Driving performance through sustainability
The IBM Institute for Business Value interviewed executives about sustainability strategies their businesses are pursuing and the benefits they're gaining.
No matter what your business, sustainability is your business
The Chinese shipping company COSCO (US) looked at its carbon footprint and saw not an obstacle, but an opportunity. It reduced the number of its distribution points from 100 to 40, lowering costs by 23 percent and reducing carbon dioxide emissions by 15 percent, which equates to 100,000 tons per year.
In 2000, IBM looked at our own water usage at plants (US) and labs and set a goal for savings. Eight years later, water initiatives in our microelectronics manufacturing operations achieved a 2.4 percent savings rate, translating to a savings of 1,214 thousand cubic meters (TCM) of water.
From government agencies to retailers to financial institutions, organizations worldwide are assessing the current and future impact of their activities. And that includes their impact on the planet. For example, by 2025, buildings will use more energy (US) than any other category of "consumer." (Already today, in the United States, they represent 72% of energy use.) And 40% of the world's current output of raw materials goes into buildings. That's about 3 billion tons… annually.
Given increasingly finite resources, businesses depend on balanced natural ecosystems for raw materials, water, energy and the physical health of their employees and customers. They depend on thriving community systems for labor, new sources of innovation and customers. And given the links among its systems, an enterprise committed to practicing sustainability considers both the immediate and far-reaching consequences of any action it takes. However, there are some challenges associated with developing a sustainable business approach. Following are three such challenges.
In the 2009 Corporate Social Responsibility (CSR) Report (US), IBM found that four in ten of the business leaders surveyed reported that over the last three years they have increased the amount of information they collect about their operations in each of eight sustainability areas we tracked: energy management, carbon management, waste management, water management, sustainable procurement, product composition, ethical labor standards and product lifecycle.
Three out of ten organizations surveyed aren’t asking their suppliers for any information in any of the eight categories. Surprisingly, in the carbon and water categories, where cross-ecosystem “footprinting” is becoming more common, approximately eight out of ten aren’t collecting information from their suppliers. And, despite a long history of brand-damaging scandals in the area of labor, six out of ten aren’t collecting information on ethical labor from their suppliers.
Outperforming organizations, on the other hand, are collecting more information from their suppliers in each of the eight categories we tracked as compared to their peers.
Most organizations understand expectations for transparency with regard to CSR initiatives. Over one-half of the business leaders we surveyed consider the open sharing of information a high priority. However, until recently, organizations have tended to share information reactively – in response to stakeholder demands. Those that expect to gain business advantage from CSR are developing new ways to inform and educate their stakeholders, whether they are customers, employees or partners.
Sustainable practices begin at home
IBM believes that sustainability is more than a worthy goal, and has proven that energy efficiency, conservation and other environmentally protective practices make good business sense.
In its annual Green Rankings of big companies' sustainability measures, Newsweek magazine rated IBM first of 500 in the United States and second worldwide. Criteria included environmental footprints, management (policies, programs, initiatives, controversies) and transparency (reporting practices).
As Newsweek notes, IBM has been “measuring, managing and voluntarily reporting on its environmental impact for more than 20 years," conserving 5.4 million kilowatt-hours of electricity, cutting CO2 emissions and saving more than US$400 million in the process.