Arguing the case for ‘sustainability’ in business

Sustainability is a great business topic for discussion. It’s a notoriously slippery and difficult term to define, as the idea means different things to different people. It’s also a concept that has been much refined since it appeared on Business Studies specifications about 10 years ago. When firms talk about environmental sustainability today, they tend to be more focused than just pursuing a vague notion of being ‘environmentally friendly’. Business activity is rarely friendly to the environment. Instead, businesses now talk more about ‘reducing resource use’, from energy to packaging, and water to widgets.This has really pushed the sustainability concept into the mainstream. Now being ‘Green’ doesn’t have to be purely seen as an ethical or marketing position. Firms increasingly sell it to their shareholders as a way of cutting costs, and therefore boosting profit margins. Justin King, the boss of Sainsbury's, is determined to make the company Britain's most sustainable grocer. This could be a good start point into finding where the debate stands today.

This subject can be looked at from a variety of stakeholder viewpoints. In the case of Sainsbury’s, (who launched their sustainability plan in October 2011) investors are nervous that Sainsbury's is taking a risk by sticking its neck out on renewable energy and a Fairtrade scheme. King’s response is to argue that the move makes commercial as well as ethical sense. This next quote is terrific, and could go into your revision file. He says: "People are increasingly looking to businesses that give them value and values. We never believed that the credit crunch would lead to a values crunch – and we've been right”.

He goes on; "The idea that people who've got less, care less, is out of touch with how people really feel and behave, and totally misjudges the British public. Our research shows similar attitudes across socio-economic groups”. King is convinced he already has a proud record of cutting carbon emissions at a time when store space has increased by 25%. Sainsbury's has invested in new one-stop recycling facilities at its stores in recent months, established plans for geothermal heat pump technology at 100 outlets and installed 70,000 solar panels at 169 of its retail units. It has stopped sending food waste to landfill, using it to generate energy instead. King is also determined to fight claims that supermarkets are responsible for rundown high streets.

You may still view ‘green’ issues as mainly a marketing ploy, but Sainsbury’s are keen to highlight the cost-cutting, waste minimising philosophy behind sustainability. King attacks those who say we should eat more local food, for instance. He said that critics forget that if we all only ate food grown within 10 miles of where we lived we would not be eating a very varied or indeed healthy and safe diet. He added: "The way our supply chains work is they are incredibly efficient in their consumption of resource in terms of ultimately connecting the end consumer with the production. We want to run our vehicles over as short a distance as possible because fuel, vehicles and driver time are incredibly expensive. So there is no disconnect between the economic imperative to run them efficiently and the society imperative of something which is sustainable in carbon and energy terms. All the prejudices don't bear up to scrutiny. The reality is the supply chains we operate, particularly in the UK, are the
most efficient on the planet."

That seems a good summary of where the debate lies at the moment. Sustainability, in this view, is good for business in the ‘old fashioned’, hard-headed way. Read the articles highlighted if you want to dig deeper. The Guardian also has a good page if you want to start some research. Sainsbury’s are by no means the only major name to make a big sustainability push in recent years – Unilever were perhaps one of the earliest multinational companies to go in this direction. Others are looking carefully at their environmental costs, and conducting ‘Green audits’. I’m beginning to suspect more will follow, and I’m starting to shed my dislike and mistrust of firms who choose to emphasise their ‘green’ credentials.