Sustainability is one of the latest buzz words in business today. But what is sustainability as applied to businesses and isn’t it an unnecessary additional cost?
Sustainability in most people’s eyes is about ‘green’ issues. Phrases such as global warming, carbon footprint, energy reduction all spring to mind but sustainability when applied to a business should be a business philosophy and strategy. One definition of sustainability is that it is the process of protecting your business from the risks of today, and ensuring that your business can respond to the challenges and opportunities of tomorrow. This can encompass for instance embracing the challenges of changing technology, reducing waste, streamlining supply chains and many other processes.
So what are the benefits of a sustainability strategy?
A Carbon Trust report carried out by McKinsey shows that businesses adopting a sustainable strategy can drive business value by up to 80%. Indeed it also shows that failing to implement these policies and practices does serious damage to your business and can reduce its value by 65%.
The UK Climate Change & Sustainability report on spending over the next 3-5 years shows that this market will grow rapidly expecting a 14% increase in spending by 2013. This can provide a substantial growth opportunity for those willing to develop this market.
Businesses in general pay for over 30% more energy than they need. This 30% is wasted through buildings, machinery and process that are not optimally designed for peak efficiency. With increasing cost of energy this will increasingly become a substantial burden on business.
More and more buying organisations from Government departments to big business require their suppliers to be sustainable and be able to show their credentials in this area before they will do business.
Whilst there may be some initial additional costs in order to develop a sustainable strategy it can be seen that the benefits are substantial and will easily outweigh any costs.