about Identifying barriers to adoption of sustainable business practices
Our first blog, How Sustainability Can Save Business, reframes the common purpose of traditional Corporate Social Responsibility (CSR) practitioners -- that of "saving the environment." Our premise: Given the social and economic frameworks and institutions of our society, more can be accomplished (and faster) by viewing sustainability as an economic opportunity relevant to business, compared to viewing it as an environmental initiative in isolation of business. Therefore the goal of "saving the environment" may be more appropriately framed as "saving business." Our perspective is pragmatic; that the worthy purpose of "saving the environment" is destined to be ineffectual, and at best immaterial, if environmental initiatives are pursued in isolation of the economic engines and structures of our society -- that is, capitalism, business, government and the active participation of other organizations and individuals within this framework. It is within this framework that companies are applying a central guiding principle to their business sustainability strategies -- "derive economic benefits from improved environmental and social outcomes." Why? Because it delivers results. We do not argue the desired outcome of healthy people and a healthy planet, and an economic framework that includes a broader social purpose. Indeed, we align on these values. After all, Jim was leader of the Green Party of Canada and Tyler used to earn his living as a conservation … [Read more...] about How Much Can Business Influence the Environment?
Chief Financial Officers (CFOs) and Chief Operating Officers (COOs) are increasingly accountable for sustainability. A study by Deloitte -- Sustainability: CFOs are coming to the table -- found their accountability for sustainability had jumped sharply during the last year. In 2012, 26 per cent of CFOs were responsible to the board for their firm's sustainability strategy, up from 17 per cent in 2011. Similarly, for COOs it was 10 per cent in 2012, up from 3 per cent in 2011. Further, 53 per cent of CFOs said their involvement had increased in the last year, with 61 per cent noting they expected it to increase over the next two years. The increasing relevance of business sustainability to financial performance and shareholder value was also highlighted in a recent study by the Chartered Accountants of Canada (CAC) -- Sustainability: Environmental and Social Issues Briefing, which noted that "key environmental issues, stakeholder trust and relationships and an evolving environmental and social legal and regulatory landscape are interconnected and impact strategy for competitiveness, risk and resilience." The report draws attention to the many environmental and social issues of relevance to directors in discharging their oversight responsibilities, including strategy, risk and risk oversight, financial performance, external reporting, and the reliability of reported information. When Canadian Tire began reporting its environmental footprint and the … [Read more...] about Why CFO’s Need to Care About Sustainability Now
"Culture eats strategy for breakfast, every day." This was Tyler's response to a question during a panel session at a recent conference. The panel was discussing the challenges faced by professional managers in their efforts to implement sustainability into business. The other challenge under discussion was about finding the appropriate balance between sharing insights and strategy with others, versus holding some things back for the competitive reasons. Tyler's comment was relevant to both. His point: having a strategy is one thing, but being able to implement it is entirely another. After all, the value of a strategy is not what is written on the whiteboard or the back of napkin, it is the value unleashed by engaging the minds and hearts of motivated employees and suppliers. The key to unlocking this value is to understand and harness the corporate culture, work within its bounds and value system, while making room for new ideas. Enterprise Risk Management colleagues refer to the ability to implement a strategy (or not) as "execution risk." Tyler has been fortunate to have had the experience of developing and implementing business sustainability strategies over the past decade in three different, very large corporations: a $14 billion company, a $400 billion company and Canadian Tire, a $12 billion company. In every instance he had to tailor his approach to the culture's unique value system and the process by which ideas are accepted into the … [Read more...] about Why Culture Eats Strategy for Breakfast
Using sustainability as strategy can drive change within a company's supply chain by engaging suppliers and service providers with the resulting savings running into the millions of dollars a year. A case in point: one of Canadian Tire's most popular products is a six-foot folding utility table, selling many tens-of-thousands a year. The company collaborated with its supplier on product redesign and packaging to use less raw materials to make and package the product. Now, the tables use 11 per cent less plastic in their construction and occupy 15 per cent less volume for shipping. The annual savings for Canadian Tire: more than $375,000 a year as a result of reduced material, packaging and shipping costs. Employee Engagement Sustainability as strategy can also engage employees. In 2010, Canadian Tire's Senior Vice President of Merchandizing invited all the company's buyers to the conference centre for an afternoon departmental meeting. Employees thought it was to discuss organizational restructuring. Before the start of the meeting, the conference centre was very quiet. The goal, it turned out, was to engage buyers in a creative way -- to shake things up -- to facilitate some disruptive innovation on something that should have been a core element of their business activities, but at the time wasn't. Corporate thinking is often to execute on a perfect plan -- in this case, we wanted to take buyers out of their usual, comfortable environment and see … [Read more...] about A Little Less Cardboard Can Save You Millions
