Business Sustainability
Published Online in Sustainability Company (www.sustainabilitycompany.net)




Why Business Sustai...
Why is business sustainability strategic ?

This holder was produced from corn           California, Oregon State and many...
Giovanni Tordi, CEO Sustainability Company


positive impact on the environment          environmental legislation, relati...
Why is business sustainability strategic ?

      ith a rate of deformed birth           speculation in housing in the USA...
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Is Business Sustainability Strategic? Giovanni Tordi CEO of Sustainability Company

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Second Lecture for Sustainability course in LUISS university, Rome. Topic: Importance of Sustainability within Strategy decisions of Organizations.

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Is Business Sustainability Strategic? Giovanni Tordi CEO of Sustainability Company

  1. 1. Business Sustainability Published Online in Sustainability Company (www.sustainabilitycompany.net) Why Business Sustainability is Strategic ? Lecture: 2 By Giovanni Tordi - Sustainability Company CEO Lectures on Business and Environment Sustainability for Luiss University, Rome – 2009/2010 In the medium long term the Consumption styles are modified. enterprise must generate profit. We The consumer is always more have seen that, if we concentrate attentive and available if, in case of exclusively on “short term”, similar efficiency, in satisfying his all originating profit is sensibly at risk. requirements, he can obtain an It is around this concept of risk that indirect benefit for the environment business sustainability is based: and for the society. SUSTAINABILITY = DEVELOPEMENT Generate an improvement in + MITIGATION OF RISKS quality In many cases, one of the effects of Sustainability is therefore no longer sustainability integration is the essentially a concept with a social induced improvement in the quality and environmental dimension, but of products. also economic. In fact, a non- The reduction of the environmental sustainable approach may cause the impact of a given product through progressive failure of the enterprise. the modification of the production What are the benefits deriving from method, represent a quality element the introduction of sustainability in perceived by the client. the conduct of business? Let us A company producing cotton fioc make some example: had always suffered of problems with the environment organization. ANTICIPATE THE MARKET, This was caused by the fact that the INNOVATE plastic holder of the product was not biodegradable and was polluting the Introducing sustainability in sea. processes and products, allows For this reason, when the company innovating and differentiating from found a material that was absolutely competitors. There are today many biodegradable still having the same companies which, like Toyota and structural characteristics of the Fiat, present hybrid models - plastic holder, the effect on the gasoline + electric or gas - capable attitude of the environmental and of reducing consumption, improving consumers organizations was highly cost efficiency and reducing CO2 positive. emissions.
  2. 2. Why is business sustainability strategic ? This holder was produced from corn California, Oregon State and many meal and was introduced in the multinational companies (Toyota, production chain. Bell Canada, Xerox, Hewlett Packard, and others). For example, Reducing operational costs Xerox Usa estimates its Zero Waste (example score reducing energy policy has saved, since 1990, more costs) than $ 2 billion. Hewlett Packard in Nowadays many companies are re- Roseville, CA has reduced waste by qualifying the energy system of 95% and saved 870,564 dollars in their buildings. They are definitely 1998. Interface, Inc. Atlanta, GA aware of the fact that energy was a has saved more than $ 90 million. high cost, which is subject to In 2000, the establishment of Epson increases caused by shortage of Portland, Oregon has reduced its fossil combustible materials. waste to zero and has saved $ The utilisation of new technologies 300,000. In 2006, Toyota has from renewable sources (solar, achieved the goal of zero waste in aeolian) allows savings of up to all its European plants. 60/70% of energy costs and a reduction of CO2 emissions. Improving the work environment Reducing waste and the One of the fundamental elements environmental impact for prosperity of companies is the In production processes but also in management of human resources. services, disposal of scraps may be To this end, the adoption of policies optimized with substantial benefits in favour of employees is a key for the environment. In the sector of element for success. electronic RAEE, some components There are numerous cases of of waste may serve to originate new wellness at work: companies which products. Very often we can see the open the gyms for employees or reconditioning of obsolete nurseries for the children have computers which may be reutilized obtained a remarkable improvement where there is no budget for the in acceptance and productivity. In purchase of machinery (schools, Spain, some companies have prisons). allowed a longer rest period in the This is a tangible example of waste middle of the working day to allow management with social and their employees to rest at home. environment benefits. In so doing, they have obtained a There are companies, like Nokia, remarkable increase in the which, annually, make handsets afternoon productivity. Integrating recycling campaigns. services for employees in the But this is also true in solidarity food company model is definitely a trade with food bearing a close success element in attracting new expiration date and serve a low cost talents and keep in the company. chain for poor families. In 2009, a survey of The Zero Waste Strategy, is now MonsterTRAK.com found that 80% carried by 50% of cities in New of young professionals interested in Zealand, Australia, Canada, from working in an ambient that has a
