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Deloitte Primer Provides Sustainability How-To




Sustainability for dummies? Not quite, but a recent paper by Deloitte Consulting LLP called The Green Gap does bear a certain resemblance to the famous media franchise. A primer on how to create an effective corporate sustainability program, it organizes its counsel into nine precepts, one short of the biblical ten.

Here's our short-form understanding of them, along with some no-cost commentary:

1. Know what the term means. Sustainability is an ill-defined concept. Know what it means for your company, and communicate what it means to everyone on your team.

2. Embody your commitment in a sustainability vision statement that's aligned with the corporate mission statement. This, the report says, is so important that it's like the organization's DNA. Which is true … only it's also one of those must-have documents that often is rarely referred to, kind of like a will.

3. Set your priorities. This is an intensely strategic activity. Costs, reputation, and risk are all part of the analysis that will determine which of sustainability's many aspects get the most attention.

4. Benchmark your progress. Metrics are as important to sustainability as location is to real estate. Measure, measure, measure!

5. Use life cycle analysis intelligently. The Green Gap correctly points out that life cycle analysis—the science of measuring environmental (and sometimes social) impacts from cradle to grave--is imperfect and unwieldy. Don't get hung up on it, Deloitte counsels wisely. As an alternative, it recommends creating "a 'sustainability index' that serves as an internal tool to evaluate each product line against the others based on products' sustainability attributes and overall value to the company."

6. Don't go it alone. "Partner, partner, partner" is as important a mantra as "measure, measure, measure." This is the age of collaboration, and nowhere is this bias more de rigueur than in the sustainability arena, which is premised, among other things, on the post-social Darwinist notion that we'll all do better by collaborating than competing.

The Deloitte paper doesn't mention a corollary principle: don't go it alone inside your corporation, either. You need a champion (see #7)--and corporate-wide buy-in, too.

7. You need a special someone to drive the sustainability agenda, and the chances of success are increased enormously if your champion has a high perch on the corporate hierarchy.

Although the Deloitte paper doesn't mention this in so many words, having a champion is not in and of itself enough to secure a place for sustainability going forward. Recent corporate history is replete with examples of a company's green commitment collapsing in the wake of the senior-level champion's departure. Sustainability has to be embedded in the culture. That's one reason for having a sustainability vision statement; it's also why a successful program requires collective buy-in.

8. Know when and how to communicate. There's an art to knowing how to communicate about sustainability issues. It's probably better to say nothing at all than to talk about sustainability inartfully. In this skeptical environment, it's very easy to damage the corporate brand by inviting the conclusion, rightly or wrongly, that you're greenwashing.

9. Don't believe everything you hear about the green consumer. "Going green appears to be a big deal on store shelves due to the growing number of consumers that are becoming aware of sustainability issues and modifying their purchasing decisions accordingly …" the Deloitte paper states. "However, it remains unclear whether consumers will sacrifice convenience or price for sustainability and thus, how lucrative sustainability will be for a company over the long run." The Green Gap then cites an Ipsos Reid study finding that "four in ten Americans are not more willing to pay a price premium for green products."

Not to quibble, but if we turn this pronouncement on its head, it means six in ten Americans say they are more willing to pay a premium for green products. That is a really big number, and even if we discount it considerably because of the so-called "halo factor" (survey respondents presenting themselves as more noble than they really are), that still leaves a sizable niche that is green premium-ready.

The track record of the last 20 years has proven that green consumers talk a bigger game than they buy. Still, the number of green consumers is large and growing, and that's the real takeaway here. Deloitte puts it this way: "(S)ustainability can certainly drive competitive advantage when targeting the right consumer segment."

So there you have it: the Carl's Notes version of the Green Gap report.

A well thought-out document, the Deloitte white paper—really a marketing paper——will probably be most useful for executives at corporations that are just starting to climb the sustainability learning curve. Companies with established sustainability programs are likelier to use the paper as a checklist to make sure they didn't stumble getting going—and maybe to pat themselves on the back as well.

Which brings us to the tenth commandment, which The Green Gap didn't mention. Never rest on your laurels. Commit to continuous improvement.

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