A clear business case is vital to generating profit from sustainability. It defines how a given innovation will add business value: companies that profit from sustainability are almost 200% more likely to develop sustainability business cases. The business case is often integral to the company’s overall strategy. “Making the sustainability strategy part of the global business planning process really turned things around for us,” says Peggy Ward, director of the enterprise sustainability strategy team at Kimberly-Clark. “We were able to demonstrate the competitive advantage that sustainability could provide.”
Retailer Marks & Spencer is a prime example of the business case in action. In 2007, the company announced its Plan A, which included 100 sustainability commitments over a five-year time frame. The company extended this in 2010 to 180 commitments to achieve by 2015 to become the world’s most sustainable major retailer. The plan has seven pillars that address customer involvement, climate change, waste, natural resources, becoming a fair partner, health and the company culture. The company’s achievements include becoming carbon neutral, giving customers the opportunity to give back by donating clothes, and integrating sustainability into its financial performance and reviews. The company reports that the plan has delivered $296 million in economic benefits.4
Clear Business Case is Vital
About three times as many respondents who said that sustainability added profit had a business case for sustainability. That’s been consistent over the past 3 years of our survey.
Often, successful business cases mesh with a company’s business culture. Former Campbell Soup CEO Conant, for example, argues that many food companies have a “reap what you sow” mentality. He points out that the industry is heavily represented on surveys of the most socially responsible U.S. companies. For Dell, sustainability bolsters the company’s focus on efficiencies. “Dell abhors waste,” says Dell’s Pflueger. “Any inefficiency — whether it’s excessive days of inventory or energy waste — is something the company will want to address. Our approach to sustainability fits the company culture.”
The Hard-Nosed Numbers
Business cases for sustainability often focus on the numbers. Sprint, for example, invests in making its phones very easy to take apart. That investment allows them to recycle waste and refurbish phones for more price-sensitive markets.