WHAT IS SUSTAINABILITY AND WHY IS IT IMPORTANT FOR YOU
What is Sustainability? Sustainability is defined as the method of using a resource without depleting or permanently damaging the resource [1]. Is there a need for sustainability? Major retailers and suppliers like Wal-mart, Kohl’s, Limited Brands, Levis and Nike have all incorporated sustainability into their daily operations. These companies have experienced a reduction in expenses and an improvement in their environmental impact.
If your company does not have a Sustainability program, you should consider developing one. Sustainability is going to be a key differentiator for retailers and manufacturers. There are three key steps you should take prior to starting your program. First, it is important to get your executive team to support the process. Second, assign a senior level executive to lead the process. This is important for continuous support. Third, you should develop a detailed implementation plan that focuses on (1) reduction in energy usage, (2) increase material efficiencies, and, (3) corporate social responsibility (CSR). These three components of Sustainability are supported by programs and companies who other retailers and suppliers have partnered with to ensure they remain ahead their competition and in the fore-front of Sustainability.
The organizations that support these three components are highlighted in the following sections.
1. Energy Usage
ENERGY STAR and Green Power Partnership are two Environmental Protection Agency (EPA) programs that companies are participating in to help reduce their energy usage. According to the EPA, retail companies spend nearly $20 billion on energy each year. If a retailer reduces their in energy costs by 10 percent a retailer can boost net profit margins by as much as 1.55 percent and sales per square foot by $25 [2]. ENERGY STAR has developed a program that helps to achieve this goal along with a framework that guides companies through the implementation process. The Green Power Partnership program was developed to support an organization’s procurement of green power by providing expert advice, technical support, tools and resources [3]. This is a great way to get a better understanding of what other retailers and suppliers are doing in order to become more energy efficient.
2. Material Efficiencies
Material efficiencies start with understanding and communicating the retailer’s expectations to its suppliers. Wal-mart and other retailers have developed scorecards and surveys to assess their suppliers Carbon Footprint and Green House Gas emissions (GHG). Both retailers and suppliers have developed partnerships with the EPA WasteWise program which focuses on decreasing municipal solid waste and select industrial wastes. Municipal solid waste includes materials that could end up in an organization's trash, such as corrugated boxes, office paper, packaging and wood pallets [4]. Limited Brands partnered with the WasteWise program and has made a conscious effort to reduce the company’s municipal waste. “In 2004, Limited Brands established new design standards for cardboard boxes used for apparel merchandise, allowing multiple uses from a single box. This effort prevented 87 tons of cardboard from being discarded as waste and saved the company approximately $215,000 in avoided purchasing costs. In another effort, Limited Brands changed the material used in product return kits from stores and prevented the need for 20,000 pounds of virgin material.” [4] The EPA has also developed a SmartWay (sm) Transport program. The SmartWay Transport program “is an innovative collaboration between EPA and the freight sector designed to improve energy efficiency, reduce greenhouse gas and air pollutant emissions, and improve energy security. Companies that participate in SmartWay Transport programs save money, reduce fuel consumption and are recognized for their social responsibility and leadership.” [5]
3. Corporate Social Responsibility
Getting customer approval and obeying government regulations are important in today’s environment. Partnerships like the Business for Social Responsibility (BSR) program allow retailers and suppliers to benefit from the insights, expertise, and relationships the BSR has built through years of experience. BSR partners have access to a network of company leaders focused on creating sustainability solutions [6]. In addition, The National Retail Federation (NRF) has also formed the Sustainability Retail Consortium (SRC) which is a network of retailers, manufacturers, suppliers, and organizations dedicated to the evolution of green retailing, “Greentailing”. [7]
Sustainability begins at the company level by getting a commitment from the executive team and assigning an executive leader to support the sustainability efforts. To continue the commitment it is important to develop partnerships to help maintain and measure the achievements. Today, sustainability is a “nice to have” but as customers become more educated in this subject and regulators add laws to improve the environment, sustainability will eventually become a business requirement.
The approach outlined in this article is provided to assist you in developing a Sustainability program for your company. The resources listed here can also provide you with key information for your program.
Sources:
[1] Merriam Webster dictionary online http://www.merriam-webster.com
[2] EPA ENERGY STAR http://www.energystar.gov
[3] Green Power Partnership http://www.epa.gov/grnpower
[4] EPA WasteWise http://www.epa.gov/waste/partnerships/wastewise/index.htm
[5] SmartWaySM Transport http://www.epa.gov/smartway/transport
[6] Business for Social Responsibility http://www.bsr.org
[7] National Retail Federation - Sustainable Retailing Consortium http://www.nrf.com/sustainability
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