Environmentally sustainable business practices can help cut costs and give firms an edge, says a consultant.
Many companies delve into sustainable practices and products as a marketing exercise but it should be a “whole business” process that extends from supply chain to employee practices, said Giselle Weybrecht, author of The Sustainable MBA: The Manager’s Guide to Green Business, who writes a blog under the same title.
More considered use of water, energy, fuels and raw materials could help businesses manage shortages and price rises, and a reputation for sustainable practices could also give a company a competitive edge with choosy consumers and in attracting skilled staff, she said.
“It is a strategic issue for businesses and something they can strengthen their businesses with,” she said.
Ms Weybrecht, who guest lectures at business colleges, is speaking in Adelaide this month at Womad Earth Station, from October 21-23 at Belair National Park.A report from UK sustainable business analyst Verdantix forecasts Australia’s spending on sustainability would almost double from $1.6 billion (US$1.7 billion) in 2010 to $3 billion (US$3.1 billion) by 2014, pushed along by the introduction of a carbon price.
It predicted spending on “smart grid” technology and electric vehicles would grow fastest.
Expenditure will reach $US1.8 billion this year, according to its Australian Sustainable Business Spending 2009-14 report, with consumer brands making up 25 per cent of the spend, miners investing 20 per cent, oil and gas firms 12 per cent, travel and transport accounting for 6 per cent, and utilities 5 per cent.
“Many Australian business leaders perceive climate change and sustainability trends as a break on growth and a cost to business,” analyst and report author Susan Clarke said. “But carbon regulations, rising energy prices and natural resource scarcity also create new market opportunities.
“A pure focus on blocking and tackling new energy and climate change regulations will protect margins in the short-term but misses out on big opportunities like bio-diesel refining.”
Spending in the US is expected to boom from $US28 billion last year to $US60 billion by 2014, Verdantix said, noting “executive awareness of the business benefits of sustainability is on the rise”.
The US is also home to eight of the world’s top 10 “sustainability-conscious” MBA programs, as determined by higher education ranking body QS on TopMBA.com.
Ms Weybrecht said it was a “myth” that converting to more sustainable practices must be costly.
“It depends on how the company approaches it,” she said.
“For some companies there is an investment involved, (others) find if they cut out inefficiencies in the system or reuse different waste streams that they’re saving money right away before they’re investing money in sustainability.
“For small business, sustainability is even more relevant than for big business because they can find ways to save money, to strengthen their products, to find new markets … there’s even more opportunities to look at this from a strategic point of view.”
She said businesses wanting to implement more sustainable practices can start by looking at their supply chain and product life cycle.
“Whether it’s a product or service, looking at how it’s designed, what kind of materials or ingredients are used and where they’re coming from, how it is produced, how it’s packaged and transported, how the customer uses it and then whether it’s recycled or reused or thrown away,” she said.
