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'Sustainability Nears a Tipping Point'

A recent study from MIT Sloan Management Review and The Boston Consulting Group, ‘Sustainability Nears a Tipping Point’, found that two-thirds of companies see sustainability as a competitive necessity in today’s marketplace and 31 percent of companies say sustainability is boosting their profits.

Several types of business management system have been introduced since the 1970’s. Some were in response to emerging regulatory compliance requirements (e.g. staff welfare, occupational safety, hazardous substances and pollution control), while others were driven by opportunities to improve productivity, profitability and market advantage (e.g. quality, process efficiency and risk mitigation). More recent themes include GHG emissions, business ethics and supply chain performance. Despite their variety, they all use a similar step-wise approach, namely:

Make a commitment to improve
Check what you should be doing
Check what you are doing
Identify things you could do better (to comply, reduce risk or improve performance)
Develop an improvement plan (with priorities, responsibilities and KPIs)
Implement your plan and monitor your performance
Independent validation of management system implementation
Routinely review the effectiveness of your improvement programme

MOST SMALL AND MEDIUM-SIZED ENTERPRISES (SMEs) HAVE LIMITED IMPACTS, risks or opportunities, so tend to use single-theme management systems. As larger companies have a greater diversity of impacts, risks and opportunities, they may find it more cost-effective to use an integrated system e.g. covering environment, safety and quality. The growing scrutiny of larger companies has led to management systems that are ever more holistic, culminating in today’s variety of standards, systems and schemes for corporate responsibility and sustainability.

SUSTAINABLE BUSINESS MANAGEMENT REQUIRES CONSIDERATION OF ENVIRONMENTAL, economic and social aspects, but also demands a step change in management system thinking. The system boundary is no longer the perimeter fence, but wherever your activities, facilities, products or services present an impact, risk or opportunity, across your product life-cycle and across your entire supply chain. If that wasn’t hard enough, your stakeholders are not simply your customers, investors and board, but also your employees, regulators and the community. So given all this complexity, how relevant is sustainability to SMEs in New Zealand?

MANY SMEs ARE LIKELY TO GET MOST BENEFIT BY FOCUSING ON PARTS OF THE SUSTAINABILITY AGENDA; those that present the greatest risk or opportunity (typically by meeting compliance requirements, improving process efficiency, reducing waste and broadening stakeholder engagement). A few are even able to identify opportunities for innovation or differentiation.

THOSE MAKING SUSTAINABILTY CLAIMS ARE FACING GROWING SCRUTINY. It is therefore important that claims are based upon recognised standards, and that system implementation is independently verified by a competent auditor. Standards and certification schemes will be explored in the next issue.

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Telarc is New Zealand's largest certifier of quality, environmental, and OHS management systems. We provide businesses with assessment tools and certification schemes for performance improvement and market differentiation.