In 2018, a question was put to Donal Daly, CEO of Future Planet, by his teenage son. “Dad, will the planet still be ok when I am your age?” Daly had recently retired from a successful software career as founder of five companies. His son’s question gave him cause to pause. The emerging climate change problem was broad in scope and increasingly urgent. Businesses, as well as their customers, would be dramatically impacted.
Over the years Daly had created software used by thousands of corporations to improve their business performance. In response to his son’s concern, he asked himself a question. “Can companies reduce their impact on the planet without putting their business at risk?”
To brainstorm the problem, Daly turned to Ingrid De Doncker, one of Europe’s leading sustainable procurement and supply chain thinkers. At that time, she was CEO of her own company, and a member of a pan-European sustainable innovation think tank. She also lectured universities across Ireland on the very topic that Daly wanted to address: Can corporations procure goods, operate supply chains, and serve their customers while conducting business responsibly? De Doncker’s answer was unequivocal: “Yes, but it is complex. Sustainability demands instant collaboration between companies, their suppliers and customers. So, if you want to fix it, the solution needs to be smart, and digital.”
De Doncker, now Head of Research and Innovation at Future Planet, joined Daly to consider the challenge: How can we make it easy for companies to respond to the pressures of climate change? These pressures are becoming more evident every day.
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Legal directives from the EU – aligned to the Sustainable Development Goals (SDGs) – mandate sustainable business practices and put pressure on companies to reduce carbon emissions. Business of all sizes now need to to measure their carbon emissions, but also report on the Environmental, Social and Governance (ESG) topics pertinent to the business. Companies that adopt ESG frameworks consider the Environmental, Social, and Governance aspects of their activities alongside the Economic aspects. This ESG reporting requirement has taken on a life of its own and has become a complex challenge for many companies.
Climate crisis is making its presence felt. The depletion of natural resources creates environmental stress, threatens people, and puts the future of many businesses at risk. When we depend on natural resources like good quality air, or clean water, how can we operate when those resources disappear?
For many companies, pressures are coming from all stakeholders; employees who want to work with purposeful companies, investors who need to ensure their capital is not put at risk by the impact of climate change, and customers looking for sustainable products and services.
In time of change, opportunities always emerge. As Jack Welch, fabled CEO of GE said, “If the rate of change on the outside exceeds the rate of change on the inside, the end is near.” Extending that hypothesis; those companies who act quickly and proactively to become sustainable gain competitive advantage. They improve employee acquisition and retention rates, achieve cost savings, and increase revenue because their products and services are more attractive to their customers.
Business sustainability is often defined as managing the triple bottom line – a process by which firms manage their financial, social, and environmental risks, obligations and opportunities. Sustainable businesses are resilient, and they create economic value, healthy ecosystems and strong communities. These businesses survive external shocks because they are intimately connected to healthy economic, social and environmental systems.
To make it easier for companies to consider how sustainability applies, Daly and De Doncker came up with a sustainability structure, mapped to how business operates – the Live Better, Buy Better, and Design Better methodology, and a software platform that makes it much easier for companies to deliver sustainable performance.
Live Better is what happens within the four walls of a business, applying ethical business practices in the pursuit of sustainable profit and revenue growth.
Buy Better addresses the interaction with suppliers. Supply chain emissions usually dwarf those coming from a company’s direct operations. Sustainable procurement is the most reliable answer to this problem. Companies can achieve approximately 15 to 20 percent cost and emissions savings, as they focus on operational efficiency and waste reduction.
Design Better encompasses the interaction with customers and the delivery of products and services to the market. It mandates the designing of “better” products, thinking about the customers’ future, designing out waste and designing in circularity.
Daly and De Doncker contend that sustainable business is better business, and companies who pursue the better business agenda will outpace their competition. To benefit from the positive side of sustainability means a company should look beyond just measuring emissions or reducing energy usage. Although we know that reduction in most things – energy, water, waste, business travel – has a direct correlation to saving money, unless we fully integrate, into the operations of the business, sustainable practices such as Sustainable Procurement or Circular Economy Principles, we are less likely to see the increase in business resilience, competitive market advantage, and the improved financial return that is available to the progressive companies who take that more strategic approach.
For Daly and De Doncker to deliver on their vision, they combined 30 years’ software experience with 30 years’ sustainable procurement and supply chain knowledge. The ambition of making it easy for business to achieve sustainable performance seemed lofty at the outset, but now their expertise – a combination of qualitative and quantitative, software and people, logic and exuberant optimism – is helping companies achieve results in less than 90 days. That’s a fraction of the time it might otherwise take. For those of us hoping that the planet will indeed be ok when our children grow up, we should be cheering from the sidelines.