Sustainability Sells

My article was published in the May/June 2014 issue of Winning Edge, the Magazine of the Institute of Sales and Marketing Management.

If you’re not part of Team Green you may not be on your clients’ preferred list for much longer. Green? Isn’t that about people in sandals and beards saving the polar bears? Maybe, but today we’re talking about green business, and how it’s affecting you, your clients and your sales.

Sixty-five of the world’s largest corporations, from Abbot Laboratories through BSkyB, Ford, Microsoft, Philips and Coca-Cola to Wal-Mart wrote to all their suppliers last year and asked them to disclose how they were going to cope with climate change.  And green business is not just about climate change, it’s about sustainable forests and sustainable fisheries, it’s about renewable energy, water, waste, carbon footprints and scarce resources. Open any FTSE 100 Annual Report and the Corporate Sustainability Report drops out, showing how they are making the world a better place. In a word, Green Business is going mainstream, and your clients will soon be knocking on your door to ask what you’re doing about it, if they aren’t already. 

In practical real-world terms, what does all this mean for you and your sales team? It’s about understanding the client’s needs - something you do all the time - but recognising that those needs are constantly changing. They can’t be truly green without your help. For your client, there are three main drivers towards sustainability - Reputation, Revenue and Regulations. Help yourself by helping your clients with these. 

But hang on! Before you start, do you know how your own organisation measures up? Have you seen the corporate environmental statement? Does your company work to ISO 14001 or any of the other sustainability standards? Make sure that you and your team can give the client the full picture. Make sure the people in back office and boardroom are giving you the full picture!

Reputation is the Number One driver which puts suppliers in the spotlight. Since the supermarkets found horse meat in their burgers and the press revealed the sort of conditions that Apple iPads were made in, these organisations have been desperate to claw back their credibility. Everyone else has been desperately looking at suppliers to make sure that nothing like that will ever affect them. If you do the minimum, their reputation is safe. If your company is doing more than it needs to, you’ll be more attractive as a supplier. On the other hand, in the face of the consumer your clients need to put their hands on their hearts and tell the world that they’re doing their greenest best - and if you’re not green and you supply them you’re making liars of them.

Number Two, Revenue, or profitability, is a key part of sustainability. Sustainability is about doing more with less. If we can build the same product with less material we’re saving material cost. We may be saving production time, using less energy and making less waste as well - all driving more profits to the bottom line. How can you help your customer do more with less? Can you offer a product, a process or a system which will make your own clients more efficient and save them money? Makes it easy for them to make the business case! Can you do it before your competitors do?

Number Three - Regulations - everyone’s favourite! Quite simply, if you’re not complying with the increasing number of regulations it’s a deal-breaker - at the very least. Of course it’s not just the regulations that your own organisation has to obey, you have to think about it from the customer’s point of view. ISO 14001 - Environmental Management and ISO 26000 - Social Responsibility are desirable but not legally binding. On the other hand, REACH (Registration, Evaluation, Authorisation and restriction of Chemicals) and the CRC Energy Efficiency Scheme are just two of the many regulations which must be observed to avoid penalties.You don’t always need to be an expert in these things, but you do at least need to be aware of the jargon and know whether these are issues you can help with. Things are changing all the time, so if you keep up to date on the regulations affecting your particular market, part of your added value could be helping your clients keep up to date as well.

Objections? There are always objections, and there are very strong opinions on both sides of the question. You don’t need me to tell you not to get into an argument! 

“You’re not doing nearly enough!” To answer that you need to be clear on exactly what your organisation is doing and you need to know that what you are offering will comply with the standards that your client must meet. Ideally you’ll also know what’s being planned to make your organisation even greener.

At the other extreme: “This green rubbish?” (Didn’t the prime minister say something like that?) “It’s all a waste of time and money!” Actually, sustainable business is all about efficiency and doing more with less. Companies adopting a sustainable strategy are finding that it generally saves money. Savings you can share with your clients, even if they don’t believe that sustainability is a good thing.

Should you walk the sustainable talk? Certainly there will be some people who will be really upset if you turn up in a gas-guzzling 4x4. How about rewarding your top salesman with a hybrid? The Porsche Panamera, for example, or maybe a Lexus. There are green cars right across the range now. The BMW i3 is certainly worth a look. With 0-62mph in 7.2 seconds and a range of up to 200 miles it’s not at all what you expect from an all-electric car!

“It’s just a fad, isn’t it?” No, sustainability is here to stay. It’s the new way of doing business and the new way of staying in business, in the face of expanding world population, rising energy prices and declining resources. If sustainability was just a fad, would Tesco have set up its Knowledge Hub - the world’s largest sustainable supply chain resource? Would 722 institutional investors holding US$ 87 trillion in assets be supporting CDP to monitor the climate risk in their portfolios? Would Dow Jones have been publishing a sustainability index for the last 15 years? Would we have ever heard of the Global Reporting Initiative, Environmental Impact Statements or Carbon Footprints?

So sustainability is firmly here to stay. And as always, to succeed in this competitive world we all have to keep that one jump ahead. It’s not enough to be lean and mean. This time, you’ve got to be lean, mean and green as well.

What is the circular economy?

BSI, the UK standards organisation, hosted a stakeholder day on Waste Prevention and the Circular Economy this week. I joined a round table discussion on "What is the circular economy?"

The definition we came up with was:

“Sustaining economic viability without compromising resources, including land, water and living space, or compromising the environment.”

There was a wide range of opinions and ideas. Some saw little difference between our definition and sustainable development. The implicit “fair shares for all and fair access to materials” is very similar to the original definition of sustainability in the 1987 Bruntland report. 

We turned our attention to how we would achieve the circular economy. Legislation will define what is needed whilst standards will show how it can be done. We need something like a Kyoto agreement for the circular economy, hopefully more successful than the original Kyoto agreement. EU regulations for eco-design, material circularity and so on can contribute to the establishment of the circular economy, but we need global action both by governments and companies. 

Marks and Spencer was cited as an example. They demand that their Turkish suppliers measure their carbon footprints  - something they would never consider doing without pressure from M&S as a major customer. 

Legislation and taxation imply penalties but it is far more important to have incentives at all levels. We need clear strategies, tools, research and education, including education for both designers and consumers. Clear communication and explanation of the ideas can generate more consumer and employee loyalty.

The question was raised whether the circular economy could apply to all sectors and all industries. We thought there should be an overarching concept but that standards should be more local as components of the whole. Some thought that the definition of the circular economy would change as we moved forward and get tighter and tighter. Others pointed out that there are already some 200 environmental standards and surely yet another standard is not needed.

We looked at how different nations will achieve the circular economy at different rates. For example, in some emerging economies the establishment of landfill sites is an advance, so there is an awful long way to go towards achieving zero to landfill. On the other hand developing nations are used to scarcity of resources and in many cases are far better at making good use of resources as a result.

You could say that the circular economy is work in progress.