Archive for the ‘Business’ Category

A week ago the Conversation Society hosted its third debate which looked at Sustainability: Is business doing enough? Is it OK to profit from sustainability?

Our final panelist was Matt Bell, Group Head of External Affairs at Berkeley Group Holdings, London’s biggest homebuilder and a very successful and well-run FTSE 250. 

Matt had an interesting perspective when it came to the importance of our built environment, which he broke down into three main areas. Firstly, looking at how change happens; secondly dealing with the dilemmas of consumer behaviour; and thirdly he touched on the role of technology, suggesting it might just be over-rated.

The Berkeley Group builds homes and neighbourhoods. Like most residential developers, its work on sustainability has been dominated for seven or eight years by The Code for Sustainable Homes.  The ‘Zero Carbon Home’ concept came alive in the UK in 2007 when Yvette Cooper, then Housing Minister, decided this would be the way forward for the next generation of house-building in Britain. It has taken four years since then to define what zero carbon actually means and the regulation required to enforce it. However, the introduction of the Code was a great example of conviction politics. Many people in the industry have moaned a great deal about the additional cost and complexity it creates. But we are getting better products with a better impact on society because of it.

The second issue is dealing with consumers and their split personalities. The Berkeley Group prides itself on being a sustainable house builder, focusing on a “fabric first approach”. Its focus is on build quality, making the structure robust, and ensuring there is great insulation and minimal heat loss through the floors, the windows and the roof.

With this approach, you don’t, for instance, necessarily need a radiator in your house. But ironically consumers often remain unconvinced and insist on having them installed regardless! Matt’s thoughts on this particular issue: “A lot of consumers are quite traditional. Old habits die-hard. They may say one thing but do another, and behaviour doesn’t always follow attitudes.”

Matt addressed his last thoughts to technology. He suggested that there is little evidence of smart meters or kits driving mass changes to consumer behaviour (sadly). “We find ourselves now in a situation where many of the things which will fundamentally change the way we behave relate to the built environment.  So Berkeley’s ambition is to focus on creating sustainable places and perhaps worry less about the product and the technology, but slowly reshape the relationships between the different spaces in which people live their lives. I know that for me what would most change my carbon footprint would be living in a sustainable place, a neighbourhood that equally prioritises the environmental bit, the social bit and the employment aspects of my life. If we could get the relationship between those better captured in the design of the places where we live, then I think we’d be able to make some real progress.”

A week ago the Conversation Society hosted its third debate which looked at Sustainability: Is business doing enough? Is it OK to profit from sustainability?

Next to talk from our panel was Donna Young, who is the CSR Programme Director at BT

Donna starts off by looking purely at the environmental aspects of the organisation. Their first environment team was set up about 1990’s and first targets were set in 1992.  Towards the end of the 1990s there were some enlightened souls that worked in BT who really pushed for the agenda and said, “Actually, we need to have ISO 140001 and we need to manage all of our aspects, not because we have a legal requirement but because actually this is really important for the organisation”.

The next strategic intent looked at a bigger picture and Donna’s role was to look at how Climate Change could be embedded into the business as well as creating a business case for it and how it could be driven.

It’s taken  four to five years, but the company now has six strategic intents for being responsible and sustainable business.  One of the things it aims to do is to look at those aspects under those areas and how best to innovate them, create change, lead and support the value chain, from their suppliers through to their customers.

Donna continued to leave us with some food for thought, “if you think about it, at the moment about 80% of the jobs are online.  If you don’t have a job at the moment and you’re not online and don’t have access, how do you get out of that spiral of never having a job?  Most jobs today, any job that you go to, in any industry, most jobs will have some form of an ICT requirement in them, even if it’s working in a retail outlet.  You think, “Oh, working in a shop, I don’t need it”.  Yes, you do.  So how do you actually up-skill these people?”

BT is now looking at sustainability to give every UK citizen the same opportunities and help them out by rolling out a massive programme called “Get IT Together”.  It their digital inclusion programme to decrease the number of people who exclude the digital space and the reasons why people overlook it is because they may not be interested (as it’s usually an age thing with the vast majority of people being over 55.)

