If you want to raise profits, becoming more sustainable is a great way to achieve that.
This was probably the biggest message I got from the Sustainable Living Festival in Melbourne last weekend. And I also got a better insight into the most important step for becoming sustainable.
Build Your Community
At the very core of all companies that presented was the realisation that it is all about people. Rather than seeing staff as numbers who contribute to the bottom line, an appreciation of the individual and their contribution is needed.
Tim Cotter, a psychologist showed that human values are pretty aligned. The problem is that many people do not live their values.
So to raise profits, a company can raise awareness and support a re-connection between values and action. A fear many traditional business people (especially accountants) seem to have is that this process will reduce the company’s profitability and focus on more intangible things.
Reality paints a different picture. In various studies the return of companies that follow sustainable (or ethical) principals have outperformed their “traditional” counterparts.
The first day of the Sustainable Living Festival is drawing to a close. I’ll be writing in more detail, here just a quick summary of what my impressions are so far.
Even though the Festival is in its 6th year right in CBD Melbourne, it is still mainly converted that visit it. That might change on the weekend, though.
Small companies are run by people that believe in the importance of sustainability. They cannot answer any questions with regards to the financial bottom line: What do consumers save?
Larger companies are really onto the savings that can be achieved with sustainability. One excellent example is MECU, a credit union. Their costs are 54 cents in the Dollar, compared to other credit unions where the costs are 78 centa in the Dollar. I could not find out yet, how these savings were achieved, but I have been promised to get that information.
One huge factor in the corporate talks was staff engagement. They all marvelled at how much productivity improved, because staff was involved in something worthwhile.
The biggest thing that stands out is the volunteers who make this festival possible. It is so wonderful to see so many committed, happy, joyous people (young and old) to bring sustainability to the masses.
I just booked my tickets to visit the Sustainable Living Festival in Melbourne next month. It is very exciting to get back to the roots of where my passion came from.
Flying Green
While I booked the plane ticket, they gave me the option to offset my carbon emissions. Pretty exciting on one hand that it has come into such a mainstream process.
On the other hand, I wonder how much difference that really makes. If it becomes so easy to pay (It was only $2.87 or something), there is no need to venture further and find the real sustainable solutions.
But I guess, it is better than nothing. It certainly adds convenience to the process of being green. But it does not help anyone’s profit.
Company develops baseline to compare eco-efficiency improvement against
Site survey to identify opportunities for positive ecological impact
Development of action plan of how to implement these solutions
Implementation (There is also the potential of a rebate of up to 30% of the investment)
Reassessment (after one year) to assess the savings.
No overall financial analysis available
I asked Michelle Olivier whether they had statistics on the financial impact on businesses. It would help figure out whether sustainable solutions bring a positive financial return. Due to their workload and staff shortages, she does not have these figures and is not planning to develop them either.
So answer here to my question: Are sustainable solutions more competitive than their “traditional” counterparts.
Sustainability involves Action
What their website did remind me off is that a change in actions is essential to achieve reduced impact on the environment. Reduce, re-use, recycle, switch off lights, etc.
So I am sure how far I get with my goal to improve the convenience. After all, this whole process ties up some internal resources (even though there is the payback of additional motivation).
On their website, they publish their complete toolbox for anyone to use. This includes detailed Excel spreadsheets to work out the financial and ecological impact. It also gives may ideas of what actions can be taken in each of the 3 areas (water, waste, energy). Technorati Profile
(Paul has written the book: Be Unreasonable the unconventional way to extraordinary business results.)
Here are his questions:
What am I trying to accomplish?
I want sustainability to spread through the Australian business world.
What are some of the ways that can happen?
Mediawork that educates entrepreneurs on the sustainable benefits
Creating demand for sustainable solutions in consumers, so businesses are forced to change their production/services.
Influence through local, state and federal politics
Sustainable solutions for existing problems that are far more competitive than their “traditional” counterparts
Validate that this is in some way possible.
My interest lies in the fourth possibility. That means market research.
Which solutions are more competitive?
What makes them competitive? Price, Convenience, Speed, Quality?
How are they sustainable?
What is the bottleneck of them reaching more clients?
At the same time, I need to find the most pressing problems Australian business are facing. And when I say problems, I mean anything they are spending money on.
