Forum For the Future & Sustainability

 

by Deborah Miarkowska

Forum for the Future are leaders in sustainable Development. Established in 1996, Forum for the Future is an independent, non-profit organisation with a mission to promote sustainable development. They believe there is a practical route to a better future where we – and generations to come – can prosper, sharing the resources of one planet. And we believe business and public service providers have a vital role to play in creating that future.Forum for the Future’s work focuses on the sectors they believe are critical to the change we need now and EcoChic fully supports their work.

Retailers, branded manufacturers and tourism organisations have the power to drive change through their supply chains and to influence the behaviour of millions of customers.

Our cities, transport and the buildings we live and work in have a huge impact on our environment and wellbeing, and must be transformed if we are to achieve a sustainable future.

Financial institutions will be essential to creating a sustainable economy as we face up to key issues like carbon-pricing, creating effective financial mechanisms to protect rainforests and exploring the implications of an economy without growth.

We seek to transform these sectors by applying our expertise in futures thinking, innovation, leadership and other key strategies for change.

What is sustainable development? This is the formal definition of sustainable development that we use at Forum for the Future:

‘A dynamic process which enables all people to realise their potential and improve their quality of life in ways which simultaneously protect and enhance the Earth’s life support systems.’

Another useful and widely accepted formal definition is the Brundtland Report definition:

‘Sustainable development is development that meets the needs of the present without compromising the ability of future generations to meet their own needs.’

David Bent of Forum For the Future recently outlined six key lessons on mapping out a business case for sustainable development.

“Finding the business case” is the holy grail of corporate sustainability professionals. For over a decade they’ve set out to demonstrate the commercial benefits of social and environmental initiatives. So why is it so hard to find?A number of recent reports and surveys - from MIT Sloan/Boston Consulting Group (pdf) and Boston College/McKinsey (requires registration) and Cranfield (pdf) - show that sustainability professions find the business case difficult. Over the last few years, I’ve turned my accounting background to help companies profit from making sustainability - from climate change and resource shortages to poverty or child labor - issues for their business strategy, rather than the CSR plan.

This first post of three covers why the business case is so difficult and some lessons I’ve learnt on the front line. Subsequent posts cover how to create a virtuous cycle and how to turn qualitative arguments into quantitative results.

1. There is no “one size fits all” business case. Each company has different drivers of shareholder value and different material sustainability issues. The senior decision-makers will have different hot buttons. Not surprisingly, different companies have different business cases for sustainability too. Cadbury went Fairtrade to secure the future of its supply chain and engage the consumer. Engineering and construction firm Balfour Beatty realizes that its long-term success requires alignment between market demands, healthy communities and environmental limits.

Lesson: Focus on finding only your company’s business case.

2. The “societal case” doesn’t automatically make a business case. There is a growing acceptance of the need for action on sustainability issues like climate change and chronic under-development. Unfortunately, this “societal case” does not automatically make a business case for every company. There are still plenty ways of making profit today that are unsustainable in the medium term, like gas-guzzlers and bottled water. Over time, we can expect greater overlap between the societal case and the business case, as there are changes in regulation, consumer behaviour, investor expectations and more.

Lesson: Don’t expect a business case to exist now for all the things the company needs to do.

3. Opportunity trumps responsibility. Often corporate responsibility means improving the current business so it is good enough for legislation or stakeholder expectations. Companies get into a “compliance mentality” that resent the costs, and are blind to the benefits. Plus there are other ways of improving the current business - if your best argument is “it motivates staff” then be prepared for someone finding a cheaper way of raising their spirits.

On the other hand, senior business people love the idea of opportunity and hate the idea of missing out. Fundamentally, corporate sustainability is about exploring the next way your company will be successful, because almost all the things you currently rely on - energy, supply chain, consumers, investors, regulation - are going to change. Ecomagination is about inventing a new future for GE, not improving its energy efficiency.

Lesson: Frame sustainability as a way of unlocking opportunity for the company now and into the long term.

4. The more you look, the more you find. The evidence is that “once companies being to act aggressively, they tend to unearth more opportunities, not less” (to quote the MIT Sloan Review report). For instance, in January 2007 Marks & Spencer planned to invest £200m over five years in Plan A - by 2009, two years into the initiative, it has already become cost positive.

Lesson: Plan to explore how to make sustainability commercial and how to keep improving your company’s business case.

5. Sustainability professionals and finance professionals speak different languages. One side tends to make a case in qualitative terms, talking about how it will benefit society first and then the company. The other is primarily interested in the direct, provable benefits to the company in financial, quantitative terms. (Guess which is which.) Fundamentally, accounting is the language of business, and finance directors call the shots. So, the sustainability change agents have to learn “accountant.”

Lesson: Frame the case for sustainability in terms your finance director will understand, ideally in drivers of shareholder value (this will be subject of a subsequent post).

6. The “no business case, no permission” vicious cycle. Often sustainability professionals need permission from the finance department to get the resources they need to find a business case. But the finance function will not give permission without a business case. Everyone is stuck in a vicious cycle.

Lesson: Plan small steps to iteratively create a virtuous circle of permission and results.

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