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A Tipping Point for Sustainable Business?
Allan M. Oliver
On July 26th in Albuquerque the NM Green Chamber of Commerce and the NM Business Weekly will host a first-ever Sustainable Business Summit. The Summit will focus on the business case for why leading companies like Intel and others are working hard to become more energy efficient, conserve water resources, build more efficient infrastructure, improve their workplace and become more sustainable.
But isn’t this a tough economy out there? Why haven’t sustainability measures been cut? According to a new special report, “Sustainability Nears a Tipping Point” by the MIT Sloan Management School, it turns out that sustainability measures that companies have imposed on themselves weren’t superfluous or unnecessary, but have been a driver for innovation and profitability. In fact, the report shows that despite a tough economy these companies are increasing their commitment to sustainability.
Of the more than 4,000 managers participating in the MIT survey, one-third stated their company’s actions moving toward sustainability are contributing to their overall profits. In fact, these companies are finding that sustainability is changing their operating frameworks and strategies. Nick Robins of HSBC noted that “people are seeing that sustainability is part of that next phase of development and that it will be disruptive and structural rather than an incremental change here and there.”
Two out of three businesses surveyed believe sustainability is now a requirement for being competitive—up from 55% just last year.
But what motivated these companies to start down the path of sustainability? Here are the top four reasons identified by the companies themselves.
- First and foremost, because their customers demand it. Fifty-three percent of companies said customers’ preference for sustainable products remained the top driver for changing their business model.
- Second, political and legislative pressure moved many businesses to protect their reputation and institute more sustainable practices.
- Next, 30% of companies identified resource scarcity and a need to do more with less material.
- Fourth, they felt a need because their competition is increasing their commitment to sustainability.
The survey also focused on companies who have demonstrated a deeper, longer-term commitment to sustainability—naming them “Harvesters.” One out of every four Harvesters believes that sustainability helps drives innovation. For example,Mark Parker, CEO and President of Nike, states, “Sustainability is key to Nike’s growth and innovation. Making our business more sustainable benefits our consumers, who expect products and experiences with low environmental impact, contract factory workers, who will gain from more sustainable manufacturing, and our employees and shareholders, who will be reward by a company that is prepared for the future.”
Harvesters also reported improved collaboration among many groups: customers, suppliers, policy-makers, internal business units, industry associations, local communities, contractors and others.
What’s becoming clear over time is that leading companies are investing heavily on sustainable business practices. With current economic uncertainty, regulatory changes, resource scarcity and climate change, sustainable business practices provide these companies a competitive edge. It’s an edge they won’t give up, but one that others can learn.
On July 26th we look forward to convening sustainable business leaders from across the state for a summit to demonstrate the business case for sustainability, to recognize key sustainable business leaders, and offer workshops to better your business practices. Registration information is available at www.nmgreenchamber.com
Source: Sustainability Nears a Tipping Point, MIT Sloan Management Review, p. 3-17
Allan M. Oliver is CEO of the New Mexico Green Chamber of Commerce. He served as the NM Economic Development Department’s Secretary overseeing the Office of International Trade, the Office of Mexican Affairs, the Office of Science and Technology, and was also Gov. Richardson’s deputy communications director and policy advisor.
The NM Green Chamber of Commerce is a non-partisan association with over 1,200 business members, dedicated to advocating on behalf of clean energy, seizing the green business advantage and supporting local economies. NMGCC members believe that responsible business invests in people, protects air, land and water and creates long-term sustainable profits.
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