Aiming to gain sustainability savings

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We are seeing a shift in culture [as] small and medium-sized enterprises are looking past survival and recognizing that successful sustainability performance translates to long-term success. Many are maximizing sustainability practices by also linking them to short-term goals, such as cost efficiency and competitor differentiation.” –Sandra Rapacioli, head of sustainability for the Chartered Institute of Management Accountants

I’ve talked before in this space about how companies across the business spectrum are trying to use “sustainability” efforts as a way to drive cost-savings, rather than merely undertake them as part of an “environmentally friendly” corporate philosophy.

Of course, the benefit here is if it makes economic sense, more and more companies will pursue them, thus reducing their environmental footprint while saving always-needed dollars – a classic example of the well-worn “win/win” cliché.

[Here’s one an example of the savings the “big guys” can get – in this case, Dell Computer – from sustainability efforts.]

The interesting thing now, however, is that small to medium-sized companies around the world are now boarding the “sustainability” wagon specifically find ways to reduce their cost structure.

Thus “saving through sustainability” is not longer a strategy necessarily restricted to big companies, that can only gain monetary benefit from environmentally-friendly practices due to their inherent economies of scale. Now the little guys, even with their smaller structure, can benefit as well, it seems.

This is the view, at any rate, gleaned from the recent report SMEs Set Their Sights on Sustainability: Case Studies from the U.K., U.S. and Canada, compiled by the Chartered Institute of Management Accountants (CIMA), the American Institute of Certified Public Accountants (AICPA), and the Canadian Institute of Chartered Accountants (CICA).

The report builds off a joint survey conducted by the three groups at the end of last year, which revealed that 33% of smaller companies polled already have a sustainability strategy in place, with an additional 23% had plans to formulate a strategy in the next two years.

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“There are many ways to interpret the term sustainability, but whether it means environmental performance, corporate citizenship, long-term business perspectives or all three, it is a growing priority for businesses of all sizes,” noted Sandra Rapacioli, CIMA’s head of sustainability at CIMA. “It also underlines the growing emphasis small and medium-sized enterprises (SMEs) are placing on sustainability as it becomes increasingly crucial to business performance.”

Sue Coffey (at right), AICPA’s senior VP-public practice and global alliance, pointed to a very simple yet pertinent example of how “saving with sustainability” works.

“One leading U.K. stationery and business supplies provider, initially skeptical, not only reduced energy costs by an average of 5% year-on-year for the last four years,” she explained. “But has also increased sales and profits by differentiating itself as a sustainable supplier.”

The transportation sector is no laggard when it comes to finding ways to reduce energy consumption – and of course Wal-Mart is a prime example of how taking a more “sustainable” focus in logistics can reap savings down the line.

Yet how do smaller companies win some of the “sustainability savings” the big firms are gaining? According to the SME survey, there are several key tactics involved.

Take a broad view of sustainability. Understand the key sustainability drivers and opportunities for your organization. Finding innovative ways in which your company can be a good corporate citizen will yield benefits.

Define in detail what sustainability means to your company. A clear definition to which everyone in the company can refer, and clear success measures, are central to a sustainability policy.

Engage all stakeholders. Involvement in sustainability discussions allows their voices to be heard, and the strategy will be more likely to meet everyone's needs.

Remember that you are not alone. National, international and industry-wide initiatives exist to help businesses become more sustainable. Engage and tap into their knowledge and experience.

Establish responsibility and communicate widely. Have senior management drive the policy, but appoint sustainability champions and communicate the importance to every level of the company.

Take it step by step. Focus on evolution, not revolution.

Walk the talk. Customers and investors are wise to "green-washing," so never make the mistake of seeing sustainability as purely a marketing exercise.

Tie sustainability and profit together. Resource efficiency, for example, benefits the environment and reduces the cost of running a business.

Measure, monitor and review. Develop clear metrics, review them regularly and whether progress is fast or slow, keep setting realistic attainable targets.

Invest in time. Investing in sustainability does not always require huge capital expenditure. Rather, many SMEs say the largest investment is management time. That’s something to keep in mind.

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