Business Case for Sustainability

What is Sustainability?
Sustainability in business is a strategy to ensure that an organization’s operations contribute positively to society not only in terms of profits but also in the way it conducts business.  This includes managing and taking responsibility for environmental impacts.  Sustainability is generally described in terms of meeting the requirements of society (people), the environment (planet) and the economy (profits).  In a broader societal sense, sustainability means that we are able to meet the needs of today’s society without endangering the survival of future generations. The term ‘Green IT’ is used to describe projects initiated to positively contribute to a sustainability business strategy.  

Standard Business Drivers
Businesses are generally motivated to take on sustainability initiatives for one or more of the following reasons;
1.    Public Relations,
2.    Business Economics, and,
3.    Social License to Operate.

Public Relations
Initiatives motivated by public relations driver are aimed to gain competitive advantage in the eyes of consumers, meeting stakeholders’ demands and helping an organization attract and retain the best and brightest employees.  According to Bob Willard, the author of “The Sustainability Advantage” and “The Next Sustainability Wave”, small businesses can benefit from reduced attrition and recruitment costs as well as increased employee productivity as a result of sustainability initiatives¹.  

For Green IT initiatives undertaken by organizations where the IT department is a supporting department, it is particularly important to consider the implications of publicizing Green IT initiatives if the rest of the business is not participating and has not considered their own sustainability implications.  

Organizations that take a purely public relations approach have been accused of ‘greenwashing’ when they advertise environmental practises without actually implementing sound practises.  

Many companies have found that publicizing efforts too soon can do more harm than good.  Most experts advocate a cautious approach to public relations with respect to sustainability initiatives.

Business Economics
Many sustainable IT initiatives have been started on the basis of traditional cost-benefit analyses.  In the case of reducing energy consumption, projects such as active power management can be inexpensive to implement and provide immediate cost savings.

Many organizations also now believe that regulation is inevitable.  As such organizations taking on sustainable IT initiatives now are ahead of the curve and have more opportunities to innovate and choose their own solutions.  However, it is critical that benchmarks be set and that progress is tracked to ensure that new regulations do not penalize progress already made.

Social License to Operate
All around the world government regulations are developing and are expected to become more and more stringent in requiring businesses to take responsibility for their environmental impact.  Businesses have the opportunity to be ahead of the curve if they act now to avoid expensive retrofits or timelines they cannot meet once regulations are established.  

In addition to meeting government regulations, organizations are increasingly talking about sustainability in terms maintaining their ‘social license to operate’.  The concept of a social license to operate signifies a business’ understanding that the support of the communities in which it operates is critical for success regardless of whether or not the operation meets government regulations.  This concept is particularly important for mining, extraction and resource-intensive manufacturing companies where there are direct impacts on the local population that, if not attended to, can hinder and completely derail a business’ operations.  In a broader sense, if organizations do not take responsibility for their actions, they can lose their support from the public².  To quote Esty and Winston in “Green to Gold”, “the logic of corporate environmental stewardship need not stem from personal belief that caring for the natural world is the right thing to do.  If critical stakeholders believe the environment matters, then it’s the right thing to do for you business.²”  

In addition to the standard business drivers for sustainability, small businesses may also be driven by the personal values of the executives or founder.  

Are you looking for ways to incorporate sustainability practises into your IT department?  Check out our Green IT Guide and Toolkit for more information.

Resources
1.  Willard, Bob. The Next Sustainability Wave: Building Boardroom Buy-in. Gabriola Island: New Society Publishers, 2005.
2.  Esty, Daniel C., Winston, Andrew S. "Green to Gold: How Smart Companies Use Environmental Strategy to Innovate, Create Value , and Build Competitive Advantage."  New Haven: Yale University Press, 2006.