With sustainability becoming increasingly operational, managing it as a cyclical business strategy is key.
By Susan Graff
Businesses are at different stages in operationalizing sustainability. They need practical tools and approaches to successfully manage the technical evolution required, with a sustainable business model that recognizes that the financial health of the firm is dependent upon the environmental and social health of our planet. As such, sustainability is the means by which performance goals are achieved.
During the past decade, we have regularly benchmarked some of the world’s largest companies, including Caterpillar and Unilever. From our experience, we’ve learned that companies start the sustainability path by focusing on the potential to reduce their environmental burdens from the extraction of raw materials, the production of goods, the use of those goods and management of the resulting wastes. The champion companies evolve industrial processes that go beyond waste reduction and eco-efficiency to mimic the cyclical ecosystem processes of the natural world, where waste is fuel or food. They also use a new accounting ledger that has a large intangible dimension—capturing the knowledge, skills and motivation of employees and the company’s external relationships.
Getting on a path to sustainability requires business strategy that includes useful tools at various stages. The path involves two cycles that lead to continuous, sustainable improvement while also having a positive effect on a company’s bottom line. After establishing a commitment to sustainability through business values and a sustainability framework, a company enters the first cycle by focusing on pollution prevention.
This cycle involves examining the inputs and processes of production, allowing for the establishment of cleaner production priorities.
In the second cycle, the company should take a broader look at design and production—from primary resource use to end-of-life. This would include evaluating product supply chains and vendors. This cycle involves developing procedures for continuous product improvement and new product development from a holistic, sustainable point of view.
Within these cycles, there are six clear steps, each with specific tools that comprise a roadmap to sustainability, which includes social, economic and environmental components that require appropriate engagement of community, industry and government stakeholders.
1) Establish a Company Culture and Align the Business Plan
Changing existing business practices to sustainable business requires executive management direction to develop a company culture that wholly supports sustainable business values that act as a compass to define actions, roles and responsibilities toward the environment and the community.
Environmental values may take the form of subscribing to established global principles or the company may adapt these to their existing values. A sustainability framework is a tool that enables a company to set policy, identify significant risks, implement changes, review successes and failures, and strive for continual improvement that enhances process efficiency.
Companies that have environmental management or business management systems already in place can build from these foundations.
2) Examine Inputs
The next step is to conduct a quick scan of the raw materials and resources required by your products and services from a process perspective and identify the major risks at a macroscopic level. Apply the 80/20 rule (80 percent of the impact comes from 20 percent of the process) to identify environmental aspects of the raw materials (i.e. non-recyclable packaging) and the process of making the finished product (i.e. excess water for coolant). Examples of major risks may include the amount of raw material and energy used, emissions, waste generation, noise, radiation and other significant byproducts. A more detailed environmental footprint can be defined using an abridged life cycle assessment tool, paying particular attention to carbon if the quick scan identifies this as a major risk.
3) Evaluate Processes
The “Material Balance and Process Flow Chart” has been identified as the most useful tools for process evaluation. The Material Balance analyzes the amount of inputs and outputs including materials, energy, air emissions, water and solids. To benefit business planning, the material balance is commonly supplemented with costs, federal/state/local regulatory requirements, potential substitutes and technological feasibility. The process flow chart identifies all possible sources of waste generated or excessive material consumed. A checklist of five components can be applied at this stage (product and technical modification, good housekeeping, input substitution and on-site reuse) that affect the volume and composition of waste streams and emissions. Initial uses of each tool are at a qualitative level, and as the company moves forward, a more detailed quantitative level may yield valuable results.
4) Set Priorities for Environmentally Sustainable Production
At this point, the data becomes available to set longer term priorities. “Total Cost Accounting” incorporates tangible and intangible costs and includes both private and social costs of the product life cycle from extraction to disposal. It is a prioritization tool, where different improvements are identified and priority is given to those with the greatest value to business (cost savings, reputation/brand enhancement, customer appeal).
5) Evaluate Products
The responsibility of a sustainable business at this stage is to examine the activities of the companies from which it obtains materials and the companies that dispose of its wastes. The “Guide for Improvement of the Production Chain” tool considers the activities of the companies in the chain of suppliers and vendors from manufacture to disposal.
The focus also becomes product-oriented, focusing on the purpose and utility of the company’s own product, and substitutes for the inputs and product. Product Improvement Matrices rate potential product modifications based on the ecological impacts of materials choice, energy use, solid wastes, liquid wastes and gaseous emissions.
6) Set Priorities for Sustainable Design
Design for the Environment, Dematerialization, and Biomimicry are tools that lead to a wide range of innovation. “Design for the Environment” offers a systematic procedure of environmentally driven product improvement that includes pilot project planning, environmental analysis of the product and environmental priority setting, inventory and prioritization of improvement options, product redevelopment, implementation, and evaluation. The dematerialization tool focuses on using less material and energy inputs to obtain a product; for example, telecommuting and using recycled materials.
The biomimicry tool helps designers imitate natural systems and takes inspiration from nature’s designs to create new products.
Susan Graff is Founder and Principal of the sustainability consulting company ERS.