What this does not answer yet is how my involvement will support that process.
Why would business be a good sustainability advocate? Because they can act more logically than an individual. They can also take into account a more long-term view and their actions have a bigger impact.
Making Logical Decisions
Humans make buying decisions on emotion. They might use logic to explain to themselves why they should buy something, but the essential decision is made emotionally.
In business this is different. A business is for profit. Therefore any purchasing decision is made based on its financial merit. If it does not increase the revenue or reduce the costs (thus leading to greater profit) it does not make sense doing it.
And here is where I see the biggest chance. Financial analysis is logical, not based on emotions.
A Long-term View
Financial analysis also always includes time. The return does not have to be immediate, it only needs to be there overall.
Bigger Impact
When you compare anything a business does with what an individual does, the business usually does it in a bigger way:
they use more power
they use more water
they have more waste
they transport more
their impact on the community is bigger (just from the amount of people who work in a company)
That means two things:
It will be cheaper to deliver a sustainable solution and
the direct positive impact is greater
there is an indirect positive impact through the team carrying the solution forward into the community
So sustainable solutions for business. That is necessary to push sustainability forward.
First of all there are the countless volunteers and activists in not for profit organisations.
Thank you, thank you, thank you for the work you put in. As far as I have experienced that field the main focus in on educating people.
Education is usually focused on creating a more integrated understanding of sustainability. And on creating values that are more long-term focused.
Even though highly important, the issue I see with it is that humans are inherently lazy and short-sighted. Unless something is glaringly obvious or has an immediate impact on us, it is easy to ignore.
Government
Government has an important role to play by recreating rules that more closely place the true costs on the person or company that profits.
The drawback: government is dependent on money and makes decisions based on power within industries. The dirtiest industries (e.g. power production, warfare) have large investments in old technologies. For them it makes sense to protect that investment and turn it into a profit.
Therefore the power struggle of various interests slows the governmental intervention process down. Let alone the international struggle of blame and trying to make changes, while assuring the best outcomes for each individual country.
Individuals
What if all individuals just started purchasing sustainable products? There is this theory that prices for sustainable products would come down. However, economy also states that higher demand leads to higher prices.
Any which way, currently it is too difficult to find many sustainable solutions. And if you find them, they are expensive and often in no way economic in comparison to their “traditional” counterparts.
One example is green power. You pay for the privilege to know that the amount of electricity you use is produced through renewable sources. Many people do it, and it is very commendable, but is it sustainable? Not, if you believe in the power of profit.
Many other solutions are inconvenient.
So individuals are also not the solution to reaching a sustainable society. The ones that work for it would suffer inconvenience and a more expensive life without having any direct benefits.
Business
That leaves business. For many “green” activists, business are the bad guys in this whole puzzle. They are the ones striving for more profit, they are the ones using small powerless people, carting resources away and blasting their dirt into the air without thinking about tomorrow.
However, each corporation is made up of thinking and feeling people. They have children, they know what is going on around us, they want a good life and want to live in peace within their community.
Not acting that way is probably due to external factors, pressures that the system “corporation” puts on them. And if we translated corporations into individuals and the external pressures into examples of our own lives, we would probably find that we are acting the same way (just on a different scale).
However, there are many corporations that are struggling to find solutions that are truly sustainable (e.g. BMW, BP, Proctor & Gamble).
My Contribution
Not for profit: very important to educate on values, but easy to ignore.
Government: very important to create framework for sustainability, but slow.
Individuals: cannot be asked to be inconvenienced and pay extra for it.
Business: under pressure to deliver and filled with passionate individuals.
While all are important, I think that business has the critical role to fill. This is also where my skills can be used the best. So I will dig deeper into how business and sustainability can be merged.
“Sustainability is a characteristic of a process or state that can be maintained at a certain level indefinitely.” according to Wikipedia.
The process I am interested in is that of humans living on planet Earth.
There are 3 major components: People, the planet and profits.
Profits
I need to start with the end. Profits are the driving motor for our global community. It is also what drives each individual in each interaction.
What I mean is that whatever we do, we try to benefit from it. In each interaction we put in time and effort and maybe money so that at the end we have something.
And if it is possible to get the same result for less time, effort and money we go for it.
