Sustainability: the New Way Forward for Organizations – Part 3

December 9th, 2010   •   no comments   

Ariane David Sustainability Part 3 of 3: Systems Thinking

What Sustainability Means to Organizations

How does the issue of sustainability translate to organizations? Of course, who would argue with the notion of a business becoming completely sustainable in perpetuity? In actual practice, though, we see that need to do things very differently from the way in which we’ve been doing them.

It’s especially difficult when we were able to achieve a high degree of success in the non-sustainable model. Looking at the three pillars of sustainability, the environment, the economy, and social development helps us see what needs to be done.

In terms of the environment, businesses must work towards being waste/pollution/depletion neutral. According to Ray Anderson, the founder and CEO of Interface, the largest carpet company in the world, and one of the greenest businesses, we need to go from “extractive to renewable, wasteful to waste free, abusive to benign, fossil fuels to renewable energy, and exploitive to collaborative.”

In terms of organizational economy, rape pillage and plunder is no longer a sustainable business model.

We need to come up with a financial model that takes into consideration all the bottom lines, not only the financial bottom line. For example, today most companies calculate cost of production as labor, materials and overhead. But what about the cost of the pollution by products of manufacturing from the standpoint of clean up, health, and quality of life of the community?

Who Benefits, Who Pays, and Who Should?

What about the cost of depleting non-renewable resources such as fossil fuel? The cheap cost at which we are extracting it now does not reflect the high, perhaps prohibitive cost, of extraction in the future nor does it consider what will replace it when it can no longer be extracted. Thus, the actual cost of goods must include ALL the costs, including those that have historically been shifted to the community.

These costs must also be considered when we calculate the price to consumers: at retail an item that sells for two dollars might really represent and actual cost of ten dollars, the difference being paid by members of the community in the form of taxes, health and other costs.

In organizations social justice translates into the understanding that we no longer can choose between employee well-being and profits, nor do we need to. This means providing employees with an environment in which they can experience work satisfaction, meaning, personal growth and learning, where they are compensated fairly in relation to the pay of top managers.

Ray Anderson of Interface – Mission Zero

Here’s the ultimate sustainability story that will demonstrate what sustainability principles can do for an organization. In 1994, when he was 60, Ray Anderson of Interface carpet company read Paul Hawken’s book, The Ecology of Commerce, and had a startling experience, that the resources of the earth, belong to all life on earth equally, yet he and his company had become successful by taking more than their share and by using it in a way that harmed the environment.

Through this awakening he realized that in order to benefit himself, he was literally stealing from the rest of the world and from future generations. This so stunned him that he created “Mission Zero” – zero waste, zero emissions, zero use of non-renewable energy in his company by 2020.

He embarked on a program of research and development aimed at altering all of his manufacturing processes to put Interface on track to meeting his goal of sustainability.

Part of his program was to create a culture which would allow employees to participate in this wonderful adventure. He invited ideas from the rank and file, rejecting none without consideration. He encouraged employees to participate in the formation of strategies and goals.

Employee satisfaction was and is a high priority. As a result Interface attracts and retains the very best talent and employee productivity is high. Employee engagement and affinity, two very important factors in productivity, are high at Interface, while absenteeism is low.

According to Anderson, the benefits to Interface of social sustainability include reduced operating expenses including lower energy costs, greatly enhanced reputation/customer attraction/good will, employee retention leading to lowered recruitment, training and knowledge retention costs, and higher productivity.

This year Interface is right on track to it’s goal, Mission Zero. Greenhouse gas emissions were down by 80% while profits doubled. Fossil fuel consumption was down 62% and water consumption was down 60%.

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