The Sustainability Advantage

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Sustainability relates to the behavior of an organization with respect to its impacts on society and the environment. Sustainability in the context of the food industry encompasses economic viability and community/social impacts of the enterprise, along with sound use of resources including water, land, and energy to grow and process food products at rates, quality and cost that are supportable over time.

"Sustainability," as a business management tool, has evolved in reaction to the growing risks and uncertainties companies face such as scarcity of natural resources, anticipated environmental legislation, pressure from consumers, supply chain customers, advocacy groups, investors and other stakeholders. A primary challenge for leaders today is to determine what sustainability means to their business.

Results of a 2010 survey of global corporate leaders conducted by The Boston Consulting Group and MIT’s Sloan Management Review provide insights into how organizations are responding to the challenges and opportunities of sustainability. Companies surveyed range in size from the largest conglomerates to smaller, more regionally focused firms, and represent a wide spectrum of industries, from commodity manufacturing and chemical production, through health care and financial services firms, to energy and utilities. Survey results and sustainability trends are discussed here to allow processors to benefit from "food for thought."

Despite the global economic downturn and continuing uncertainty, corporate commitments to integration of sustainability-driven management are increasing, with some organizations expanding commitments more aggressively. Nearly 60 percent of companies surveyed indicated their sustainability-related investments increased in 2010; an even higher percentage anticipate their organization will step up management of sustainability and increase spending.

The growth in sustainability-related investments is explained in part that companies increasingly believe sustainability will become a source of advantage and should be integrated in all aspects of a business’s strategy and operations.

Developing a sustainability program and implementation action plan has the potential to be an advantage for your company in a number of ways.

Resource efficiency provides a solid foundation for an organization’s approach to sustainability. In some ways, sustainability involves a repackaging of traditional approaches to lean manufacturing and running an efficient organization. Resource management as an efficiency measure contributes to profitability. In the current economic environment, identifying opportunities for resource and cost efficiencies emerge as important priorities. Conservation of natural resources needed for continued production is fundamental to risk management - starting a sustainability journey by focusing on waste and energy inefficiencies makes sense for any business. The measurable return on harvesting the "low-hanging fruit" of waste reduction and energy efficiency is often used to make the initial business case for implementing sustainability strategies.

All companies recognize the benefits of strategies such as improved resource efficiency and waste management and the brand enhancing benefits of developing a reputation for being sustainably oriented. Companies are also recognizing the benefits of driving resource efficiencies outside their own four walls and into those of their suppliers.

The majority of companies responding in the survey view sustainability as eventually becoming "core" to operations; today companies differ widely in the extent to which they are incorporating sustainability into their business operations. Some companies have succeeded in making robust business cases for their sustainability investments so they are implementing sustainability-driven strategies vigorously and have put it firmly on the agenda of their organization.

The business case for monetizing sustainability is more readily made in terms of efficiency gains and limiting/managing risk. Companies most actively pursuing sustainability efforts have identified a number of intangible factors as providing significant additional payoff for sustainability-driven management, including:

• Competitive advantage,
• A source of process improvements and innovation,
• The ability to grow - deliver new customers for their goods and services as well as to increase their market share and profit margins in existing markets.

These more intangible business benefits of sustainability strategies (such as employee engagement, innovation and stakeholder appeal) are challenging to measure financially; however, some companies are now assigning value to intangible factors to help quantify return on investment.

To capitalize on sustainability’s potential, companies should:

• Make consideration of environmental issues a key focus,
• Understand and inventory the points at which their company’s activities affect society and the environment - select and prioritize the issues they can best address based on risks and opportunities for their business,
• Establish baselines and appropriate assessment metrics so progress on what matters most can be measured and reported,
• "Mainstream" sustainability by integrating it across business functions - procurement, operations, supply chain management and marketing,
• Make investment decisions, taking into account a combination of tangible benefits, intangible factors and risk scenarios.

Among the published materials addressing sustainability and providing useful guidance on the "nuts and bolts" of building sustainability programs are:

• Journey to Sustainability Excellence, The Alliance for Innovation & Operational Excellence, March 2012,
• The 21st Century Corporation: Ceres Roadmap for Sustainability, Ceres, 2010,
• Strategy and Society: The Link Between Competitive Advantage and Corporate Social Responsibility Harvard Business Review, Michael Porter and Mark Kramer, December 2006,
• From Challenge to Opportunity: The Role of Business in Tomorrow’s Society, World Business Council for Sustainable Development, February 2006,
• Global Reporting Initiative, Sustainability Reporting Framework, 2006.

To discuss how your company can further leverage sustainability, please contact:
Ms. Paula Hansen
Consultant, Antea Group USA
(925) 324-0113

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