Align green and business strategy, or fail

Call me an idiot if you like, but I fell for one of the oldest tricks in the book this morning. A few weeks ago, a colleague forwarded what looked like an interesting invitation from Infor to watch some webinars. My response was to wonder to my colleague why Infor hadn't written to me directly since it knew me. But all this was forgotten as I finally got round to doing something about it.

Here are the opening few lines of the invite:

We invite you to learn more about Green Initiatives

Two thought provoking webinars, sponsored by CFO Europe and Infor, available to view now

CFO Europe and Infor recently sponsored two webinars addressing green issues: "Green Strategy and the CFO: At the Crossroads between Profitability and Sustainability" and "Environmental Performance Management: How CFOs Contribute to the Green Strategy".

I'd taken a briefing from one of the speakers in January and thought this was a chance to catch up. All was going swimmingly until I noticed a spelling mistake on one of the slides, the very mistake I'd pointed out in the January meeting. Then it dawned on me, the 'recent' webinar was no such thing. It was recorded last November.

Oh well. In for a penny, as they say…

If you're interested in nailing the business drivers for green initiatives and you're fairly new to the subject, you'll get some value out of watching the webinars. There's a little bit of subtle selling but, in the main, the speakers play with a straight bat. (I didn't watch the second, but I assume the quality is similar to the first.)

A key learning is that organisations which treat their green, or sustainability, strategy as somehow separate to their business strategy are probably setting themselves up to fail on both counts. The two need to be integrated for the best overall results. In fact, we're really talking about integrating corporate social responsibility (CSR) which should incorporate green strategies.

The CFO was chosen as the focus because they are the custodians of corporate information. They own the budget, they have influence in all departments, and so on. They are well placed to provide or withhold funding according to the likely impact on the balance sheet of any investments, green or otherwise.

When the audience (at the original webinar) was asked what practical impact green awareness had on their organisations, most identified 'process improvement' as the major impact. This suggests that existing processes were improved rather than 'rip and replace' major investments made. Very few – around three percent – identified 'cost cutting' as a benefit, a fact that astonished the speakers. They couldn't see how reducing energy use could fail to cut costs. One of the speakers suggested that the 'either/or' polling mechanism might have been the cause of the surprise.

When it comes to implementing an environmental strategy, the key is to link it to organisational objectives – financial returns or benefit to stakeholders, for example. Gross margin could link to energy use or market share to customer perception.

Failure is usually either the result of lack of funding or lack of communication. If the funding is tied to specific actions which result in future success then it will be, itself, sustainable. Effective communication to employees and stakeholders needs no expansion here.

The audience was asked to vote on barriers to success. Way out ahead of all others (at 63 percent) was 'other competing priorities', which simply reinforces the need for linking investments to organisational goals. One of the speakers warned about starting too many key initiatives. Twenty to thirty would be plenty. Definitely not hundreds – this is the sort of thing that results from attempting to implement every 'good idea', rather than filtering out all but the most impactful.

Legislation is coming, it's still a bit muddly, but this will change the business case because, although voluntary in the early stages, it will eventually impact the bottom line, for better or for worse. This is expected to bite within four years.

The one thing that always bothers me about these presentations is that the supply chain is largely ignored when it comes to the question of equipment replacement. One of the speakers mentioned first year write downs of certain conforming equipment purchases: a fine incentive to invest in green equipment. But no-one ever seems to address the embedded environmental footprint of the new equipment and that of disposal of the old. It seems to me that, by using the business as the boundary of environmental calculations, totally wrong decisions can be made in the context of the planet as a whole.

Or am I missing something?

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