When sustainability adds to the bottom line

Sustainability is shaping up as the key issue for all businesses, including resellers. With fuel and electricity prices rising, and with the Federal Government poised to introduce a carbon trading scheme, good sustainability policies will be a competitive advantage.

Sustainability will also become more important for attracting customers. This becomes even more important in the wake of Wall Street malfeasance. More people are now turning to companies that show commitment to people and the planet. Surveys also show that many consumers are willing to pay more for green products or items that are produced sustainably. Sustainability has a premium.

Resellers need to do more than overhaul their practices. They need to find ways to connect with customers and create two- way conversations. This will ensure customers feel they are contributing something that will make our world a better place.

There are several ways to do this. One is to create a forum on the company web site where customers can provide ideas and feedback on sustainability. Another is to offer them a way to work together on causes. Providing customers with sustainability options such as showing them different ways to recycle their computer products or paper is one way. Some companies go so far as to invite customers to participate with them in events. Clothing company Patagonia gets feedback from customers on what events and environmental groups it should sponsor.

Dialogue with customers is important because that establishes the reseller in the customer’s mind as a sustainable company.

It is just as important for the company to overhaul its own practices with steps to mitigate and adapt to climate change. This leaves the company better prepared for regulatory changes. Resellers will also be able to save money through efficiency and will be ahead of competitors that are slow to react to the changes.

Also, they will attract new customers and achieve more solid customer loyalty.

By way of contrast, climate change laggards face reduced revenue and potential business failure because of higher costs and loss of competitive advantage.

The first step the business owner needs to do is get senior management commitment.

The business would need to do an audit analysing energy and water usage, transportation as well as waste and garbage. It will also need to look at whether it uses recycling services. It then needs to establish a baseline for the amount of water, energy and supplies the business uses and how much waste it generates. The baseline then becomes the comparison rate for benchmarking against industry best practice and also for monitoring future progress.

It is important to remember that you can only manage what you can measure. This means the company has to regularly monitor and measure progress against designated targets to help assess the effectiveness of sustainability programs and identify areas that need improvement. A regular audit will also identify discrepancies and unusual spikes that might require immediate attention.

Climate change needs to be considered in terms of business risk management. This is particularly important for any business that relies heavily on energy and water. Any increase in costs could have a significant impact on the bottom line.

Consultants therefore advise manufacturers to identify areas of their business that are at risk. Every company will need to evaluate risks based on its specific individual situation. But in general terms, the key risks are raw material costs, energy, supply, transportation, water costs and availability, interrupted supply flows, increased insurance premiums, structural damage from storms and floods, carbon emission liabilities, non- compliance fines, loss of tenders, liability for non-compliance with client sustainability requirements and loss of customers.

It is also important to have staff engagement. No sustainability program can get off the ground without co-operation and involvement of all staff members, the human face of the company. They need to be turned into the organisation’s ambassadors. That applies to all of them, not just sales and customer service.

This is important because a company’s employees are at the coalface and better placed to connect with customers.