Where is sustainability going in our industry? We have seen how important “green” or “environmentally friendly” products are, but there is much more to sustainability when it comes to business.
Business sustainability focuses on the balance and interdependence of 3 important areas. Let’s refer to these as the 3 “Ps” of sustainability: people, planet, and profit. This balance is also referred to as the triple bottom line, where all three components are positive to achieve true sustainability. In the past, I believe both our industry and the “sustainability movement” overall have focused overly on the planet portion, and this has skewed the balance.
Moving forward, I believe sustainability will (must) shift its focus, turning toward the other two Ps of profit and people to regain total balance while keeping our gains in the planet (environmental) area.
Sustainable Reporting
How do businesses profit from the principles of sustainability? The best way to do this is to see sustainability as a communication tool or even as a way to measure and manage your risk. True business sustainability will move from marketing claims with an environmental focus (by third-party organizations or companies’ self promotions) to an operational focus using corporate sustainability reporting (CSR).
CSR demonstrates an accurate assessment of where a company is in its sustainability efforts. In general, if a company’s marketing department is in charge of the organization’s sustainability program, it’s likely not sustainable! True business sustainably goes a lot further.
So what does a CSR look like and how can it benefit your organization? A CSR is a report that measures the economic, environmental, and social impacts your company causes by its everyday activities. A CSR should present your company’s values and governance model and demonstrate the link between your strategy and commitment to a sustainable economy—always with a robust regard for transparency, traceability, and compliance. This report can be made available to the public (several large, global companies in our industry do this) or kept for internal use (where it has value in managing risks and facilitating communication between departments).
The leading corporate sustainability reporting guideline is from the Global Reporting Initiative (GRI). This, and other reporting guidelines set goals, measure performance, and integrate a sustainability strategy into their core planning. Topics in a GRI CSR include analysis of a myriad of economic, social, and environmental categories that include labor practices and relations and direct and indirect economic impacts as well as energy and water use. Ultimately, the use of CSR, or sustainability as a business model, forces companies to take a hard look at what they are doing well and where they have opportunities to improve by finding ways of measuring those activities and using the information to evolve where possible.
A CSR is the most effective and consistent way to communicate sustainability performance and impacts beyond environmental issues, whether positive or negative, internally or externally. To produce a CSR, companies must regularly report, collect, and share data and communicate and respond regarding past goals. This means that their progress is monitored on an ongoing basis. Data can be provided regularly to management to fulfill the company’s strategy and policies and improve performance. Sustainability reporting is an important way to manage change towards the company’s goals of a sustainable global economy, one that combines consistent long-term profitability with ethical behavior, social concerns, and environmental care.
Profit Benefits
The benefits of creating sustainability reporting for corporations are numerous: Internal benefits can include increased understanding of risks and opportunities, links between financial and nonfinancial performance, influence of long-term management strategy and policy, and effectiveness of business plans—all while benchmarking and assessing performance with respect to laws, norms, performance standards, and company initiatives. Needless to say, it’s also a very good way of avoiding being implicated or involved in publicized environmental, social, and regulatory failures.
The external benefits of mitigating or reversing negative environmental, social, and regulatory issues can improve your company’s reputation and foster greater brand loyalty. In addition, it can enable customers, vendors/partners, and employees to understand your company’s true value in financially tangible and intangible ways. It may even demonstrate how your company is influencing and guiding expectations about sustainable development and practices within your community and/or our industry.
People—and Shared Value
So far I’ve addressed how CSRs can be a tool to increase profit. Benefiting people is the next piece of the puzzle to maximize the benefits of business sustainability. One of the most prevalent social issues addressed in sustainability reporting is the concept of social justice. Social justice is defined by the United Nations as “the fair and compassionate distribution of the fruits of economic growth.” I must ask… who determines what is fair and compassionate? Why are we distributing, or redistributing, those fruits? Is there a more productive viewpoint to consider?
I believe the concept of “shared value” is the real key to benefiting all stakeholders. The idea of shared value means that when businesses create economic value for themselves, they must also create value for society by addressing its needs and challenges. Shared value places the responsibility for doing good on the side of business and managers. Companies create measurable business value by identifying and addressing social problems that affect their business.
Shared value was defined in the Harvard Business Review article “Creating Shared Value” (January/February 2011) by Professor Michael E. Porter and Mark R. Kramer. The authors identified three ways in which shared value can be create:
- Reconceiving products and markets.
Markets are evaluated in terms of unmet needs or social ills with businesses developing profitable products or services that remedy these conditions. - Redefining productivity in the value chain.
Businesses increase the productivity of the company or its suppliers by addressing social and environmental constraints in its value chain. - Local cluster development.
A company strengthens in ways that contribute to the company’s growth and productivity.
Shared value is not about redistributing value created through philanthropy or about including stakeholders’ values in your corporate decisions. Shared value instead focuses on the creation of meaningful economic and social value by your company that is greater than the costs to your business and society.
Where can we see the future of sustainability today? These principles of balancing the benefits to people, the environment, and business are being put to work in the Cleaning Industry Management Standard (CIMS) by ISSA. CIMS describes itself as a program that allows you to differentiate your organization from the competition, demonstrate your commitment to quality and customer satisfaction, improve your overall (green) operations, and save money. CIMS addresses the 3 P’s of sustainability and can be a fantastic guide going forward in sustainability.
Take the benefits of CSRs and shared value a step further and consider how you can use existing programs, develop your own metrics, and provide value to your community by using all the aspects of sustainability. By going beyond environmental concerns and maximizing efficiency in your business and for your community you can truly be sustainable.
