Sustainability: The Competitive Advantage

Unless forced by regulation many small to mid-sized organizations may only consider the adoption of a sustainability strategy based on documented financial value. Often leadership considers the principle objective of the organization to be profitability, and they see new or stricter environmental regulations and/or higher demands from customers and stakeholder about sustainable products and services as profit inhibitors.

Business history has proven that change always provides new opportunities. Yet, organizations of all sizes can still be closed minded to change and new ways of thinking. Defining what new opportunities an organization can generate from a strategy of sustainability is a trade up not a trade off. It has been documented in many studies that an integrated strategy of sustainability can lead to measurable results and financial benefit.

Depending on your organization the opportunities for enhanced business can be dramatic. A recent study by Boston College Center for Corporate Citizenship and the Hitachi Foundation (published in 2010) verified several business opportunities generated by sustainability initiatives. This research to provides a comprehensive view of small, medium, and large sized U.S. businesses.

The State of Corporate Citizenship in the United States 2009, surveyed 756 executives. 36% of the sample represented small companies (1-99 employees), 24% represented medium companies (100-999 employees), and 40% represented large companies (1000+ employees).

  • 72% of the companies surveyed are reducing costs through improved materials efficiency
  • 58% are manufacturing or sourcing domestically/locally
  • 53% are increasing brand awareness as “green” or socially responsible
  • 52% are designing and offering sustainable products/services
  • 50% are providing customers with more information about products’/services’ social and environmental impacts
  • 48% are offering more energy efficient products/services
  • 46% are providing frontline employees with business training to broaden and improve commercial awareness
  • 22% are using sustainability as a market differentiator

Every outcome listed above has a direct and positive impact on a company’s bottom line. When done properly, sustainability creates both a financial and competitive advantage.

The facts are simple—sustainability through environmental excellence is here to stay. It will remain a mega trend for an undefined period time as it morphs into the fabric of what businesses do every day. Your organization or industry may not be charged with regulations but it would be naïve to believe it is not possible. If your industry is lucky enough to remain unregulated, it is almost guaranteed that your customers and stakeholders will require you to change your business practices. Our research shows most companies will be faced with both regulations and customer/stakeholder pressure. William Mulligan, environmental affairs manager at Chevron Corporation, confirms our research. “Over the last decade, we have seen many polls confirming the importance of the environment to Americans. Only an irresponsible company would dismiss this trend as a passing fad or fail to recognize the need to integrate environmental considerations into every aspect of it business. Environmental excellence has to become part of strategic thinking. It is in our best economic interest to do so. In fact, whenever we are forced to change, we often find opportunities.

Tammy A.S. Kohl is President of Resource Associates Corporation. For over 30 years, RAC, through their Institute for Sustainability, has specialized in helping businesses define and implement a common sense approach to sustainability while achieving high levels of excellence and results. Learn how at www.theinstituteforsustainability.com or contact RAC directly at 800.799.6227.

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