21/02/2012 17:47 GMT | Updated 22/04/2012 06:12 BST

Twelve Principles for Sustainable Business

There is much talk of business needing to become more sustainable, in the face of an increasing number of challenges, such as climate change, peak oil, new legislation, repetitional risk, and increasing costs. That companies need to change is no longer the debate, but there is a need to understand (in easy terms) what businesses could be doing and how this action will deliver sustainable business success, as well as helping to save the planet.

The Global Research Project In Search of Sustainable Business was established to take this challenge forward, to 'join up the dots' and to help business leaders develop holistic, rigorous and business-focused approaches.

Following 18 months of detailed case study development and analysis, we are pleased to share some of the initial insights from the first phase with you, distilled into 12 principles for sustainable business. Many of the lessons we believe are transferable and, therefore, helpful to businesses in all sectors.

1. Think Big! Carbon is not the only issue. By considering all aspects of sustainability, including resources and supply, waste and recycling, people and community, biodiversity and energy, it is possible to make a greater and more efficient impact.

2. Develop Your Structure: An appropriate measurement and reporting framework for environmental, social and economic impacts will help provide visibility, focus and discipline. Life-cycle impact analysis enables you to identify opportunities for cost savings as well as improved sustainability performance.

3. Think Entrepreneurially: See if you can you incorporate sustainability principles to generate new income streams, differentiate your goods and services and enhance competitive advantage, e.g. production of renewable energies as a sideline to benefit from appropriate feed-in-tariffs? Look for significant operational cost and risk reduction opportunities that can be achieved by integrating sustainability initiatives.

4. Look at Product Innovation: Consider ways of innovating in product design to reduce the amount of virgin raw materials needed, increase the use of recycled content and establish suitable low carbon alternatives. Consider offering value-adding customer choice, perhaps changing your model to focus on services that look after the complete product lifecycle.

5. De-risk Your Business Model: Establish how dependent your products and business operations are on non-renewable inputs; look to find ways at reducing your long-term dependency and business risk.

6. A Structured Approach to Energy and Carbon Reduction: Think about the 'energy hierarchy' - can you reduce the initial demand, and then improve energy efficiency, before considering the optimal mix of renewable energies.

7. Re-think Resources and Waste: Consider adopting a closed-loop or cradle-to-cradle approach to resource management: find ways to re-use your own waste, or even waste from other industries/neighbouring businesses; one man's waste is another man's feed! Huge benefits can be experienced; up to 70% of a product's environmental impact results from gathering the raw materials!

8. Sustainable Supply Chains: Seek out suppliers who share your vision and values. Share the challenge and work collaboratively with your key suppliers. But ensure that commercial arrangements support and enable, rather than inhibit investment through the supply chain.

9. Align with Other Business Initiatives: Try integrating the key principles of 'lean', continuous improvement and energy, carbon and waste reduction within your own services and processes. Look for the full range of beneficial impacts that may be possible; scarcity and cost challenges may be a route to deliver improved resource utilisation, waste reduction and enhanced profitability.

10. Collaborate to Compete: Nobody has all the answers. There are a surprising number of people and organisations out there, grappling with similar challenges - go find and collaborate!

11. Sell the Business Case: Model all intended benefits and costs to establish initial business case expectations. This enables you to sell the new approach to your board, customers and other stakeholders, and can help win over any sceptics.

12. Leadership is Crucial: Winning 'hearts and minds' is always key. Effective leadership, awareness raising and promoting the benefits will all help to drive change. Employee engagement is vital, try and tap into the latent desire for improvement; set the challenge and see the great ideas they can generate. Try and incentivise the right behaviours, with a balance of 'stick and carrot'. Finally, change is hard - persevere! Even when the 'going gets tough', never give up!

Back to the business case: what impacts are these leading businesses able to deliver? Well, the results are fairly impressive:

• 40% reduction in carbon emissions and energy use is already achievable.

• Sustainable products can offer significant whole-life cost advantages, with up to 40% savings.

• Working towards closed-loop models can enable even greater levels of waste reduction, re-use/recycling and associated carbon reduction (70%).

• Strategic market re-positioning, integrating sustainability principles in goods and services, can deliver improved profitability, in some cases doubling margins.

• Sustainability thinking can also provide a route to creating and preserving employment, while simultaneously driving improved margins.

• Payback for specific initiatives can be rapid, often within one to two years.

Ultimately, the transition towards sustainable business is inevitable, given the combined impact of the challenges we face. For those businesses looking to fully embed sustainability principles, there is also a big prize waiting. And who wouldn't want some of that?


If you are keen to learn more from our research and case studies, you can download a copy of the full Report when you join the our project online community at The Sustainable Business Lab.

This blog is based on an article originally published by the author in Sustainable Business magazine.