  3. 3. Giovanni Tordi, CEO Sustainability Company positive impact on the environment environmental legislation, relating to and 92% would be more inclined to climate change within the next five work for a company environmentally years and third in just two. Those friendly. A chain of fast-food who had expected an earlier trend, restaurants in the U.S., through a have had more time to improve study on employees, found a direct their standards. correlation between the pursuit of sustainable policies (organic food, Reducing reputation risks waste reduction, energy efficient The induced effect of having lighting, training, ....) and the ability sustainability integrated in business to attract qualified workers. is to be found in a return of reputation based on facts. Reducing operational risks Many corporations invest millions of One of relevant aspect of risk euro in publicity communication governance is definitely that of aiming at the sale of their products mitigating legal and insurance risks. and trying to motivate a positive It is sufficient to think of refunds approach in the consumer. made by financial sector companies Actually, today, also thanks to the (bonds in default) for consigned diffusion of Internet, which products, which were not in line with represents an innovation for the the risk profile of the client and consumer to inform himself, have not gone through a reputation is more easily achieved sustainability examination. with facts. This has meant long and costly For this reason we start seeing in processes that have generated some firms, departments in charge unbelievable recovery costs for of management of reputation risks. companies. These are unites specialized in the preventive evaluation of risks which Anticipating policy changes may be caused by some company Having a sustainability approach and decisions. follow it up with a pro-active At the same time, the incorrect stakeholder engagement, often integration of sustainability in allows to anticipate times and to business may cause a threat to the overcome, without a critical impact, development of the enterprise. policy changes. In some European countries the Pollution risks introduction of an energy It is the effect of unsustainable certification is a mandatory element processes. An incomparable to proceed in the sale of buildings example is provided by the great (also in some Italian regions). environment catastrophe caused by Having foreseen a step of the pouring of highly harmful and certification in the conduct if toxic substances in the business and work processes is an environment. element of remarkable advantage. Here are a few examples: According to a study published in 2008 McKinsey study, 80% of • 1976, the emission of dioxin in managing directors expect new Seveso left the population w
  4. 4. Why is business sustainability strategic ? ith a rate of deformed birth speculation in housing in the USA, 6.6 times higher than the have gone bankrupt. Italian average. The impact of this failure has been dramatic not only for thousand of • IN 1984 the Bhopal pesticides employees losing their job but also plant in India killed 3787 for all those people which were people in just a few days after badly advised and lost their life the discharge of 40 tons of saving. Methyl isocyanate. But still nowadays, the mortality rate Problems of products or services is 2.4 times higher than Always because the superior National average. information capacity through a community web, if a given product • After the explosion of the 4th has some problems, the network reactor of a nuclear plant in puts it immediately in evidence. 1986 the population of There are non-specialized blogs of Chernobyl decreased from people having their own 350.000 to 400 habitants. independent opinion about products Debris are still easily findable and services, throwing under a good around all EU. or a bad light the work of some firms. • The British Petroleum is One example could be the Dell case, ordered to refund 9.5$ billion a company which produces to the Mexican Gulf population computers and entered the market after a leak of more than 4 with highly competitive prices. million barrel of petrol in the The problem evidenced by ocean. consumers was in the customer care and assistance. These catastrophes have caused For these reasons, after a short death to human beings, upset the time, an independent campaign was life of thousands of persons and launched attacking the company in damaged the environment in a internet. This originated a heavy dramatic way but nowadays we talk decrease in sales and forced the about pollution also in finance. company to make improvement and We should consider the so called guarantee a better after sale service “toxic bonds”, I.E. bonds whose to clients. value, all though submitted to the If Dell had immediately integrated evaluation of financial analyst of sustainability, this attack to their important rating agencies (Moodys, products and services was not going Fitch) are thwarted, dissipating life to take place. savings of many investors. We can remember the case of Lehman Brothers, historical company in the world of international finance, with a high rating (A+) which, because of

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