Thought Leadership
17
MAKING SUSTAINABILITY PAY
CROSSING THE DIVIDE
John Curtis, who heads up climate change services at the global consultancy ERM, detects a paradigm shift in sustainability
B
usiness people are coming to think of sustainability in fi nancial terms – that’s value rather than cost. For many years the corridors
of environment and health and safety departments were full of talk of risk. Today it is also about value and those with direct fi nancial responsibility are taking greater interest in the EHS and indeed the wider sustainability function. When sustainability is seen as an opportunity to do things diff erently or better, the language of business improvement comes to the fore. Imagine two CEOs. One asks: “Where
WWW.CARBONWARROOM.COM WWW.CARBONWARROOM.COM
are our biggest exposures? Give me the results of the last HSE audit.” The other asks: “How can sustainability help us get cost out of the supply chain? Also bring me some revenue growth ideas from what you learn from our suppliers and customers.” The latter expects regulatory and corporate policy compliance as a given, but gets more from his sustainability function. Sustainability can bring new solutions
to old problems. One ERM client viewed their obsolete stock as a disposal problem and sustainability cost. But the new breed of sustainability executives
has another way of looking at this problem. The root cause lay upstream in the lack of minimum order quantities, production executives standing fi rm on least-cost batch sizes and distributors not playing their usual role between large producers and small customers. The result was excess production sitting in the company’s warehouses until beyond its sell-by date. But by going to the heart of the issue, the company not only cut waste-disposal costs, but improved cash fl ow and inventory turns. Even the people element of sustainability is attracting innovation.
ISSUE 04. SEPTEMBER 2011 ISSUE 03. JULY 2011
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