Many Canadians are trying to do more with less during this economy of thrift. But we all face essential expenses -- those costs associated with "keeping the lights on" -- often, literally. Whether you're managing a household or a large corporation, energy -- that stuff that enables your car to move from one place to another, keeps your beer cold and your shower hot -- is generally regarded as an essential expense. Sure, you could drink warm beer and take cold showers; but really? There's got to be a better way. During a poor economy, it can be a challenge for a business to increase profitability as competition for the "cautious consumer" intensifies and there is increasing pressure on margins. But a recession offers the perfect opportunity to question the way things have always been done -- and drive out waste and inefficiency. One of Jim's favourite slogans is: "a crisis is a terrible thing to waste." While most are cautiously optimistic about the North American economy today, it was a different story in the latter half of 2008 when Canadian Tire launched its Business Sustainability Strategy with an aspiration to profitably grow the business without increasing energy use or contributing to an increase in the carbon footprint of the economy. And the company has been somewhat successful: energy and fuel used to move product from vendors to stores is nine per cent lower, despite a 22 per cent increase in tonne-km of product shipped. And energy use for buildings and … [Read more...] about In Business, Don’t Waste a Crisis
It is surprising just how big is the "sustainability" opportunity is. In just the energy efficiency (EE) field McKinsey & Company estimates that $2 trillion can be invested in EE by 2020 with an internal rate of return (IRR) of 17 per cent. To put that into perspective: that rate of return is better than investing in the stock market or in real estate over the long-term -- the two investments we're always told give the best long-term returns. The net effect would be equivalent to cutting the need for 64 million barrels of oil a day -- about one and a half times today's entire U.S. consumption. [...] … [Read more...] about You Are Better Off Investing in Sustainability Than Stocks
Decades of experience have shown that environmental initiatives pursued in isolation of the economic benefit are largely immaterial. But when environmental objectives are framed as business strategy and tied to business operations and measured in terms of cutting cost and increasing profitability -- significant environmental benefits are generated. And so we believe that environmentalism can save business, as the more powerful engagement tool that business has at its disposal to drive innovation. This is the first of a series of weekly columns to be published on Tuesday by Tyler Elm and Jim Harris on how sustainability as strategy cuts cost, raises revenue and mitigates risk for business. Ever since Rachel Carson's groundbreaking Silent Spring was published in 1962, environmentalists have been trying to save the planet. While there has been progress, overall the efforts have clearly failed, because the planet is in worse shape today than 50 years ago. We need not document the litany of damage here. Decades of experience have shown that environmental initiatives pursued in isolation of the economic benefit are largely immaterial. But when environmental objectives are framed as business strategy and tied to business operations and measured in terms of cutting cost and increasing profitability -- significant environmental benefits are generated. Sustainability then garners executive focus and corporate resources. Companies like General Electric, Interface … [Read more...] about How Sustainability Can Save Business
Some executives believe the myth that going green is expensive—and I don’t blame them. When Conservative MP John Baird was Environment Minister, he told a 2007 Canadian Senate hearing that meeting our Kyoto goals would manufacture a recession. I ran into John in Toronto shortly thereafter and asked if he’d seen the just-released McKinsey & Company study showing that 40 per cent of the CO2 we have to cut in North America to meet our Kyoto goals would be highly profitable, and if society invested those profits in the next lowest-cost solutions, we’d get all the way to achieving the Kyoto targets at no cost to society. He hadn't seen the study and wasn't interested when I offered to send it to him. [...] … [Read more...] about Going green is expensive – myth or not?
My latest column in Green Building and Sustainable Strategies (Spring 2012) is focused on the plan Sears implemented, as well as the astounding savings they have received, it truly is a plan more stores and companies must take on. Please find my column at http://bit.ly/JCjDb8 pg 32 … [Read more...] about LED Retrofit Revolution Signalled by Sears $4.5M Lighting Project