Sustainable strategies

There has been vigorous debate about whether green topics will slip off the corporate agenda in these troubled economic times ­ much of it stirred up by Prince Charles’ ‘Accounting for sustainability’ initiative. My background is in the risk management world where savvy risk managers classify environmental concerns as an emerging risk for most organisations. Green issues lead to potential risks and rewards which need to be evaluated so that appropriate strategies can be developed.

Depending on the industry, such issues may already be firmly on the board’s agenda ­ ask BAA and the energy companies. But in today’s ‘inter-networked’ supply chain the majority of businesses are susceptible to reputational risk and brand damage in relation to the green performance of remote global supply chains.

A board must work out the position it wishes to adopt and develop plans accordingly. I have seen organisations falling into four broad categories.

Green leaders ­ organisations embedding environmental concerns into their brand and using this as a business differentiator ­ Marks & Spencer, for example. The focus here is to create a competitive-edge to win more business and to drive revenues.

Supply chain followers ­ often suppliers to the leaders, their actions are driven by the green promises of major customers or by the green demands of doing business with the public sector. The focus here is to keep clients and, over time, win more business.

Cost savers ­ these organisations may present themselves as leaders, they may even win green awards, but the real focus is cost reduction. This sells the green initiative to the board. I’d put the Post Office in this category. It achieved significant fuel and cost savings by improving transport efficiency ­ there was less emphasis on reducing the amount of junk mail which they had to deliver in the first place.

Legislation-driven organisations ­ these companies act when legal changes force their hand. The speed of reaction required depends on the industry ­ for example, power generators face more pressing green demands than financial services. Unless a company decides to become a leader then the focus here is the cost of staying in business.

These strategies have direct impact on revenue, cost, reputation, supply chains and business continuity. No business can afford to ignore this emerging source of risk and reward.

Peter Robertshaw is VP of global marketing at Strategic Thought Group and co-chair of the BASDA Green SIG