Blog Posts: sustainable strategy

This post originally appeared on The Guardian's Sustainable Business blog.

The way companies report on their financial status has changed little since corporate accounting standards were first created 80 years ago. Yet the world they operate in, and the risks and opportunities they face, have changed almost beyond recognition.

Global population has soared from two to seven billion, with human and manufactured capital now in abundance. Natural capital, on the other hand, has become scarcer and more precious. Once-plentiful forests, food, water, wetlands, minerals and metals are in short supply, creating supply chain and operational risks.

Today, a global coalition of regulators, investors, companies, and accounting organizations launched a new integrated reporting framework in six major cities, which aims to address this gap. The draft framework from the International Integrated Reporting Council (IIRC), based on input from 85 pilot companies and more than 50 investors, represents a much-needed milestone in the evolution of corporate reporting.

This piece originally appeared on The Guardian's Sustainable Business website.

As another year begins, big business will continue falling well short of taking the leadership role on the sustainability the world urgently needs. While many chief executives now publicly identify sustainability as a key issue for their companies, walking the talk is proving more elusive.

Successful bosses do not procrastinate. So why are boardrooms dragging their feet as sustainability challenges that have an impact on the private sector mount? As an observer of business trends for two decades, I see two interlinked problems hindering progress: first, corporate failure to embed sustainability into core business strategy, treating it instead as a standalone issue. And second, the lack of tools that allow corporations to make this leap in their day-to-day operations.

Sarah Cohen, an intern with WRI's Markets and Enterprise Program, also contributed to this blog post.

Do you have colleagues who roll their eyes when they hear the words “environment” or “sustainability?” The sad truth is that environmental issues are not always a passion for everyone at every organization. However, climate change and other environmental challenges are shaping tomorrow’s markets—so how do you draw connections between sustainability and business value for those who may not see it right away?

Today, WRI is releasing a guide to address this question and many more related to corporate sustainability. The guide—which was road-tested this summer by a dozen major companies like Target, Method, and Staples—adds a sustainability component to the traditional Strengths, Weaknesses, Opportunities, and Threats (SWOT) analysis that corporations have relied on for more than 50 years. Our sustainability SWOT, or “sSWOT,” is designed to help corporate sustainability champions engage colleagues, customers, suppliers, and even competitors to identify links to business risks and brainstorm new business opportunities.

Forests are vitally important for the global environment, economy, and population. The forest sector employs 13.7 million workers and contributes to about 1 percent of the global GDP. Plus, an estimated 500 million people around the world directly depend on forests for their livelihoods.

But forests are also under threat. From 2000-2010, about 15 million hectares of the world’s forests were cleared, and a 2004 assessment estimated that 8-10 percent of the global wood trade is of illegal origin. In addition to deforestation, illegal logging can cause government revenue losses, poverty, unfair competition with legally sourced goods, unplanned and uncontrolled forest management, conflicts, and other illicit activities that can occur in instances where illegal logging’s proceeds are linked to organized crime and corruption.

But there are solutions. One way to improve forest management across the globe is for businesses, governments, and citizens to seek out and demand sustainably harvested wood and paper products.

Today, WRI and the World Business Council for Sustainable Development (WBCSD) released the third edition of a guide that helps businesses develop sustainable policies and seek out sustainably harvested wood and paper products. The updated guide, Sustainable Procurement of Wood and Paper-Based Products, is accompanied by a revamped website.

Superstorm Sandy and the subsequent Nor’easter were the biggest news this week and last. The combination of two powerful forces resulted in unprecedented and widespread damage. Our thoughts are with those who have been impacted.

I can’t help but draw the connection between our recent extreme weather and businesses today—corporations are increasingly recognizing that they, too, are navigating two powerful forces. One force demands financial results, while the other requires increasingly sophisticated techniques to respond to climate, energy, resource scarcity, and other sustainability risks. The ways businesses navigate both these forces will determine whether they are truly viable over the long-term.

