Hong Kong, like other well-developed countries and cities, needs to work hard on “sustainable development” to create a better balance between the economy, environment and society. Businesses, whether small or large, have a clear role – and responsibility – to contribute to ensuring that Hong Kong’s status as a world class city is not jeopardized.
In fact leading corporations know that sustainability is good business. It’s no longer a practice done for legal or philanthropic reasons. Sustainability is a growth strategy. The idea might seem counterintuitive in a global economy including Hong Kong’s companies still trying to find its legs after the recent downturn. But cutting-edge companies are reaping real benefits from their sustainability programs, according to a recent IBM Institute of Business Value survey of executives in 320 companies.
Sustainability is core to these companies’ business strategies. More than just a cost-cutting move, it is helping them gin up new products, assess future risks, and promote industry leadership. More crucially, sustainability is a competitive advantage. One that’s giving these innovators the skills they need to thrive in a new economic environment where basic resources -— water, energy, and raw materials -— are increasingly scarce.
Organizations realize that "business as usual" just won’t cut it in the 21st Century. Skyrocketing population growth and the rise of massive new markets are transforming the global economy. Organizations that prepare for this shift will come out on top.
Innovators share a comprehensive approach to their sustainability programs. Using the study data and analysis, IBM identified best practices and strategies, uncovering what companies learned from their experiences. Three guiding principles emerged:
--Strategy: Companies need to outline a sustainability vision that’s linked to a well-defined strategy, just as they would with any other key initiative. More than half of the businesses IBM spoke with have taken this step or are working on it. They’re identifying issues and measuring, monitoring, evaluating, and communicating their strategies. However, only 40 percent have documented a detailed strategy that includes priorities and budgeted resources, while just 34% are executing a plan with defined roles, processes, and systems.
By comparison, what sets the innovators apart is how tightly they integrate their sustainability strategy into their business vision and how involved management is. As a core tenant, it’s considered at every level of operations, R&D, marketing, and recruitment.
--Synergy: Businesses need to create comprehensive programs based on cooperative action. Most companies are focusing on reducing their environmental impact through steps, such as cutting energy use and greenhouse gas emissions and improving the environmental footprint of products through repackaging and design. This is great progress. Yet too often these initiatives are done piecemeal within a company.
Sustainability leaders have programs that are woven throughout the entire company and that include employees, customers and partners. They measure cost-cutting efficiencies and the environmental, financial, and brand impact of energy, water, greenhouse gas emissions and waste management programs, and the environmental footprint of existing products throughout their lifecycle, including repackaging, recycling, and refurbishment.
--Significance: Successful sustainability programs can reap benefits for business, consumers, and the environment. More than two-thirds of the business leaders interviewed focus on sustainability initiatives to create new revenue streams. More than half believe that their companies’ sustainability activities are already giving them an advantage over their top competitors.
Leading sustainable enterprises get 30% greater results from their branding initiatives. At the same time, they have significantly more growth than others from their initiatives to include sustainability in new, revenue-generating product and service innovations. In fact, they’re 42% more successful.
More companies are responding to the need to tackle resource use, change in weather patterns and environmental degradation issues. But the savvy ones are being more ambitious, recognizing that they face a different economic environment future, one they need to prepare for in order to thrive. And they will if they weave sustainability into the fabric of their organization.
The views expressed in this column are the author's own and do not necessarily reflect this publication's view, and this article is not edited by Hongkong Business. The author was not remunerated for this article.
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