Let’s get sustainable

Up until just a few years ago, “corporate sustainability” was little more than a catch phrase used by environmentalists and a punch line used by executives. More and more, though, companies are warming up to the idea of corporate sustainability as a key profit driver. Many publicly traded firms are including corporate sustainability reports (CSR) in their annual reviews, while others are incorporating the practice into their bylaws. Some states like Minnesota — home to companies like Target, UnitedHealth, and U.S. Bancorp — are even considering legislation to permit corporations to adopt a “triple bottom line” (people, planet, profit), otherwise known as corporate sustainability reporting.

The corporate world can thank Enron for the recent boost in CSR efforts. Shareholders rightfully began clamoring for more transparency, and organizations have answered by implementing sustainability reports. Transparency isn’t the only result, though. Many CEOs are happily discovering that CSR pays dividends.

Wal-Mart is perhaps the best example of corporate sustainability at work. Its Personal Sustainability Project has aimed to decrease solid waste generated by retail locations by 25%, reduce packaging, develop more recyclable packaging, and increase fleet mileage. It has also gotten employees to adopt their own sustainability goals, whether it be riding a bike to work or switching to eco-friendly household cleaning products.

3M’s Pollution Prevention Pays (3P) program has saved that company $1 billion. While the program itself is older than the relatively new concept of corporate sustainability (launched in 1975), it is nonetheless cited by sustainability proponents as an example of what a company can do to reduce waste. 3P manages this by consistently reformulating products, modifying processes, redesigning equipment, and reusing waste materials.

Andrew Savitz and Karl Weber make a case for corporate sustainability and outline six steps toward launching a CSR effort. They point to two good examples. Volvo gauged its customers’ needs when it began to develop enhanced safety features while US automakers balked at the idea. Toyota anticipated industry change — rising gas prices — by introducing the hybrid Prius. Volvo revolutionized vehicle safety and saw increased profits. Toyota revolutionized fuel technology and is now the world’s #1 automaker.

While these are just a few examples, it’s clear that corporate sustainability should no longer be the butt of boardroom jokes. It’s a strategy worth investigating.