By Mike Gerbis
Small and medium-sized businesses need to start looking at how to address the wide range of drivers that are pressuring them to become more sustainable, and how to use their responses to create competitive advantage in their markets.
- Consumers are requesting more environmentally and socially responsible products. They want products that are ethically-produced, less toxic to the environment and give off fewer emissions.
- Supply chain requirements from companies such as Walmart, Canadian Tire and even resource companies, who are looking down their supply chain and instituting principles of sustainability.
- Increasing commodity and energy costs.
- Stakeholders, including employees, board members, shareholders, ethical and mainstream investors, are beginning to ask about corporate sustainability activities.
- Industry and government regulations.
Sustainability is a new lens through which you look at each of these elements in your business. Through this lens, it’s possible to see the benefits to adopting sustainable practices, and conversely, the risks associated with failing to respond to the sustainability drivers.
Often you find successful companies are enhancing their brand and profile by engaging in sustainable activities and promoting them to consumers. They are demonstrating that their values align with consumers’ values and concerns.
By being sustainable a business is differentiating its products; for example, organic food suppliers are differentiated from standard food suppliers. In Ottawa, Bridgehead coffee has exploded because they are offering shade-grown coffee from small-scale farmers and they are locally owned: They are differentiated from ‘everyday’ coffee shops by their sustainable practices.
A number of small and medium-sized businesses that have embraced sustainability are seeing that they are finding new products and new value-added business. Again, this is about differentiating yourself in the marketplace. One of our clients provides a collision repair service. They approached the insurance companies, identified the insurance companies’ concerns with climate change, and so have offered their services as the sustainable provider of repairs in the marketplace. They are now gaining and offering innovative services and products with the support of the insurance industry.
Businesses that are not moving towards sustainability will likely lose access to some of the most sizeable companies, such as Walmart or Canadian Tire, who are, themselves, moving towards emphasizing sustainability in their product lines. Those who become more sustainable will gain the competitive advantage of having gained access to those supply chains.
Businesses that adopt sustainable practices usually experience cost savings, as they are reducing their energy, waste and water costs, as well as improving their margin and efficiency.
A TEC member company reduced its transportation costs by 7 percent by delivering to its customers at night. People ask, “How is this sustainable?” It is sustainable because they have one less truck, they get much better gas mileage since they are not stuck in traffic and they are more efficient, reducing costs to their customers.
From the employee perspective, the attraction of human capital is that you are seeing this groundswell from the early 30s and twenty year olds entering into the marketplace and putting pressure on companies to do something. What is very interesting is that during interviews, they are asking the interviewer, “What are you doing to be sustainable or be responsible?” and as a result, we are seeing significant pushes in the marketplace. So then, when you have a happy workforce and you implement things like this, it not only improves your attraction and retention but people are prouder to be working there and in turn, improve their performances because they want to work there. Your values align with their values
Industry and Government Regulations
While there is currently little legislation mandating sustainability, many industries have voluntary sustainability guidelines, and membership to some industry organizations may even mandate sustainability minimum requirements. Improving sustainability practices now may save significant compliance costs in the future.
In addition to all the business sense that sustainability makes, it also makes sense in terms of enhanced environmental and social benefits. Adopting sustainable practices in your business now will help it grow market share, build value, improve profitability and become an enduring presence in your market.
For two decades, Michael Gerbis has actively created positive change professionally and personally. As CEO of the Delphi Group, he leads a team of professionals that have worked with 150+ organizations over the past two years including 27 of Canada’s top 100 firms. Delphi develops and effectively deploys environmental responsibility business strategies that are financially viable and enhance long term performance. Michael’s leadership and strategic advice of Delphi and its team shapes the effort that significantly lowers the environmental impact of Canadian business. Michael was recently named to the 2013 Clean50 for his outstanding contribution to clean capitalism and sustainable development in Canada, and he is a former recipient of the 40 under 40 awards. “We are a group of people who are passionate in what we do, contribute to economic prosperity and give back.” Find our more about Michael at delphi.ca >