Friday, May 13, 2011

Sustainability Gets Wholesome

image“We do not believe there is a conflict between sustainability and profitable growth”, says Paul Polman, Chief Executive Officer of Unilever. The words may be different, but similar sentiments are now reflected in more than one companies business plans. Sustainability seems to have found its (business) footing. And more and more companies seem to develop an understanding of what it means for their survival and growth. It is not constrained to saving energy in the stores or fuel in distribution, it now touches all aspects of the business: A wholesome rethinking of the corporate business.

I will take three examples here to augment and understand how corporations are responding to the social, political, and customers pressures for being better guardians of the environment and natural resources. This is definitely going to be one of the biggest forces that will shape the business and operational models of these pioneers during the next decade. 
imageFirst, let us talk about Wal-Mart. A few years back, Wal-Mart simply stated three goals for its sustainability aspirations, (1) Be supplied 100 percent by renewable energy, (2) Create zero waste, and (3) Sell products that sustain people and the environment. Since then Wal-Mart has set-up targets and published their progress. In their fourth such report, 2011 Global Responsibility Report, the focus has expanded to include a lot more than optimized logistics. In the words of Mike Duke, president and CEO, Wal-Mart, “We have worked especially hard on the social aspects of sustainability. We know we can play such a positive role in communities around the world. And if we are going to be at our best as a business, we have to recruit, develop and retain the best people and leaders.” Some of their reported accomplishments:
  • Globally, an absolute 10.61 percent reduction in the greenhouse gas (GHG) emissions from its 2005 base of stores, by the end of 2009 (most recent year for which we have data).
  • 119 factories in China have demonstrated greater than 20 percent improved in efficiency compared to 2007 baseline.
  • Plastic bag waste was reduced by 47.95 million pounds, or approximately 3.5 billion bags, globally.
  • Wal-Mart de México reduced water use by 17 percent compared to 2008 baseline.
The second example I will pick is Unilever. Unilever has actually come up with the most extensive business plan marrying the sustainability. They have an extensive agenda and have defined specific goals to reach by 2020. Unilever seems to want to transform its whole business around the concept of sustainability. Their image“UNILEVER SUSTAINABLE LIVING PLAN” merges their sustainable goals with their business goal of doubling their revenues by 2020. Of course, this is fully aligned with Paul’s sentiment above at the beginning of this article.
The third example comes from P&G: Another global corporation that has merged its business goals with the sustainability goals. P&G has made a public commitment to the long term vision for sustainable growth:
  • Powering our plants with 100% renewable energy.
  • Using 100% renewable or recycled materials for all products and packaging.
  • Having zero consumer and manufacturing waste go to landfills.
Time will tell whether the trends hold and continue to grow, but the fact is encouraging that more and more corporations are seeing sustainability as integrated part of their business goals rather than an overhead or a marketing ploy…
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© Vivek Sehgal, 2011, All Rights Reserved.

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