Sustainability – what does it mean for your business?

The impact of climate change has moved sustainability high up the boardroom agenda in recent years and with growing stakeholder interest in this issue, it is essential for businesses to get their strategy and position right.

Although sustainability and corporate social responsibility programmes have been around for some time, new regulation and environmental targets have acted to increase the momentum for change.  This has been further catalysed by major multi-national brands committing to reduce their carbon footprint and overall environmental impact.  Sustainability is now a strategic and operational issue for every business and, left unaddressed or poorly managed, has serious repercussions including reputation.

If the region is to meet its targets for sustainability, particularly in relation to carbon emissions, a paradigm shift is required in how it does business.  Achieving this will take time and involve decisive action to change behaviours, improve regulation and create new industry standards as well as provide fiscal instruments, grant support, innovation and technology.  Each organisation’s circumstances are unique and so there will be no single answer to the issue.

On a practical level, every company needs to consider potential regulatory changes.  New regulations regarding sustainability are often not aimed purely at manufacturers but will impact on many types of business.  For example, a new EU regulation will reduce the levels of certain emissions from vehicles between 2009 and 2016, and emission limits for carbon dioxide from engines, which are currently under debate, may well come into force in 2012 and 2015.  These will affect the company car fleet, transport and logistics of every firm.

Another key regulation is Registration, Evaluation and Authorisation of Chemicals (REACH) which came into force in June 2007.  Many companies mistakenly believe that REACH applies only to chemical products and importers but in reality this is far from the case.  While the new regulation is particularly relevant to these sectors, other organisations operating in industrial manufacturing, automotive and even consumer goods/retail may have obligations to fulfil or commercial risks to mitigate.  If companies have not yet assessed what REACH means for their business they need to do so now and ensure they adapt their operations accordingly. 

Yet while sustainability is an essential requirement, it also provides development opportunities for businesses with an active programme in place and who are able to find innovative solutions to growing stakeholder demands on this issue.  By imposing new standards, regulation can drive the development of new services, products, materials and technology.  For example, a chemicals manufacturer recently saw the opportunity presented by a new US regulation regarding sulphur in fuels and responded positively to this change by investing in new fuel additives that would enable customers to meet the requirements.

So as both a business pre-requisite and an opportunity, the issue of sustainability is here to stay and managing this effectively will be integral to future success.  The business community must adapt the way it works, and most importantly embrace sustainability, to reduce its impact on the environment, sustain economic development and make a positive contribution through innovating business operations, products and services.

Contact details
Email: Richard Porter
Tel: +44 (0) 121 265 5398