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Green Is The New Black

Corporate Sustainability: Is It Just A Fad?

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Is corporate sustainability just a fad? Sustainability is the word on a lot of big corporations lips, but is it all PR spin or deeply intrinsic to the core of businesses?

We joined the SCMP Redefining Hong Kong Debate Series and heard from Pat Dwyer of The Purpose Business, Roger Lee or TAL Group, Michael McComb of SAP Greater China and Ellie Tang of New World Development to hear about some of these pressing issues. And to understand if the pressure to deliver profit and meeting customer expectations prevails over corporate sustainability.

As individuals, consumers, parents, and employees, it is easy to point the finger and say that companies are greenwashing, but maybe they are in fact acting responsibly. Ice in Antarctica is melting, farmers are dying from hunger, renewable energy is still not widely adopted – so then again, maybe they are not. 

It is undeniable that the world, including companies, has started to wake-up. Promising statistics are becoming commonplace, like 1 billion consumers across the globe will make 50% or more of their purchases based on sustainability as one of the top three decision triggers by 2020. But even with studies showing that purpose-driven companies are outperforming their counterparts, there is still some way to go before sustainability will become mainstream.

Extracted from the debate, here are 10 things which can make sustainability mainstream, long-lasting and not just a fad for companies today. 

1. Redefine the why and the purpose

The sustainability journey should start by redefining the “why” an organisation is doing it. Sustainability is more than a trend if it is embedded in the core of the operations and day-to-day business. The workforce of tomorrow wants to work for purpose-driven companies, meaning if you want to capture the next generation purpose needs to be in the company DNA. 

2. Start with the low hanging fruits 

The newbies in sustainability are luckier today than 20 years ago. With a sea of templates and references available at the push of a button, starting the journey is simple and costs can be saved immediately, with proven paths to ROI. Using the Sustainable Development Goals developed by the United Nations (UN SDGs) is a smart first move. Just find the goal/s you would like to focus on and read the guidelines which will help you to achieve it/them. 

3. More than just compliance, it needs to be a mindset 

Sustainability compliance such as ESG (Environmental Social and Corporate Governance) reporting or certifications should be used beyond just sharing numbers and complying with a series of dry bullet-points. It should be used by management as a template to think about what sustainability areas to focus on and how sustainability initiatives could be profitable or even help you to save costs. Change the mindset from hiring consultants and lawyers to help with ESG reporting, to actually integrating the process into your core business. Identify what the biggest risks are and focus your sustainability budget there, to begin with. 
Ellie Tang from New World Development shared the news that one of their buildings got the 1st International WELL building certification which not only focuses on the environmental impact but also on the health and well-being aspects that one building provides. This highlights how sustainability is more than just compliance, but a holistic approach embracing well-being, ethics and environmental impact. 

4. Product – product – product

Companies will never succeed in making sustainability mainstream if the sustainable products they manufacture are more expensive than traditional products and are not deemed to be as ‘cool’ or functional. Like in real estate, companies should focus on the “product, product, product.”

5. Companies have to share their sustainability initiatives

Companies have to think about the role of educating people, consumers and clients about their environmental and social impact, in an accessible and engaging way. The TAL group, for instance, is part of the Sustainable Apparel Coalition gathering some of the biggest apparel retail and manufacturing brands, such as Abercrombie & Fitch, Columbia, Esprit etc. The coalition is currently developing an index to educate consumers about what it means to be sustainable with three different levels A/B/C. Simple and easy to communicate. 

6. Management needs to endorse sustainability initiatives

CEOs and managers need to support sustainability initiatives and embed them as part of the company’s culture. Make sure that the senior leadership teams endorse and embed sustainability into your operations so there is a top-down flow. And further to that, empower your team to also endorse from the bottom-up. Companies have been reluctant to share their initiatives, thinking they had to be perfect before spreading the word. This is a huge misconception as stakeholders want to know what brands have done and what they are working on – this builds deeper affinity. For example, TAL group implemented recycling water years ago but are only now sharing about it, this is a wasted opportunity to connect with external stakeholders and also influence others in the industry to follow suit. 

7. Consumers need to be part of the change

Roger Lee, CEO of TAL group, one of the biggest textile manufacturer reminded us of some facts about its industry. Fashion is one of the most polluting industries after oil and gas, using 20% of all chemicals in the world. We could list more stats without even touching upon the ethical aspects of the issues but we will stop there. In general, consumers are not always aware of the “true cost” behind manufacturing a t-shirt. Education and awareness would automatically influence consumers’ purchasing decisions towards more eco-friendly choices.
If consumers and clients are not demanding, changes from within companies will happen slower. Businesses should be part of the solution, especially for their own B2B needs. For instance, when organising business trips, companies should favour sustainable options for hotels, restaurants, transportation means etc.  

8. Focus on long-term vs. short-term

The pressures of delivering profits and dividends to shareholders and meeting customer expectations can make it difficult to embrace the concept and costs associated with corporate sustainability. This is because the current system is based on short-term expectations. By definition, sustainability depends on investments which will have consequences in the long term.

9. Data does not lie

Measuring the environmental impact of your operations is necessary to adjust the strategies. By comparing the numbers over the long-term, it will allow you to further justify the benefits for more initiatives to reduce impact and save. Celebrate the work-in-progress and achievements. 

10. The company needs to integrate sustainability across all departments and along the value chain

Working in a silo will hinder growth and impact. The company needs to implement sustainability throughout all departments. Then looking at the value chain, there is a need to question your suppliers. TAL group decides to work with suppliers who care about the products, and not only about the margins. By having clear guidelines, you can influence your suppliers to meet your sustainability standards. 

Corporate sustainability is the future and like anything, will be survival of the fittest. Help your company today to ensure you are leading the pack and not left by the wayside, desperately trying to catch up.

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Born and raised in Nice, France, Paula has been very soon attracted by Asia studying in Hong Kong University and later on moving to Singapore to start her career as a consultant in Circular Economy. Her dream is to make sustainability more mainstream and attractive for everyone through smart design and communications.