Sustainable Growth, Growing Sustainably, and the Difference Businesses can Make
We’ve noted in recent blog posts that companies are shaping their purpose around the needs of consumers like never before. This reality has spawned new business models, has changed the nature of the customer/business relationship, and has influenced the way we define concepts like value and success. However, end consumers aren’t the only ones shaping the way we do business. The natural environment, and the world’s relationship with it, are factors that businesses can no longer continue to brush under the global rug.
Once upon a time climate change and global warming were seen as potential threats we might have been able to avoid if we addressed our impact on the natural world and its finite resources. This is no longer the case, and now these threats have become realities that must be managed, and businesses are among the most powerful when it comes to leading the movement towards a low greenhouse gas economy.
When talking climate change and sustainability, especially in the context of doing business, the terms can easily be reduced to catchwords and lose their meaning. Still, these topics ought to figure into business plans, practices and supply chains, because businesses thinking they can continue to evolve without any action plan for sustainability are likely to go the way of the dodo. Andrea Sabelli, who is a Brite co-founder and serves as Business Development Manager, has built a successful global career around creating value in a manner that leads to both social and environmental change. For her and many like her, sustainability is both a passion and a source of frustration, especially given how far science and technology have come to both identify and address a myriad of environmental concerns, and how most of the world has responded by refusing to catch up.
However, for the purpose of this post we’ve decided to focus on the passion over the frustration, because many SMEs and some bigger businesses have already successfully adopted business models that are geared towards sustainability. One of the growing concerns among businesses looking to operate more sustainably revolves around their supply chains. As the global nonprofit organization BSR points out in its report on the topic, “Supply chain sustainability is the management of environmental, social and economic impacts, and the encouragement of good governance practices, throughout the lifecycles of goods and services.”
When weighing in on the idea of businesses shifting towards sustainable supply chains, Andrea points out that, “Up until recently, environmental sustainability or climate change considerations from a business perspective were all but unheard of. Even Corporate Social Responsibility (CSR) wasn’t close to where it is today. Initially CSR asked questions pertaining to whether or not exported manufacturing processes were undertaken in a humane and fair manner, whereas now the focus has shifted to include a company’s role in the social sphere and the ways in which it can be environmentally responsible, at least in certain regards.”
If CSR could evolve as much as it has in the past ten years, maybe sustainable supply chains aren’t that far off, either. Andrea responds, “Firstly, there are numerous practical challenges involved in trying to set up a sustainable supply chain. Take transparency as an example - how does a company know for sure whether or not their raw materials are sustainably sourced and if people are earning fair wages along the way?. These considerations make progressing toward sustainability something that is always easier said than done. Still, if companies are motivated to move past reducing their carbon footprints and becoming sustainable, and they have ambition and big ideas, then they’re already setting things in motion.”
Andrea isn’t the only one hinting toward ambition and big ideas as means to a sustainable end. In an interview conducted by Harvard Business Review on the nature of sustainable supply chains and what it takes for a business to get serious about things like water, energy and waste within their supply chains, Peter Senge maintains that a business, “Can’t build a new vision without a strong, community-oriented culture—which, by the way, is rare. It sounds good, everybody nods their heads, but the gap between that idea and the way most managers manage is enormous.”
So not only does it take specialty knowledge, an innovative spirit, and business acumen to see change through, a whole culture shift is needed to make sustainability a part of a profitable business. This might be the most important part of moving towards a sustainable supply chain. There are many more practical and business-oriented considerations to keep in mind when trying to make the shift to a more sustainable supply chain, but another critical factor to consider is knowledge sharing within a broader network of stakeholders. There are countless NGOs that can collaborate with businesses, both to see where they currently stand vis-à-vis operating in a sustainable manner, and to help them set goals as well as establish realistic roadmaps to achieve these goals. Again, we are all stakeholders in managing climate change, so non-business entities that have been committed to preserving the environment long before climate change became an accepted reality are willing and able to support businesses with their knowledge and expertise.
On the customer side of things, it doesn’t hurt to know that consumers are increasingly drawn to businesses that operate with sustainability in mind. A global online Nielsen Study found that almost three-out-of-four millennials are willing to pay extra for sustainable offerings, and that half of baby boomers share the same mindset. This type of incentive; however, really just scratches the surface of the reasons why a company should strive towards operating sustainably. Especially in the case of bigger businesses, sustainability, as Andrea notes, “Might involve cutting into profits in order to create more critical incentives down the supply chain. In fact, some of the most notable sustainability initiatives have yet to be revealed by the companies implementing them, because they are being done as a result of a culture shift and the idea of putting the environment first, and not because there is a profit to be made by labeling one product or another sustainable.”
That said, there are a number of businesses thriving despite making what some might consider to be a compromise in the area of turning a profit. One such company is Swedish denim guru Nudie Jeans. Professing to tell the ‘naked truth about denim’ amid a world of fast-fashion that promotes seasonal trend changes and a constant ‘out with the old in with the new’ approach to clothing, Nudie Jeans has made it their mission to provide organic clothing that is made by people working in up-to-standard manufacturing conditions who are also paid properly for their work. Winners of the prestigious Sustainable Style Award and ranked as one of the two most sustainable jeans brands in the world, Nudie Jeans is both a business and a culture. It took them a decade, but in 2012 the brand delivered the first denim collection made with 100% organic cotton. Furthermore, they preach a Repair, Reuse, Recycle philosophy and back it up by fixing busted jeans for free at their stores, or giving discounts to those who trade in old jeans when buying a new pair. Again, it’s not just a business model; it’s a culture – one that their customers are totally immersed in. It doesn’t hurt that their jeans are super cool and stylish, either.
Like any business, especially an SME, many are started out of love and passion. If we encourage and inject sustainability into this passion, then the idea of sustainable supply chains will be less about cliché talk and more about doing business in a responsible manner. As Andrea rightly says, “Businesses are powerful and if they want to do things like protect the environment or contribute to poverty reduction, they can do it, and motivate others to support them in such worthy pursuits.”