Donna continues to talk about the overall carbon footprint of the products that those products and services are producing:  “Looking at the “2% Club”, the airlines are in the 2% club, that they get lambasted by everybody because they’re an easy sitting target.  Telecoms is 2% too of the world problem and it’s set to grow to 4%.  The Jesse report states that ICT can help the carbon footprint by a factor of 5, which means, although it’s going to grow, actually it can reduce other areas to actually help with that overall climate change issue and reduction that the global world is actually seeing at this moment.  Especially when one starts to see the emerging economies like India.  They’re coming up, they’re going to grow bigger.  They want the same lifestyles as us and Why not?  How can we say to India.”

BT as an organisations as an industry have to look at how they can create those level playing fields and help these industries and countries grow, in a way that doesn’t add that extra burden that Jo talked about in terms of 50% more food production, 25% more water, etc, and water being the next — in fact, it is the more scarce commodity going.

Donna took the opportunity to talk about ‘BT MyDonate,’as it comes as logic to everyone that when there is an economic downturn charities tend to suffer the most as people give less.  What BT knows is that when people do give online, they tend to give 50% more than if they were giving on a piece of paper and handing it around.

Donna talks about how the charity is run “we don’t charge them anything. We don’t charge a commission for setting up, we don’t charge them an admin fee, we don’t take any percentage commission of the donation, so everything goes to charities, and it goes to any charity that actually signs up.  It’s their way, again, of giving back to the community, back to society.”

Donna concludes the discussion by saying “Looking at this sort of triple bottom line of sustainability is to try and look at them all hand in glove and say, “How does our technology help resolve the issue?  How does our products and services contribute to making a better world and a better future for people?” The main reason that we get involved in sustainability is because it is good for our business, it’s good for society.  This is actually a win-win situation and that’s really what we’re trying to create.  That’s it.”

A week ago the Conversation Society hosted its third debate which looked at Sustainability: Is business doing enough? Is it OK to profit from sustainability?

Next to talk from our panel was Wolfgang  Weinmann, who is the Strategy Director for Cafédirect

 Wolfgang starts off by saying “When I look at the question of; can you profit from sustainability? I thought, well, actually, it’s the other way round.  Sustainability is actually absolutely essential in the 21st century for a business to make profit, because you have to take into account along your supply chain, as Jo explains, are not just a small part what you control as a business, but alongside what do you actually with the stakeholders you engage from the production phase all the way through to the consumer and track the challenges and track the impact and find the solutions around sustainability.”

The production side of Cafédirect business is to engage with the farmers on environmental, social, organisational challenges of their livelihood, to start with, not only the production but how they can produce coffee and tea in a more sustainable way. Once a plan is formulated the final product is tracked to engage with the consumer through sustainable consumption.

It is important to do an environmental footprint and keep it regularly updated. Cafédirect are in the hot beverages sector and in terms of their environmental footprint the biggest impact is preparing the hot beverages. All sorts of issues need to be taken into consideration because he people working within the business might not boil the water correctly or use too much water which can consume a lot of energy, etc.  However, it is up to the people to make a more sustainable product, not just down to a business or the farmer.

Defining sustainability from producer to consumer along the supply chain require clear targets to be set to ensure that the environmental footprint is improved.  Wolfgang states “But then again, it’s not just about the environment, because as a business it really, as a core mission, it’s hard to achieve tangible impact in grower communities in developing countries, you definitely have to put the social elements there of the livelihoods of the farmers there as well and balance that with the environmental and, in the end, in the financial ones, because we are not a charity.  So we don’t do that out of only social reasons, we leave that to Oxfam, they do a better job than us in rolling out programmes in developing countries and communities.”  The organic market in the UK is not where it should be and a lot of us make these type of decisions, “Oh well, it costs 50p more for organic coffee or tea, do I want to spend that?  What are the benefits for me as a consumer?” In this country the organic market is very separate.  Since 2008, because of the recession, it went down by-35%, a massive drop in the organic consumption in this country.  The question is now linking the overall sustainability agenda with a producer who would actually like to go organic, because it’s better for him/her?”