3 Pioneering Businesses Focused on Profits and Environmental Stewardship

On the eve of Hurricane Sandy, I moderated a Net Impact conference panel titled “Driving Bolder Investments in Sustainability.” This panel brought together representatives from Waste Management, Intel, and Pepsi to discuss how sustainability is no longer an add-on, but is becoming core to business planning. These three companies are incorporating environmental initiatives in order to shield themselves from business risk and boost their profits.

“To tell the story of the corporation is to tell the story of a grand bargain gone awry,” says Pavan Sukhdev in his new book, Corporation 2020: Transforming Business for Tomorrow’s World. It’s a bold statement, but he backs up his claim persuasively. While many companies are reaching record profits, they’ve oftentimes come at the expense of ecological degradation, rising greenhouse gas emissions, unemployment, spikes in food and fuel costs, and social inequalities.

But Sukhdev has developed what he believes is a framework for shifting the private sector towards a greener, more equitable economy. WRI recently hosted Sukhdev at our Washington, D.C. office to discuss his new book and his vision for the future. The founder of GIST Advisory and former head of UNEP’s Green Economy Initiative joined a panel discussion with WRI’s Managing Director, Manish Bapna, and Naoko Ishii, CEO of the Global Environment Facility.

“Pavan has written a remarkable new book,” said WRI’s president, Andrew Steer, who opened Wednesday’s event. “It not just a book, but really a campaign to change corporations in four viable ways.”

The 4 “Planks” for Corporate Sustainability

Sukhdev’s framework for shifting the private sector towards greater social and environmental sustainability includes what he calls the “four planks of change:”

This post is part of a series on World Water Week, an annual event designed to draw attention to and discuss global water issues. Read more posts in this series.

Agricultural production often comes at the expense of water quality. As my colleague, Mindy Selman, noted in a recent blog post, “Agriculture is the leading source of nutrient pollution in waterways—a situation that’s expected to worsen as the global population increases and the demand for food grows.”

But food security shouldn’t come at the expense of water quality—and in fact, it doesn’t have to. This is a topic I’m discussing at a World Water Week side event, “Securing Water Quality While Providing Food Security: The Nutrient Question.” Through the use of effective tools and strategies, we have the power to uphold water quality while still feeding a population that’s expected to reach 9 billion by 2050.

At WRI, we pride ourselves in being a mission-driven organization that defines success as bringing about positive outcomes in the world. But what about our own operations? Along with the work we do externally to achieve our mission, we have a responsibility to ensure that our own actions are the best reflection of the changes we want to see in the world.

WRI’s History of Sustainability

We recognized the need to “walk the talk” back in 1999, when we became the first NGO to complete a greenhouse gas (GHG) emission inventory and set a net-zero reduction target. At that time we also relocated to a green office, striving to incorporate our values directly into our physical surroundings.

The World Resources Institute (WRI) and our corporate partners are using a new twist on an old tool to spark innovations for a green economy—a “SWOT tool” adapted for corporate sustainability.

SWOT analysis is a framework companies have used for almost 50 years to evaluate strengths, weaknesses, opportunities, and threats (SWOT). In partnership with companies in WRI’s Next Practice Collaborative, we have developed a guide based on this familiar framework to help corporations find, evaluate, and act on new risks and opportunities as environmental challenges shape tomorrow’s markets.

We are excited to invite companies to help road test this new tool. Those who do will help shape the final version, have the opportunity to be featured as a case study, and can connect with other companies to share insights on the big trends they see around the corner.

WRI's experts will continue to provide commentary and analysis of the results of the Rio+20 conference through our series, "Rio+20 in the Rear View." For more posts in this series, see here, here, and here.

Many stories came out of the Rio+20 proceedings; Jo Confino’s blog in The Guardian is an excellent place to review what happened. But now that Rio+20 is behind us and the 50,000 government officials, business representatives, and activists have gone home, one expectation is clear: Leadership from the private sector is critical to advancing sustainable solutions in the coming years.

The question is: Are business leaders on board with this strategy? Is transformative action possible or desirable from a business perspective? We can’t speak for all businesses, but on June 17th in Rio, WRI partnered with Forum for the Future, a UK-based NGO that works with companies on sustainable business practices, to present a panel featuring corporate leaders that are currently taking steps toward "next practices."