The ROI of Sustainability
The question of the ROI of sustainability is often talked about but not examined nearly as closely as it should be. Yesterday I was at a lunch seminar put on by Corporate Responsibility Officer (CRO) Magazine, Responsible & Sustainable Communications in the Age of Brand Risks. CRO Publisher Jay Whitehead moderated a very informative discussion between Mark Comolli of the Rainforest Alliance and Guy Boucher VP Sustainability at Domtar Paper. The discussion centered around Domtar’s efforts to effectively position their brand as a market leader in the development of sustainable paper sourcing through chain of custody certifications, primarily FSC Certification and Rainforest Alliance certification. In particular it focused on the collaboration between two organization that at first to have divergent interests
A lively discussion took place when the question of ROI was brought up during the question and answer period, and it is clear that ROI is on every-one’s mind. As company’s weigh the costs and associated benefits from the implementation of an effective sustainability strategy, I sense there is still feeling among many that sustainability is high cost low reward scenario. That may be changing, and it should be changing. The challenge is in demonstrating that there are direct ROI benefits from an effectively implemented sustainability strategy.
Interestingly, yesterday morning I received via my RSS feed the following report from the Aberdeen Group, The ROI of Sustainability: Making the Business Case. I highly recommend that you read it. Their research based on interviews with of 200 enterprises came up will the following conclusions.
Using six key performance indicators to distinguish Best-In-Class companies they found that those BIC companies achieved a 6% to 10% reduction in costs while making strides in in retaining customers.
Best-in Class-Performance
- 9% reduction in carbon footprint
- 6% reduction in energy costs
- 7% reduction in facilities costs
- 7% reduction in transportation/logistics costs
- 16% increase in customer retention
The survey showed that the companies identified as Best-In-Class shared the following characteristics:
Competitive Maturity Assessment
- The Best in Class are 52% more likely to incorporate sustainability metrics into value chain performance management
- 74& of the Best-In-Class have an organization wide sustainability policy compared to 58% of all others
The report also highlighted the need d to track, measure and communicate sustainability progress, successes, challenges and areas of opportunity.
-FR
Carbon Footprint, Corporate Social Responsibility, Supply Chain, Sustainability, Uncategorized
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