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 10 June 2008
Department for Innovation, Universities and Skills (DIUS)
 
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Business Case for Sustainability

Clear and straightforward guidance on successfully identifying, prioritising and managing the impact of sustainability issues on business:

Value, Growth, Success: How Sustainable is Your Business?Realising the Value, Enhancing Business Success
Sustainable development is an area of risk that - when managed effectively - can create opportunities to innovate, differentiate and enhance reputation and is becoming fundamental to long-term business success. By addressing sustainable development issues, businesses of all sizes have found that they can have a significant impact, and at the same time meet - and sometimes exceed - their business objectives. 

Business Case

Defra and Department for Business, Enterprise & Regulatory Reform (BERR) have convened a new business taskforce to identify ways in which companies can move to more sustainable consumption and production practices following the commitment made by the UK Government in its Sustainable Development Strategy - 'Securing the Future'. The new taskforce replaces the business-led Advisory Committee on Business and the Environment (ACBE). For more information see  defra's news release Cambridge Programme for Industry press release The World Business Council for Sustainable Development (WBCSD) works to define the business case for sustainable development, and put that vision into practice. It has identified eco-efficiency, corporate social responsibility and innovation as the main business contributions to sustainable development. The WBCSD believes business can benefit from pursuing sustainable development in two basic ways - by driving cost efficiencies and by generating top-line growth through innovation and new markets. 

Driving Down Costs

Waste minimisation, process optimisation and energy efficiency are good for business, as well as the environment. So too is moving from costly "end of pipe" fixes to managing environmental impacts in an integrated way. 

Pollution and Competitiveness

  • Pollution is normally a sign of poor technology and bad management eg waste or incomplete use of resources
  • Reducing pollution through better technology will almost always lower cost or raise product value/differentiation
  • This offsets (at least in part) the cost of compliance with environmental standards
  • But doing so requires innovation, new approaches to product design, production, distribution, service
  • Addressing environmental improvement without innovation eg via end of pipe waste treatment, clean-up or remediation - will inevitably raise cost and harm competitiveness
    Source: Professor Michael E Porter, Harvard Business School. "Towards a New Conception of the Environment-Competitiveness Relationship" [Michael E Porter and Claas van der Linde: The Journal of Economic Perspectives 9] (1995)
     
Adopting best practice works and it can improve productivity and profitability significantly. The Government's Envirowise and Action Energy programmes provide practical help and advice to business on cost-savings measures. 

Management Systems

All businesses can benefit from minimising their environmental impacts in an structured way. Many use formal environmental management schemes such as ISO 14001 or the EU's Eco-Management Audit Scheme (EMAS). These formal systems can be implemented in a convenient step-by-step approach using the new British Standard BS8555 which includes environmental performance evaluation, and is especially suitable for smaller businesses.
The Sigma Project developed practical guidance and tools for organisations to address economic, environmental and social impacts in an integrated way. It is supported by BERR and managed the British Standards Institution, the Institute of Social and Ethical AccountAbility and Forum for the Future. More advice on standards and EMS's sources of help, useful links and the Governments position statement on Environmental Management Systems can be found on Defras website. 

New Ways Of Doing Business

Innovation and new technology are pervasive in the modern economy. This is creating unprecedented opportunities to meet society's needs and aspirations with greatly reduced environmental impact. This is not just about using cleaner and leaner technologies - although this will be important. It is also about new ideas and re-thinking business models to find smarter forms of production and consumption that use resources more productively.   Improving the way goods and services are designed, made, delivered, used and disposed. Providing greater value, performance and choice for the consumer - as well as reducing environmental impacts.

Becoming a Leading Player

The Government's aim is for the UK to become a leading player in the new and growing markets for green energy and products, waste minimisation, recycling and re-use. It is supporting business through a range of activities including the following programmes: Carbon Trust - Government backed but business led, it supports the development and adoption of low carbon technology. Renewable Energy - Supports high quality, innovative R&D projects that offer prospects for improving the performance and/or reducing the cost of energy derived from renewable sources. Waste and Resources Action Programme (WRAP) - Helps to create new markets for recycled materials and to promote the development and take-up of new recycling technologies 

Enhancing Reputation

Increasingly, business is expected not only to provide reliable, competitively priced goods and services but also to play a responsible role in society and take environmental issues seriously. In a globalised world, people also want to feel sure that the businesses are acting in a sensitive and responsible way in developing countries as well as at home. There have been a number of cases where companies have encountered significant public concern over their activities. Some have been over environmental issues, others over human rights, while some businesses have suffered as a result of working conditions in factories run by sub-contractors in developing countries. Corporate social responsibility is about meeting public expectations while improving business performance. It can bring real business benefits by reducing risks, enhancing brand value, fostering customer loyalty and motivating staff. To find out more visit the Government's Corporate Social Responsibility website. 
 

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