Sustainability hits the boardroom

Jul 04 2011 by Gareth Kane Print This Article

Ten years ago, environmental issues in business were essentially about compliance - "what's the least we can get away with that keeps us out of jail". In the last decade there has been a significant shift and companies have been keen to go 'beyond compliance' into environmental management.

Now every manager and their dog have been setting annual targets, appointing environmental champions and rolling out the recycling bins.

But this is changing once again. Sustainability is fast becoming a strategic boardroom priority. Why?

The first reason is that instead of being a public relations or cost cutting opportunity, green issues are starting to become a source of competitive advantage (or disadvantage). In an interview for my new book, The Green Executive, Martin Blake of Royal Mail told me the organisation had won and lost seven-figure contracts where sustainability was a key factor in the final decision.

In Europe at least, with the public sector and the big retailers in particular driving sustainability down their supply chains, it is increasingly a matter of "go green or go bust".

The second reason is that, due to this competitive advantage/disadvantage, the bar is rising higher and higher. Glen Bennett, Managing Director of specialist logistics firm EAE Ltd, recently won a contract where he was told that the crucial advantage was gained in the environmental section. The other bidders had submitted environmental policies, Glen put in a picture of his 6kW wind turbine. He has since invested in an electric van and biodiesel-powered lorries to maintain his competitive advantage. Such investments in sustainability cannot be delivered without board level buy-in.

The third reason is that in these days of social media, bad news can travel fast. Very fast. Pressure groups are always on the look out for a high profile target. Greenpeace's clever aping of Apple's website in 2007 to highlight their poor environmental performance led to a rare about turn by Steve Jobs. The pressure group has now turned its fire on the Volkswagen Group (recently labelled as Europe's least-green motor manufacturer) with a clever Star Wars parody which is going viral as I type.

The damage that can be inflicted on brands and reputation by such campaigns is immense. Walmart's ambitious sustainability programme was formulated in response to negative perceptions about a range of sustainability issues in its supply chain. Marks & Spencer's equally impressive Plan A was in part inspired by a desire to maintain its position as the UK's most trusted high street retailer.

So where does this leave the boardroom members of the future? Surveys have shown that senior executives widely believe that sustainability issues are key to corporate advantage over the next few years, but that they feel ill-prepared to deal with them.

From the interviews for The Green Executive, I found that the key success factor is the ability to marry a personal commitment to sustainability with superlative business acumen. Hitting that sweet spot involves a steep learning curve for many, but those who get it right will be the business leaders of the future.


About The Author

Gareth Kane
Gareth Kane

Gareth Kane is a sustainability consultant, speaker, trainer, coach and author. He has worked with hundreds of organisations, from small local companies to trans-national corporations, to help them get the most from the sustainability agenda.