Why businesses should put sustainability at the heart of decision-making

Ahead of the CleanEnviro Summit Singapore, World Resources Institute speaks to Eco-Business about sustainability in decision-making & transforming information into action.

Environmental think tank World Resources Institute (WRI) buttresses its lyrical-sounding mission - “to move human society to live in ways that protect Earth’s environment and its capacity to provide for the needs and aspirations of current and future generation” - with independent research that drives  meaningful change on the ground.

Founded in 1982, it works with government, business, and civil society to turn ideas into action and to scale up solutions for far-reaching impact. Working in 50 countries, it focuses on six, inter-related thematic challenges: forests, water, food, climate change, energy, cities and transport.

These challenges are addressed by helping businesses develop strategies that drive growth while supporting sustainability, empowering people with access to information and environmental rights, and shifting investment toward sustainable development.

Ahead of the upcoming CleanEnviro Summit Singapore in June, WRI Director of Sustainable Business Initiativies, Samantha Putt del Pino, and President and Chief Executive Officer, Dr Andrew Steer, speaks to Eco-Business about why environmental sustainability should be integrated into decision-making.

Putt del Pino currently manages the Next Practice Collaborative within WRI’s Markets & Enterprise programme, which focuses on engaging companies in developing types of ‘next’ practices required in a low-carbon economy. It is challenging work as many companies remain reluctant to invest in innovation for sustainability, but she pointed out, “Smart companies will invest now, sometimes fail, but ultimately win big on both sustainability and business growth.”

Putt del Pino joined WRI in 2000 and previously led WRI’s U.S. Climate Business Group, a cross-sector network of 36 Fortune 500 companies with a common interest in developing strategies to thrive in a carbon-constrained economy. 

Dr Andrew Steer became President and CEO of WRI in August 2012, bringing with him 30 years of international development experience from working on the frontline in Asia and Africa and at a senior level in international policy roles.

Prior to joining WRI, he was Special Envoy for Climate Change at the World Bank, guiding climate change efforts in more than 130 countries and overseeing the $7 billion Climate Investment Fund. He was also a member of UN Secretary-General Ban Ki-moon’s High Level Panel on Sustainable Energy for All, and on the B20 Board on Green Growth.

He will be speaking at the Clean Environment Leaders Plenary on June 2 at Marina Bay Sands, Singapore. The Plenary is part of the CleanEnviro Summit Singapore 2014, a global platform for government and industry leaders to share solutions that address environmental challenges in the context of the waste-water-energy nexus in Asia’s growing cities.

How can more companies, entrepreneurs and government agencies be persuaded to integrate environment sustainability into their strategic decision-making process? Can you share some case studies?

A combination of factors can build the case for integrating environmental sustainability into decision-making. Environmental sustainability is fundamental to the long-term vitality of industry in any country because environmental stresses put companies at risk.

Failure to innovate for sustainability means much wider system failure that threatens livelihoods.

Starbucks, for example, has noted how the impacts of climate change are negatively affecting coffee supplies and pose a significant risk to its global business. According to reinsurance company SwissRE, unprecedented rainfall in Thailand has made flood insurance expensive and scarce, necessitating proactive measures to reduce the risk. A “business-as-usual” approach may seem less risky in the short term but by deferring the costs of action, companies are exposing themselves to even greater risk and financial losses in the future.  

The New Climate Economy project, which WRI is a part of, helps governments, businesses, and society make the economic case for taking action on climate change. In September, it will make recommendations on actions and policies that can achieve high-quality economic growth at the same time as addressing dangerous climate change.

Stakeholders are another important driver of business action. Today, companies face much more scrutiny. In our connected world, stakeholders can find information that might not have been readily available before. For example, investors have filed more than 100 shareholder resolutions related to climate change in each of the past two years, as reported by CERES, a sustainability advocacy group, as part of its coordination of the Investor Network on Climate Risk.

Concerned stakeholders now also have the ability to communicate with the world about a company or government’s action. For example, in late February, Greenpeace called out Proctor & Gamble (P&G) for supply chain links to deforestation and destruction of habitat in Indonesia. In April, after thousands of activist emails and phone calls to the company and public demonstrations, P&G announced that it would eliminate deforestation in its palm oil supply by 2020.

A smart business leader may recognize the economic and stakeholder arguments, but to take action, they need practical tools and strategies. Case studies can help because they show exactly what has worked. WRI has gathered several of these stories in Aligning Profit and Environmental Sustainability: Stories from Industry, which highlight how companies have used a “sustainability lens” to identify opportunities and gain competitive advantage. 

For example, lightweight metals engineering and manufacturing company Alcoa uses a variety of strategies, including linking employee compensation to achieving the company’s sustainability goals and helping customers meet their own environmental goals. In one year, Alcoa estimated that efforts at improving environmental performance saved the company $100 million.

Innovation for sustainability invariably carries the risk of failure. How do companies or cities that have successfully managed the aversion to innovation-related failure go about getting buy-in from their investors, employees and agencies?

