By Rory Bakke, REV Chief Sustainability Officer and VP, Product Development
If you are reading this blog, chances are pretty good you already know what “sustainability” means to you and your organization, and have likely begun to at least experiment with saving money by improving your organization’s operational efficiency; by using less energy, conserving water and/or slashing the generation of solid waste. This is a good start but if you stopped there, you are probably leaving a lot of valuable opportunity on the table.
Being able to access the world of Sustainable Value thinking and action can be a game changer for businesses and organizations. The purpose here is to translate the sustainability conversation from simply adding efficiency measures into one of re-thinking and re-design. Focusing your time and energy on Sustainable Value can: (1) capture imagination – yours and others in your company; (2) elevate understanding, consciousness and competency in your organization; (3) stir innovation; and (4) cause new action.
The bottom line objective is to increase awareness of Sustainable Value opportunities and develop capacity to identify where you are, assess your best opportunities in terms of value to your organization, develop and “sell” your game plan, and make it happen. This is a new language and a new set of skills to accompany the translation.
What is Sustainable Value?
While many of us have designed and implemented all kinds of operational efficiency measures in our businesses and have saved money doing it, the pathway to capturing more significant value from sustainability is still not widely understood or pursued. The opportunity cost of stopping at operational efficiency can be significant because diving more deeply into Sustainable Value opportunities almost always translates to higher beneficial impact on business performance. I refer to this set of potential benefits that can be captured from focusing on sustainability, as “Sustainable Value.” Wikipedia defines Sustainable Value as: “ A way of managing and measuring sustainability performance… differs from existing approaches by the fact that it is values-based while all other existing approaches to sustainability assessment are burden-based, (i.e. they are assessing environmental and social resource use based on the burden that is created). Using the Sustainable Value approach, economic, environmental and social resources are assessed and aggregated based on their relative value contribution and can be expressed in a monetary unit like euros, dollars or pounds.”
The desired results from focusing on Sustainable Value include:
- Enhanced understanding of reasons to pursue Sustainable Value
- Increased knowledge of both more advanced operational as well as behavioral and design improvements
- A broader willingness to engage in a bit of trail and error to find and the best opportunities and process improvements
- The trust to drive the entire new way of looking at the potential in our organizations and the people within them
The Sustainable Value Toolkit
The pathway to identifying and benefitting from Sustainable Value opportunities is aided by the use of tools — some are simple and some more complicated. One simple tool developed for this purpose is a Sustainable Value Journey Map. Maps not only tell us where we are but also help us see where we are going and how to get there. Even if most of us use GPS these days to navigate, being able to understand and read a map still has utility in the world of Sustainable Value.
A Journey Map makes apparent the typical stages and steps that an individual or an organization must navigate into, through, and beyond to gain a positive result. Ideally, it points out or at least alludes to (perhaps by example) the forces and conditions that can enhance or challenge the desired outcomes. It includes ideas for specific actions to build momentum and can also be purposefully designed to help the map user to identify their own most important steps that will align with strategy that works in their particular organizational culture. A map can identify stakeholders, such as partners, employees, customers, and management, who need to be a part of the journey in order for it to succeed, and lastly a map defines the desired destination.
At REV, we use a detailed visual Sustainable Value Journey Map as one of the tools in our Business Sustainability Workshop to help guide business leaders in identifying less apparent sustainability opportunities and developing their sustainability story in order to engage other members of the organization.
A Sustainable Value Approach Drives More Impactful Outcomes
- Fostering innovation in sustainability often leads to redesigning more socially and environmentally responsible products and services. This focus inevitably brings new business opportunities. Nike, for instance, embedded sustainability into its product design process and created the Flyknit line, a specialized yarn system which requires minimal labor and brings large profit margins. Launched in 2012, this system is reported to reduce footwear waste by 80% (3.5 million pounds). In 2016 Nike transitioned from yarn to recycled polyester from used bottles, to date diverting 182 million bottles from landfill.
- Building loyalty from customers. Many of today’s customers expect transparency and tangible local and global impact from companies they support. Several studies during the past year showed that nearly two-thirds of consumers across six international markets think they have a “responsibility to purchase products and services that are good for the environment and society” (82% in emerging markets and 42% in developed markets). As an example, Unilever claims its “brands with purpose” are growing at twice the rate compared with other groups of products in their portfolio.
- Process logistics improvement can result in financial savings. For example, WalMart sought to improve fleet efficiency by 50% from 2005 to 2015 with improved routing, advanced technologies, and increased driver training. By the end of 2014, they had improved fuel efficiency almost 87% in comparison to the 2005 baseline — well beyond their original targets. The results included the avoidance of 15,000 metric tons of CO2 emissions, and savings of almost $11 million.
- Companies who embed sustainability in their core business are more likely to treat employees as critical stakeholders. These organizations tend to create desirable organizational cultures that are sought by talented recruits, as they exhibit a deeper focus on purpose. Employees feel they are part of a broader set of objectives and actions. One study found that morale was 55% higher in companies with more robust sustainability programs, compared to those with much less apparent ones, and employee loyalty was rated 38% higher as well. These conditions translate into improved productivity and reduced absenteeism.
Sustainable Value Momentum
Since I have been a fairly careful observer of (and participant in) the Sustainable Value Journey of various types of organizations, I have noticed over the last decade that Sustainable Value practitioners gain momentum. In other words, as one becomes more experienced in evaluating and practicing the implementation of Sustainable Value strategy and mechanics, general consciousness about Sustainable Value continues to deepen and one’s capacity to identify and implement Sustainable Value opportunities continues to gain momentum, intelligence and sophistication.
As you practice Sustainable Value, you become better and better at doing it and associated with this fact is another important factor – that your ability to practice Sustainable Value is an important differentiator that is all the more valuable because so few companies are really capturing anywhere near the full benefit Sustainable Value can bring to all three bottom lines – economic, social AND environmental. So what more reason do you need to grab your colleagues and get going on finding and capitalizing upon Sustainable Value?
Want to know more about Sustainable Value? Register for our half-day Business Sustainability Workshop. Learn more at www.revsustainability.com/sustainability-workshop. Workshops are scheduled for January 25, 2017 in San Jose and January 31, 2017 in San Francisco, with more workshops being planned for Southern California.