Surviving With Sustainable Growth

As environmental demands increase, companies must change efforts from opportunistic to efficient

By Phillipe Tesler

U.S.-based companies are increasingly feeling the pressure to adopt corporate responsibility from far and near. From afar, European and Asian countries continue to enact stringent regulations that will inevitably be emulated here. Closer to home, many state governments are taking the lead in requiring the reduction of greenhouse gas emissions and aggressively addressing other issues of corporate responsibility.

As these pressures mount, it’s not just fines and other sanctions that will be at stake, but your company’s reputation, competitiveness and profitability. Earn a reputation for corporate irresponsibility and you risk degrading the value of your brand and, ultimately, your company. Fail to consider whether your products are green enough to suit the increasingly sizeable number of consumers who care deeply about such things and you will lose market share to greener competitors.

At the same time, however, you must take care to remain profitable in the face of some potentially expensive new burdens: the exploding costs of energy and raw materials, new recycling obligations and the need to offset carbon emissions.

In fact, U.S.-based companies—and their corporate responsibility officers (CROs)—stand at a crossroads. They can regard sustainability merely as an issue of compliance or they can see it for what it really is—a question of survival in this demanding new environment. Those who grasp the magnitude of their company’s vulnerability know that it’s no longer about PR but about performance. To achieve the level of performance required by these new realities, you must incorporate the values and procedures of sustainability into all of the core processes of the company. Otherwise, the effort will remain merely opportunistic rather than efficient, reliable and effective.

Nevertheless, few companies actually provide the CRO with the necessary resources to make sustainability stick. They’re applied a Band-Aid when what they need is a CSR Marshall plan: significant infusions of people, money and information systems.

It’s unthinkable to try to run the finance function of a global corporation with a handful of people, yet we often see CROs expected to manage their equally ubiquitous function with two or three people, a derisory budget and nonspecific information systems largely consisting of email and spreadsheets.
Companies with limited resources, however, might find pursuing a full-scale CSR Marshall Plan out of the question. But savvy companies can do the next best thing: use IT as the ultimate, cost-effective enabler of enterprise-wide change. Total AS Chemical Group, for example, uses environmental software in 29 countries.

Previously, the company compiled spreadsheets from 350 chemical sites around the world, with the data collected only once a year and often plagued by errors, duplicate entries, numerous consolidation files, sparse metrics and limited analytical capabilities.

The company can now analyze results along many dimensions, readily produce auditable reports and monitor greenhouse gas emissions by four types and water emissions by ten types. Their environmental report integrates 400 yearly and 10 quarterly key performance indicators—a degree of comprehensiveness that demonstrates the depth and breadth of their commitment to sustainability.
How can you tell if your company is serious? Simply ask yourself whether leadership is committing the requisite people, money and IT to the effort. As the Total example suggests, one of the best barometers of genuine commitment lies in information systems.

Companies that translate sustainability and nonfinancial measures of performance into metrics and track them systematically and in real time throughout the company—as only sophisticated information systems can—are clearly serious about weaving sustainability into the fabric of the organization. As the business truism rightly says, what gets measured is what gets done.

Companies that make the commitment now will be well positioned for the next tidal wave in CSR: the extension of responsibility to the supply chain. Increasingly, customers and other stakeholders are holding companies accountable not only for their own sustainability performance but also for that of their suppliers and partners.

Unless you prepare now, you could find your company’s reputation, competiveness and profitability put at risk by companies over which you have little control. The winners in this ever more demanding world are likely to be those companies whose CROs, when first standing at the crossroads, chose the path of performance, and stay the course.

Philippe Tesler is Co-founder and Head of Business Development for Enablon, a sustainable development and EHS reporting and management software solutions provider. He has worked in the e-Business, environment and services sectors for more than 15 years.