The alternative to innovation is obsolescence. And the risk of failure goes well beyond a company. Failure to innovate for sustainability means much wider system failure that threatens livelihoods. 

Our growing population is putting intense pressure on limited water, food, energy, and natural resources. Our cities are quickly becoming mega-cities and old models of transportation are proving inadequate. Big, bold action is necessary.

Real commitment to innovations that solve global environmental challenges can bring business benefits that balance out the failures. There are several companies today that succeed by making innovation for sustainability part of their corporate DNA, like modular carpet manufacturer Interface, which began “Mission Zero” in the mid-1990s with the aim of eliminating any negative impact by the company on the environment by 2020. Now, Global 500 companies like Nike, Samsung, and Unilever are actively seeking to inspire new ideas by focusing on solutions to energy, water, and raw material challenges.

Toyota was the first to find a means of taking hybrid vehicles to scale and they continue to reap the rewards—though others have caught up quickly. I think you will continue to see companies like these breakthrough with new products, services, and business models.

We need to be very clear about what happens without investments in innovation.  A popular phrase on the need to act on climate change sums this up nicely: “The most expensive thing we can do is nothing.” Smart companies will invest now, sometimes fail, but ultimately win big on both sustainability and business growth. 

Securing buy-in is challenging. WRI worked with about a dozen companies who were facing such a challenge, trying to make a case for big, bold strategies to address sustainability.  Together, we created a Sustainability SWOT or sSWOT, which employs the familiar framework of Strengths, Weaknesses, Opportunities, Threats (SWOT). But the sSWOT takes a slightly different approach and adds a sustainability layer to help companies put environmental challenges in the context of other big changes, drawing links to other internal priorities and decisions. It is one way to make a compelling case for action, and secure internal and external support for truly innovative strategies for environmental sustainability.

Finally, we need to be very clear about what happens without investments in innovation.  A popular phrase on the need to act on climate change sums this up nicely: “The most expensive thing we can do is nothing.” Smart companies will invest now, sometimes fail, but ultimately win big on both sustainability and business growth.  

Which of the data and strategy tools developed by the World Resources Institute are particularly suited for identifying and addressing environmental risks that pose a threat to maintaining a clean and sustainable environment in Asia?

Turning information into action is at the heart of WRI, and our tools are used in Asia and around the world.

These are some of them:  

  • The Aqueduct Water Risk Atlas allows companies, investors, and others to see where their facilities are likely facing, or could face, increasing water-related risks. It maps 12 indicators of water risk, from the watershed scale to the country or river basin scale, which is immensely valuable for those seeking to prioritize time and resources when managing facilities and supply chains. WRI did an analysis last year, for example, which showed where proposed coal plants in China overlap with areas of high water stress, suggesting important policy considerations to manage demands for water and energy.
  • Global Forest Watch, which launched earlier this year together with more than 40 partners, literally puts forest risks on the map. WRI’s president, Andrew Steer recently co-wrote an Op-Ed with Paul Bulcke, the CEO of Nestle, explaining how this tool and the commitments from business leaders in the Consumer Goods Forum have the potential to halt deforestation. With this tool, organisations can use near-real time satellite images to monitor forest areas and ensure that production of palm oil, soy, beef and paper pulp, for example, are not driving further destruction of forests around the world.
  • WRI’s Climate Analysis Indicators Tool, or CAIT 2.0, provides free online access to comprehensive greenhouse gas emissions data sets, as well as other climate-relevant data, to enable analysis and communication on a wide range of climate-related data questions. It includes a full six-gas, multi-sector, internationally comparable emissions data set for 186 countries and all U.S. states. Through its powerful yet simple and easy-to-use online interface, CAIT 2.0 allows users to view and compare GHG emissions by country or U.S. state, and to create clear and simple data visualizations from both a desktop computer and a mobile device.
  • The Greenhouse Gas Protocol is the most widely used international accounting tool for government and business leaders to understand, quantify, and manage greenhouse gas emissions.  The Greenhouse Gas Protocol, a decade-long partnership between the World Resources Institute and the World Business Council for Sustainable Development, works with businesses, governments, and environmental groups around the world to build a new generation of credible and effective programs for tackling climate change.
  • BRTdata.org is a platform for visualizing the growth, impact, and diversity of the global bus rapid transit (BRT) industry. BRT is a network of high quality, advanced buses running on dedicated lanes united by a strong brand and attention to user experience. EMBARQ analysis shows that BRT cuts down travel times, improves traffic safety, and reduces greenhouse gas and local air pollutant emissions, all of which create more sustainable, livable cities. BRTdata.org is designed for city leaders and transport experts, giving them access to current, reliable data on BRT in order to improve and expand sustainable transport systems worldwide. 

To hear more from Dr Andrew Steer and other experts, register for the CleanEnviro Summit Singapore 2014 here.

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