The problem in our complicated world is that the time, effort and money is not always passed on to the person who gets the benefit.
One of the best examples is global warming. It takes relatively little to dig up coal and burn it to generate electricity. Great profits are made. But now we find that the real costs include the results from global warming. These costs are carried by the community of human beings, even though individual companies and people have profited.
Planet Earth
No matter whether you are sentimental and like nature or you are a hardnosed business person, there is no denying that our lives are intricately linked to the well-being of a multitude of species and systems and processes that are all part of nature. Any imbalance in nature leads to a suffering of humans.
Many of the human actions have lead to unexpected problems elsewhere. In Australia, the introduction of cane toads are a well-known example. To fight beetles that were eating the crop, cane toads were introduced. Today they are still a plague.
Another example are our finite resources. Building a society that is dependent upon oil as its main source of energy is very short-sighted. (Peak Oil)
People
Naturally people come first. After all that is what I am and it still gives me the greatest joy to interact with others.
And anyway without humans, nature would look after itself anyway and we would not have to worry about sustainability.
But there is another aspect. Profits are often made with little regard to the impacts on human beings. Think of the sweatshops in Asia and Africa.
Sustainability - The Ideal Solution
So here is what sustainability means to me:
We use solutions that have a positive impact on the planet and care for people throughout the process of producing, using and discarding them. Additionally, they produce a profit for the company offering them and are no more expensive to me as a user.
2004 - I finish off my Master in Business Administration. I also spend a year working with an inventor who has developed a safety device for the trucking industry.
2005 - Next I set up my own company (Passionate Management) to coach natural health practitioners on how to market their practices.
And most importantly, our daughters (Marlalena and Amelie) join our family. This is a big focus of my life and I am thankful I can take the time to spend with them, seeing them develop into their own personalities.
We move into a house, put in solar hotwater, repaint with chemical-free paint, free our garden from noxious weeds, drive the most economical cars in their class (at first a Toyota Echo, then a week before Amelie’s arrival we get a Toyota Corolla Wagon), buy organic, support our community and have short showers.
The months and years pass and suddenly it is the end of 2007 and I wonder whether I have come any closer to my dream of 5 years ago: supporting sustainable businesses in a way that makes a difference in the world.
The answer is simple: I have not.
That is what 2008 is dedicated to. This is what this blog is dedicated to. I want to find ways how sustainability permeates all of our society, where it is not a questions any more whether you are sustainable or not, it is just the natural and only option.
The Sustainable Living Festival turns into an annual event for the first time. It attracts over 50 volunteers in responsible positions during preparation.
160 exhibitors show their sustainable solutions to 120,000 visitors. Our core team of 8 full-timers, who all took the risk of potentially not being paid all get their due.
The last 12 months have been an amazing ride through joy and frustration.
Some of the sponsoring companies were absolutely amazing at supporting this huge volunteer effort, others had to be dragged to the party.
I realise that it is a lot more comfortable to have a budget that funds all the event plans from the start, rather than having to adjust plans and budget all the time to accommodate necessities.
I also realise that a strong vision and sense of purpose greatly enhances any team. Bringing so many volunteers together, letting them follow their own dreams while weaving it together into a whole was an amazing feat. Luke Taylor held that vision.
Brigitte House had the ability to smooth out any ruffled feathers that I created through unpopular financial decisions. Together we achieved a huge step towards an event about sustainability that was also run using sustainable concepts.
People and planet were happy and a profit was left over to fund other parts of the Sustainable Living Foundation. A success in all areas.
My wife had finished her Master, so we decided to follow our dream even further and move north to the sunny Sunshine Coast in Queensland were it is warm, even in winter.
If you want to raise profits, becoming more sustainable is a great way to achieve that.
One of the organisations on my list is ecoBiz, a government run 
As I sit here today, reviewing what I have written yesterday, there is one big question in my mind: How do I move forward now?
Why would business be a good sustainability advocate? Because they can act more logically than an individual. They can also take into account a more long-term view and their actions have a bigger impact.
Not for Profit Organisations
“Sustainability is a characteristic of a process or state that can be maintained at a certain level indefinitely.” according to 
2004 - I finish off my Master in Business Administration. I also spend a year working with an inventor who has developed a safety device for the trucking industry.
The 
