Sustainability: the double bottom line

I don’t think we can make the statement too often: “sustainability is not a cost centre”; “sustainability is not a cost centre”, sustainability is not a cost centre”.  We must also state with even more gusto that “sustainability must not become a cost centre”.  We must go further and remind those in charge that “sustainability is a profit centre”.  To many people reading this, these might seem obvious statements (and I for one was of that view); but over the last 6 months, talking to numerous companies I have realised that relatively few companies think in this way.

If you believed the opening statements, why wouldn’t you follow a path that will simultaneously save you money and make your money driving the bottom line on the double? Why wouldn’t you follow a path that will also make you and your employees feel positive about what they are doing and increase employee retention and drive productivity? 

Unilever announced recently that its “sustainable brands” are driving half their growth and growing twice as quick as other brands.  At the same time their internal ‘sustainability’ efforts are saving €100’s of millions in operational costs as they reduce waste, save water and energy. 

Chipotle, who constantly reinvent what sustainability means to them are seeing double digit growth. Executives emphasized that the brand’s insistence on simple ingredients and food produced with stronger environmental and animal-welfare practices will continue to drive its growth in the long term by drawing an increasing number of consumers in their 20s and 30s[1].  McDonalds are now also picking up the pace at which they introduce sustainability initiatives, with their recent commitments to source verifiably sustainable beef from 2016.  

More and more companies are taking better care of their employees, which we now recognise as social sustainability, not just because it is the right to thing to do, but because it is the right thing to do for the company.  The war on talent has never been as fierce and we now see better maternity and paternity leave in leading global companies. As recently as this month Richard Branson’s Virgin announced up to 1 years paid paternity leave. While there are caveats it is a sign of what far sighted companies recognise – it is much more productive to retain employees than to hire and train employees while at the same time you enhance the life of your employees.  Both Netflix and Virgin have very flexible vacation policies and Netflix are experiencing a whole suite of company benefits[2]

So why are so few companies pursuing a route to sustainability.  Is it because sustainability is a dirty word?  Is it because they see sustainability as not core to their business?  Is it because they see sustainability as a cost centre?  Companies don’t have to hire a chief sustainability officer (CSO) to have a sustainability agenda. In fact in most small to medium sized companies the CSO should be the CEO (or at least a senior director).  This does not mean that the CEO can’t and shouldn’t be supported by able members of their team in driving this agenda forward.  Of course in larger companies there is every reason why in addition to the CEO acting the part of CSO there should also be a CSO championing the cause of sustainability least those who may feel pressured by the ‘day job’ forget that sustainability is part of the day job. 

So, to reiterate my point at the top: “the CSO is not a cost centre”, “the CSO is a profit centre”.  So be the CSO or hire a CSO but bring that profit into the business now, and ensure the resilience of your business!!

[1] https://www.wsj.com/articles/chipotles-sales-growth-slows-1429646887

[2] https://www.virgin.com/richard-branson/why-were-letting-virgin-staff-take-as-much-holiday-as-they-want