There is a challenge to linking these different elements, but that’s what business modesl should aim to do. Wolgang gives us a tangible example, “I came back two weeks ago from Africa, from a small, tiny island called Sao Tome off the west coast of Africa, where we started three years ago to work with cocoa growers.  So from this scratch to really look, “Well, where can we have the highest impact again?” from production to launching a product in the UK market, where we get the sustainability right, and so working with them really is on improving their quality, because we definitely, when we talk about sustainability, it has to include quality, you can’t sell nowadays a product that is not up to scratch in terms of sustainability. So you have to get that message across with farmers, but also, of course, with the incentives in terms of incentives of training them and incentives of price.  Because our business model does recognise, of course, of shifting them benefits and values, because we are not about profit maximisation but actually about what’s the most sustainable way longer haul business models are, you know, a farmer has to benefit from producing higher quality for producing sustainable products.  So starting on that level we will train the farmers.”

Nestle, Kraft and Cadbury are finally waking up to sustainability and it is absolutely essential to their business model, and  showing engagement along a supply chain to do something about it.

Lastly Wolfgang summarises that second part of the question: Is it enough?  “Well, again, not, because the challenges in sustainability are mounting or they’re changing constantly, they’re not getting smaller, they’re actually getting bigger.  So there’s lots of catching up to do, I think, for many, many companies, and as well for Cafédirect, as I said, we never have all the answers, but we do try hard to find these answers and identify both the new areas of sustainability for farmers and for our business model, and for the consumer in the UK, to push the agenda forward.”

A week ago the Conversation Society hosted its third debate which looked at Sustainability: Is business doing enough? Is it OK to profit from sustainability?

First to talk from our panel was Jo Daniels, who is the Marketplace Director at Business in the Community. 

Jo starts of the discussion by saying “I think in terms of where we are in the agenda of corporate responsibility, I think there is a general acceptance now that it is okay to profit from sustainability and maybe when this whole movement started – I know when Business in the Community was started 30 years ago it was very much about how companies spent some of their profits on good charitable causes and investing in local communities and creating cohesive communities – and over the last 30 years the agenda has developed, it has become much more sophisticated and the challenges that companies are facing are ever more complex and challenging.  And so how we’re looking at a company’s positive impact on society and the environment, it’s right through its operations in terms of how it treats its workforce, through the impact of its products and services and some of its extended impact through its supply chain and its customer and consumer relationships.  So it’s much broader.”

Companies are moving towards a more sustainable business.  The real shift emerged about six years ago and it was really about changing the nature of the conversation and seeing how corporate responsibility creates value for the business. A lot of the retailers pay special attention to their supply chains and ensure satisfactory standards especially when it comes to child labour, excessive working hours, poor health and safety and bonded labour. Which is always reassuring to know!

Another question asked by Jo “How can we be part of a solution in tackling some of those key issues on the factory floor in our supply chain?”.  She comments further and states that there are different ways of working and it might involve working with different people who they’ve worked with before such as NGOs, and even their competitors, in order to tackle the root causes in their supply chain.  It is the business’ creativity and innovation that will be the ongoing solutions to the challenges faced. Competitively and collaboration will drive good practice which will be important to the well-being of any business.

It is further thought that corporate responsibility for CSR had been a department down a corridor that were the sales prevention team. When in fact business should be responsible and get all the different functions on board right and ensure that it is embedded into the commercial and business strategy.   Companies like Puma are starting to look at the finance around a price on the ecosystem services that they’re using, however, that is getting into a whole other department which probably before just saw CSR as a bit of a cost. But now, building that into how the business operates, is really, really important.

That collaboration between departments is where there will be evidence of this movement happening.  Unilever is another example of a brand-led company with their work being led by areas such as product innovation and working with their consumers. However, this concept has worked because it has needed the brand teams, the sustainability teams, the supply chain team, to work in collaboration (this is what will give them a competitive advantage.)

Another great example of investment into the supply chain is Cadbury who have invested 45 million pounds over ten years to take Cadbury Dairy Milk, Fair Trade.

Jo continued to talk about some great examples but ultimately sustainability looks at the external issues affecting us such as Population growth . It is to rise by 2050 reaching a total of 9 billion people, and by 2030, we will require 50% more energy to sustain the lifestyles currently had, with 50% more food, 30% more water. The future of sustainability looks uncertain but what will be key to further growth is ‘innovation’ and how the business model operates.

Jo’s final thoughts around the debate were “Is it okay to profit from sustainability and are businesses doing enough and going far enough?” my answers would be yes, absolutely – profit from sustainability – and,. “Are they going far enough?”  No.”