Making the Business Case for Sustainability Guide for Practitioners

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A new, free guide for sustainability practitioners to use in helping to develop a plan to present and make the business case for sustainability initiatives, with many examples from the food industry.

Text of Making the Business Case for Sustainability Guide for Practitioners

  • MAKING THE BUSINESS CASE FOR SUSTAINABILITY A G U I D E F O R PRACTITIONERS
  • M A K I N G T H E B U S I N E S S C A S E F O R S U S TA I N A B I L I T Y A G U I D E F O R S U S TA I N A B I L I T Y L E A D E R S i INTRODUCTION AND ACKNOWLEDGEMENTS This document was created by retailers for retailers to assist in defining, communicating, and engaging senior executives in making the business case for sustainability. The targeted outcome of this guide and associated training session is to secure the support needed to broaden and accelerate sustainability initiatives in the food retail industry. Why is this guide needed? Sustainability is a strategic imperative across all sectors for business today. FMI members recognize that their industry is uniquely positioned to make a difference by providing consumers with more sustainable choices, producing food as efficiently as possible, and reducing their direct environmental and social impacts throughout the supply chain. However, because sustainability is complex, many companies have a hard time moving beyond quick wins, such as reducing energy use. In a recent FMI survey of its members (Section 3), most report good progress within their 4 walls: 90% report having made significant progress pursuing quick wins; over 50% have addressed the broader impacts of their operations (e.g., waste) and include sustainability as a consideration in store design. They are having greater difficulty gaining traction for more challenging initiatives, where the rewards have a longer timeframe. As examples, only 35% of members are reporting progress in making their supply chain more sustainable and only 6% currently educate consumers about what they can do to be more sustainable. The FMI Sustainability Executive Committee is continuously working to help move the industry forward on sustainability. We provide education and opportunities for pre-competitive collaboration to help address ever-changing sustainability challenges. Patti Olenick, Sustainability Manager, Weis Markets Former Chair, Sustainability Executive Committee In a 2010 survey by the United Nations Global Compact of 766 CEOs worldwide, 93 percent of CEOs said sustainability issues will be a critical factor to the future success of their business. never before have we seen the marketplace and todays consumers have such a deep interest in and knowledge about what companies stand for and how they are living up to their promises. Howard Schultz, CEO Starbucks Global Responsibility Report 2012 More than 50 large companies believe the risk-based business case for sustainable behavior change will be replaced by innovation and market share drivers within five years. Survey Report, Sustainable Lifestyles Frontier Group BSR/Futerra Sustainability Communications September, 2013
  • M A K I N G T H E B U S I N E S S C A S E F O R S U S TA I N A B I L I T Y A G U I D E F O R S U S TA I N A B I L I T Y L E A D E R S i i Given the disconnect between aspirations and results to date, there is an opportunity for food retailers to elevate the importance of sustainability in their companies, embed sustainability more deeply into business processes and day-to-day decisions, and find ways to make better use of limited resources. While this deeper implementation of sustainability is more challenging, it can also provide greater benefits, not just on direct financial returns but brand enhancement, employee recruitment and retention, and a more secure supply chain. There are numerous studies, resources and tools that are available for free to help businesses develop the business case for a given sustainability initiative, but they often go untapped. This guide provides sustainability leaders in food retail with a practical approach; links to key resources; and specific company examples to make the business case for sustainability, where the results are clear as well as where results may be long-term and less tangible. For these reasons, FMI has partnered with Blu Skye to capture the experience of industry leaders, as well as Blu Skyes expertise to develop this resource customized to food retail. FMI would also like to thank Kats Maroney for her hlep and expertise in the development of this guide. While the examples highlighted in this document focus on the food retail industry, many of the lessons are applicable to any sector. This guide is comprised of this summary document and additional sections that provide details on: company examples of sustainability in action (Section 1); sustainability mega-trends that can be customized to help substantiate the business case (Section 2); and, results of FMIs member survey (Section 3); In addition to company examples, contacts are listed should you be interested in more detail or have questions. Retailers have already discovered the revenue benefits and expense reductions that are possible through the implementation of recycling and other waste diversion programs. Plus, the environmental benefits are huge. Using a sustainability lens to evaluate processes and projects will help companies unlock more growth opportunities. Susan Ghertner, Director of Environmental Affairs, H-E-B Vice Chair, Sustainability Executive Committee The FMI Sustainability Executive Committee (SEC) works to identify and prioritize issues for action, develops tools and resources on sustainability for the industry, and makes recommendations to FMIs Board and the industry on policy and program development. This group oversees a number of working groups on: sustainable seafood, packaging, and food waste. True sustainability is complex because it needs to be interwoven throughout a company and its culture as well as considered in every decision. Jeanne von Zastrow, Senior Director Sustainability & Industry Relations, FMI Blu Skye is a management consultancy that works with current and aspiring sustainability leaders to transform business for the 21st century and beyond. It helps companies and industries develop and execute strategies that create measureable value for shareholders, stakeholders, and the world.
  • M A K I N G T H E B U S I N E S S C A S E F O R S U S TA I N A B I L I T Y A G U I D E F O R S U S TA I N A B I L I T Y L E A D E R S i i i CONTENTS Executive Summary.......................................................................................................................1 Step 1: Lay the Groundwork..........................................................................................................4 Step 2: Develop the Content..........................................................................................................6 Step 3: Build Support and Buy-In.................................................................................................10 ADDITONAL SECTIONS Section 1: Company Examples of Sustainability in Action ............................................................12 Section 2: Sustainability Mega-Trends..........................................................................................21 Section 3: Results of FMI Member Survey ...................................................................................26
  • M A K I N G T H E B U S I N E S S C A S E F O R S U S TA I N A B I L I T Y A G U I D E F O R S U S TA I N A B I L I T Y L E A D E R S 1 EXECUTIVE SUMMARY SCOPE AND DEFINITION OF MAKING THE BUSINESS CASE The corporate sustainability leader is focused on four main activities: 1.Identifying the emerging issues and opportunities material to the business, 2.Formulating a strategy to address these issues and opportunities, 3.Defining the business case, 4.Engaging a team to take action, and 5.Leading action and implementing change. The first two activities are covered in the previously published FMI Sustainability Starter Kit, while the last three are the focus of this guide. The first step is to define the business case for sustainability. A business case in traditional terms is well known: what is the financial impact of a given strategy or initiative? However, with the relatively new lens of sustainability applied to business, the business case is not just about increasing profit but increasing profit while conserving the planet and enhancing communities. In the U.S. alone this past year, we saved customers more than $1 billion on fresh fruits and vegetables through sustainable agriculture practices and sourcing improvements. Walmart 2012 Annual Report Making the business case for sustainability requires a company to examine its entire operation. From supply chain to customer satisfaction, it requires a dedicated team of people with a passion for change and patient persistence. Suzanne Lindsay-Walker, Director of Corporate Sustainability, The Kroger Company Chair, Sustainability Executive Committee Marks & Spencer is realizing 185 million in net benefits from Plan A over the last 5 years, which will be reinvested back into the business.
  • M A K I N G T H E B U S I N E S S C A S E F O R S U S TA I N A B I L I T Y A G U I D E F O R S U S TA I N A B I L I T Y L E A D E R S 2 Many companies are discovering the significant financial benefits of integrating efficiency measures and waste reduction strategies. However, to be a truly sustainable company, larger and more transformative approaches are needed. Many companies have integrated sustainability into major strategies that cut across the company, such as Aholds Responsible Retailing, Campbells Nourishing Our Neighbors, Our Community, Our Employees and Our Planet, and Unilevers Sustainable Living Plan. Effectively implementing this type of change is complex, wi