A toolkit to help companies make millions from sustainability
Three years ago Marks & Spencer made a bold commitment to sustainability with the launch of Plan A. They thought it would cost them £200 million but it's already adding millions to their profits. We want to help other companies find how social and environmental responsibility can pay.
M&S launched Plan A in 2007, making 100 commitments to tackle key challenges on climate change, waste, sustainable raw materials, "fair partnership" and health over five years. They expected to invest £200 million to achieve these goals but Plan A broke even early and added £50 million to the bottom line in 2009/10, according to their latest "How We Do Business" report.
M&S isn't the only leading company to have found a business case for sustainability. General Electric has spent $5 billion on R&D in the first five years of ecomagination but the program to develop the clean technologies of the future has already generated revenues of $70 billion.
With such shining examples you might think companies would be falling over themselves to find new opportunities in social and environmental responsibility. But the reality is that many struggle. That's why we're launching a new toolkit to help companies find the business case for sustainability.
Our experience at Forum for the Future is that the complexity and uncertainty of sustainability creates major barriers to making a business case. First, the numbers are much "softer" than senior decision-makers are used to. Companies are often breaking new ground, which is difficult to model quantitatively, and are also anticipating future trends.
Second, companies get stuck in a vicious cycle: finance directors want to see a business case before giving permission to go ahead with a sustainability project, but often the information to build that business case can only be generated from the experience of going ahead.
Finally, many financial tools designed to deal with certainties are ill-equipped to deal with the complexities of how business succeeds in the face of sustainability challenges like climate change, peak oil and population growth.
So, we have developed a set of tools to help companies get over those barriers and make better decisions which generate real value. We've given it a cunning name – the Better Decisions, Real Value toolkit. It's designed to be used by sustainability practitioners and finance professionals in any organization to determine how sustainability can add value to their business.
The Foundations guide sets out the general business case for sustainability, equipping you with the arguments you need to start your case.
Entry points is a step-by-step guide to winning permission to go ahead with a sustainability-related initiative, so that you have the clarity of purpose you need, an understanding of the organizational context, a plan for a possible project, and a strategy to influence internal stakeholders.
The Pathways tool summarizes the different ways sustainability can create financial value, and gives guidance on how to collect evidence to make your business case.
The Ready Reckoner helps you assess which of these pathways to value are most important for your project and calculate good enough numbers to get the permission to start.
We developed the tools working with a number of Forum for the Future's closest corporate partners on their business case. I've discussed some of our thinking in previous posts about lessons on finding a business case, tips for getting buy-in from finance, and seven steps that could save you millions.
We're really keen for people to use the BDRV toolkit. We want to hear about your successes but we also want your feedback on how to improve the tools and what else you need. So, please download them here and then send your feedback to email@example.com.
This blog post originally appeared here at GreenBiz.com on 13th August 2010