Environmental Leg of Corporate Sustainability

After getting an idea about Key Performance Indicators, we can move onto learning more about corporate sustainability. A great place to start is where most people know sustainability, the environment.

Environmental  sustainability statement.

Environmental sustainability statement.

I recently went on vacation at a resort in Mexico where environmental sustainability very pronounced. It is their brand identity.

As the statement to the left shows, they had the common bathrooms outfitted with toilets that didn’t require water. The resort calculated that it would save them 115,000 gallons of water per year. That sort of saving would drop to the bottom line.

Where the resort was built, it was originally a jungle. Much of the vegetation and wild animals are native to the area. Since it is a natural setting, the grounds maintenance upkeep would be minimal in comparison to converting common areas into grass areas, like a North American park.

Why is this all important? Why make it apart of their brand?. Consumers are looking at the environmental sustainability of a company in making their purchasing decisions (see below chart).

Drivers: Description of this image follows.

Source: Mintel Sustainable Food and Drink 2011

Lastly, as the below chart shows, over 50% of consumers are actually willing to pay more for a product that comes from a sustainable company.

Pay Extra: Description of this image follows.

Source: Mintel 2011

Even the harshest industries are becoming environmentally sustainable. Shell Canada, one of the biggest oil companies in the Canada, has a goal of cutting CO2 emissions that its operations produce.

Here are some stats and facts from  The Economist in regards to environmental sustainability

1. “More than half the companies listed on the world’s 31 largest stock exchange publish some environmental data” (Schumpeter (2014, March 29). A green light. The Economist.)

2. “Including the LSE (London Stock Exchange) and Deutsche Boerse, over 80% of large firms publish this sort of data, ranging from their greenhouse-gas emissions to the return on investment of projects with aim to reduce pollution” (Ibid).

Environmental sustainability is not only a ‘concept’ or ‘idea’ for the environmentally conscious, but a viable portion of a sustainable business model. “A study published by Harvard Business School in 2011 looked at 180 firms over 18 years and found that those which paid the most attention to environmental matters also did best when measured by share prices and earnings” (Ibid).

All companies can be environmentally sustainable. During the journey to becoming environmentally sustainable, different goals or KPIs are tracked to rate performance. Different KPIs used include: level of carbon emissions, water usage, natural gas usage, electrical usage, and tons of garbage taken to landfill.Next week, we are going to take a look at the people aspect of corporate sustainability.

Kevin

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