Guiding sustainable business through its teenage years

Three years ago I asked the chief executive of a company with more than 20 million UK customers what excited him about sustainability. His answer: “We can make money. And we can help our customers. And we can build our brand. And we can inspire our employees. And we can beat our competitors. It’s just smart business.”

At the time I thought: “Blimey, this is unusual.” But the Sustainable Business 2011 report, launched today by ENDS (Environment Data Services) in collaboration with Forum for the Future, and available here, shows that a growing number of business leaders are beginning to come to the same conclusions. It gives an overall message of progress – but with a long way to go.

There are encouraging signs of how business is taking sustainability more seriously. We can see this in the rapid rise in the number of sustainability reports published – up by a fifth in the past year – and the growth in environmental management system certifications – up 13.6% in a year. Neither of these by themselves is enough to make a business sustainable. But our experience is that these are two of the first steps a company takes on its sustainability journey. After transparency and compliance comes risk management, before moving on to opportunity and strategic repositioning, with business benefits along the way.

Business sustainability is improving despite tough and uncertain economic times. Commentators who predicted the recession would be the death of all this ‘green’ and ‘sustainability’ nonsense have been proved wrong. We think companies are seeing the business case for sustainability; the short-term cost savings from efficiency and the long-term benefits of investing in how to make a profit in a future heavily affected by climate change, rising commodity prices (including oil), the growing needs of people in emerging economies and similar sustainability issues. So it is good to see a 4.7% increase in green industries. Hopefully it will be an engine of growth for a long time to  come.

Nevertheless, UK plc is not acting fast enough or at the scale required to meet the challenges of the 21st century. The most urgent is climate change, with the Met Office warning that we need global emissions to peak in the next decade followed by 5% reductions per year to have a good chance of avoiding a dangerous worldwide impact. However, carbon emissions rose and energy efficiency worsened in 2010; we need to reverse these trends and fast.

These indicators reinforce our belief that the most urgent task is to achieve financial growth without negative environmental impacts (so-called ‘decoupling’). Government has a role here in setting a clear, consistent regulatory context that provides the financial case for investment, and the Climate Act is a world-leading attempt. But all businesses can do so much more. Cost savings from energy efficiency are a first step, but the pioneering companies that Forum for the Future works with are trying to decouple growth by developing innovative business models and collaborating with other leaders.

The indicators also give a mixed picture on the social side of sustainability; skills training is up but pay equality is down. In next year’s report we aim to include more indicators on the human and social dimensions. The report itself is a symbol of advances in sustainable business. It goes beyond anecdotal evidence to provide authoritative data assessing the performance of UK business on sustainability. We hope to develop this work and create an annual report highlighting the areas that companies should be focusing on and tracking
year-on-year progress.

Sustainable business is entering its teenage years, with a growth spurt, experimentation and doubtless some pimples to come. But more business people are already seeing sustainability as possible, profitable and necessary. There will be innovations in how to do sustainable business, and we’ll get better at measuring performance. It’s just smart business.

Find out more

Forum for the Future’s Sustainable Business work is all about helping leading companies to succeed through sustainability. To find out more, contact David Bent at d.bent@forumforthefuture.org.

To learn more about the Sustainable Business 2011 report, contact Ruth Curran at r.curran@forumforthefuture.org

Get a copy of the report

The full report includes a detailed analysis of each of the 16 progress indicators.

If your organisation is part of the Forum for the Future Network email Kester Byass to request a free copy of the full report. 

A free sample of the report, including the foreword and main results table is available at http://www.endsreport.com/reports/sb2011. The full report is available to subscribers to the ENDS report from the same page.