Sustainability
Paul Trudgian Ltd | Supply Chain & Logistics Consultancy No Comments

Sustainability and thriving businesses go hand in hand. Globally, businesses are striving to increase their sustainability through concerted effort and drive. Whilst this no doubt ticks many boxes in terms of corporate social responsibility (CSR), this isn’t the only reason why sustainability is good for business. In fact, the evidence points to sustainable businesses being more effective, efficient and even profitable.

It’s important to understand that there is no single sustainability model for business. A range of different factors come in to play. Even small adjustments in business processes can impact on sustainability and sustainability pervades business behaviour and culture. A sustainable business model is unique to each business but has the capability of proving to be excellent business sense.

All businesses require energy to run. It’s the nature of the beast. Energy costs, therefore, typically, hit a business hard. Purely looking at it from an economical point of view, controlling your energy expenditure will help your bottom line. This is only possible if we adopt a culture and business model founded on smart technology, reductions in waste and the other sustainability methods.

Case Study: Unilever

Unilever has undertaken to reduce the environmental impact of their products by 50% by 2030. They are already well on track to achieve this. They have introduced eco-efficient practices. These, in turn, have reduced operational costs. In fact, costs have been so reduced, largely due to reduced energy usage, as well as waste reductions and time losses, that since 2008 ‘eco-production’ has helped save around €600 million.

Furthermore, risk in the Unilever supply chain has been reduced as they have secured long-term suppliers of raw materials. Of course, CSR has also been bolstered and sustainability can be at the core of future marketing efforts.

Whilst Unilever is a behemoth making smaller businesses wonder if they can do the same, the reality is that you can. Don’t forget that Ben and Jerry’s were a small business bought by Unilever only on the condition that they would maintain their social mission.

The Chicken and Egg Situation

So, sustainability and successful business go hand in hand. However, they are two goals chasing one another. Sustainable businesses are more successful. But is this because they are more sustainable, or are they sustainable because they are more successful?

In many ways, this doesn’t really matter and is likely a combination of both. With sustainability comes greater transparency and we’re familiar with why this benefits everyone involved, including suppliers, consumers and businesses.

The 2018 Impact Report: Transparent Supply Chains for Better Business

The Sustainability Consortium (TSC) has recently published its 2018 Impact Report titled ‘Transparent Supply Chains for Better Business.’ This report looks at data from a range of retailers and demonstrates that each year there are vast improvements in the transparency within supply chains where there is a consumer product. Alongside transparency, we see an inclination to deal with any social, ethical or environmental issues which are revealed.

The modern consumer is partly responsible for this. They are putting pressure on retailers for greater availability of sustainable products with clear traceability. Whilst ethically this should be enough, we know that for businesses to truly adopt it, it also needs to positively impact their bottom line.

This means that sustainability has to make good economic sense, and it does. If it didn’t make excellent economic sense then it wouldn’t be reaching all retailers. Transparency in the supply chain (and with it, a drive towards sustainability) fuels investor trust and consumer loyalty.

An excellent example of this is Starbucks decision to ban plastic straws. Consumers are easily able to adopt this policy and feel they are having a personal positive impact. This decision, at the consumer-facing part of the chain, is sustainability in action. Yet it reflected fantastically on Starbucks financially, who saw their stock value rise.

In fact, the data would appear to really support this thesis. TSC, in addition to the Impact Report, have demonstrated that 50% of share value for the largest consumer goods retailers is reliant on their ability to grow their businesses continually. Combine this with the Paris Climate Agreement and Science-Based Targets Initiative, and this has to be done with a vastly reduced amount of greenhouse gas impact compared to now. For companies to be successful, they simply have to be sustainable.

How to Make Your Business More Sustainable

On a practical level, there is a broad range of initiatives which you can introduce to improve the sustainability of your business. Here are some ways in which you can improve the sustainability of your business:

  • Sustainable partners: Supply chain businesses rely heavily on partnerships with others. An important way to improve your own sustainability is to partner with other organisations who are dedicated to sustainable practices.
  • Use green technologies: As you come to invest in new technologies, always seek eco-friendly options which use less power and lower energy consumption.
  • Nurture a sustainability culture: Habits are formed within the culture of the organisation so prioritise sustainability in your culture and lead from the top down. This can be as simple as introducing recycling schemes and raising awareness to start with.
  • Go paperless: Not only saving the commodity of paper itself, going paperless saves on inefficient processes and other environmentally unsound practices. Using the cloud to store data and documents makes this possible. Operating costs can be easily reduced this way.
  • Recycle: One of the key areas of business practice to look at when looking to improve sustainability is your recycling agenda. Gradually incorporate recycling practices across the organisation.
  • Energy efficiency: By investing in energy efficiency solutions, you can save money over time. Workplaces traditionally eat energy rapidly, reduce your carbon footprint and you reduce overheads. This involves new technology but also removing poor workplace habits.

Are you ready to embrace greater sustainability in your business? Our supply chain consultants can ensure that sustainable business practices are incorporated in a way which bolsters your success.

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