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The Sustainability Business ImperativeDavid Beer, Managing Director, Industry RE Sustainability Two decades after the pioneering earth summit in Rio de Janeiro, world leaders will gather again in the same Brazilian city this year to try to carve out a brighter future for our world. But will anything tangible actually be decided? It seems like every year, the world has optimistically looked to these summits for radical change, but inevitably, nothing substantial comes from them, and we carry on as before, passing-by critical points of climate intervention. So what makes 2012 any different? How do we ensure that this year's hype and hopes turns into real action? The business world has embraced sustainability and is looking to politicians to provide policies, regulations and verbal endorsement. But do businesses need this? Leading companies of all sizes see sustainability as imperative and are already driving and achieving real change, innovation and commercial success.Take Unilever, for example. The sheer scale of the company's green ambitions has demonstrated to the corporate world exactly what sustainability truly means. Routed firmly in the belief that businesses must contribute to a sustainable future, it is leveraging a wider change in business philosophy that is unprecedented. By 2020, the company says it will have halved the environmental footprint of its products, helped more than 1 billion people take action to improve their health and well-being, and sourced 100 per cent of agricultural raw materials sustainably.The green business revolution is well underway, with or without bona fide backing from world leaders. In fact, the real winners will be business. It is often overlooked that sustainability can equate to " It is often overlooked that sustainability can equate to commercial growth and is intrinsically linked with the financial bottom line of any business "commercial growth and is intrinsically linked with the financial bottom line of any business. We are seeing an increasing number of companies creating sustainable value and wealth with new sustainable initiatives that add value, not only to the reputation of their products, but their share price too. Look at Unilever, the company's profits are on the up. Despite the difficult economic times, it announced some formidably strong results last year, surpassing many of its competitors. Now is the time to innovate, transform, influence and collaborate to gain early mover advantage in the new sustainable economy. Business leaders see the risks of inaction. With tangible changes taking place across policies, our climate, business models and market conditions, it is time for businesses to fully understand the transformative implications of these changes. Essentially, companies must evolve to remain competitive.Any business will tell you that our current challenges and risks transcend beyond climate change or carbon. It is about faltering financial performance and struggling shareholder value. All organisations should be assessing their short, medium and long-term risks and how these risks will directly and in-directly impact cash-flow, credit risk and revenue figures. A holistic sustainability strategy is a way of protecting your company from these risks. Sustainability creates an agile and resilient business model, which will ensure future commercial advantage.How do businesses do this? Through ambition and total transformation. Sustainability must be embedded into the DNA of your business and woven into your core business activity. Often businesses 116 sustainable business

" Sustainability must be embedded into the DNA of your business and woven into your core business activity. "focus on single issues in tandem and miss out on key sustainability risk areas. No one risk should be looked at in isolation. For example, water is essential to energy generation, water shortages could lead to black-outs, black-outs could stop a company from manufacturing, which could in turn create customer dissatisfaction and ultimately damage the company's reputation. Each sustainability issue must be assessed against all the other factors and then assessed against the business strategy, future plans and the company's commercial value-chain.A sustainability strategy must reflect the needs of the business, the markets you operate in, your consumers, your stakeholders and your core business ambitions. A glossy document is no good if the business is not fully engaged with the journey, the values and the underlying plan. One company that does this particularly well is Timberland. Last year it unveiled plans to reduce carbon emissions by 50 per cent, increase its use of green power by 30 per cent and boost the use of recycled or renewable material in its lines by 50 per cent. It also created a dialogue with stakeholders, partners and consumers, giving them an opportunity to shape the future. "We want to be proof positive in terms of the change we seek to influence through our business. Engaging employees and communities in this work is a critical part of our objectives," says Mark Newton, Vice President of CSR for Timberland. Any business sustainability approach, geared to delivering shareholder value, should include:n Regular board meetings to review both the business plan and the sustainability strategy, ensuring that the objectives of both are aligned; n A strong corporate governance policy which is regularly reviewed;n Short, medium and long-term goals;n Board members with allocated sustainability responsibilities and targets that they are ultimately responsible for;n A sustainability strategy with clear goals, objectives and measurable KPIs;n A risk register with sustainability flagged as a key risk;n Business risks which are assessed against sustainability parameters; n Sustainability champions across the organisation in each core business area;n A sustainability management system, which evaluates, day-by-day, how the business is performing;n A yearly sustainability report, which is disclosed through one of the voluntary reporting mechanisms;n An innovation programme that looks at improving existing business models, life cycle performance and products & services - this can include working with technology and innovation partners to improve performance, spot trends and look at better ways of doing business;n A quality assurance methodology (ISO, six sigma and lean) aligned with sustainability to test and create future improvements;n Staff training and development with a focus on corporate and sustainability principles so directors can monitor progress, performance and cultural change within the organisation;n Transparent stakeholder relationships;n An investment view which understands how sustainability effects financial performance;n A pension fund which reflects the company's sustainability approach. Any companies incorporating these elements into their business strategy will find they are in a robust position to face the challenges of the future and make lucrative returns. Take control of your business. Rethink your strategies. Analyse your commercial security, even if you think it's currently stable. Manoeuvre true change. Whatever is or is not delivered in Rio, if you map out all your future risks now, you will navigate a safe path through the many challenges of tomorrow. Businesses, not governments, have the power to change the direction of this world. And there is something in it for everyone. nAbout the AuthorDavid Beer is the Managing Director and co-founder of IndustryRE Sustainability - a sustainable management consultancy. He firmly be- lieves in creating profitable sustainability businesses, using innovation and transformative thinking to create commercial success.Mr Beer has over twenty years of commercial, management and sustainability experience. He holds a New Zealand Electrical Engineering qualification and he has used his technical and commercial experience within the environmental sustainability arena, with a particular emphasis on climate risk management. He has advised blue-chip businesses on how to adapt to the challenges of our changing climate. Recently, David Beer was pivotal in setting up Guardian News and Media's Sustainable Business platform (GSB) to support the global transition to a sustainable future. He has also advised International Green Awards for the past two years.   For more information visit: www.industryre.comsustainable business 117