"And it wasn't just Werbach that was feeling this -- but he captured the zeitgeist of the time. As a result, environmentalists in greater number began working with businesses to prove that going green has incredible bottom-line benefits. This is a fortunate trend for environmentalism and business.
Sustainability as strategy is a rallying cry for driving out waste and inefficiency. It is a powerful tool for engaging employees and suppliers in an innovation strategy drive to both incremental and radical improvements in operations while managing risk. In the two year period of 2010 and 2011, sustainability initiatives saved Canadian Tire approximately $10.7 million in annual avoided costs; 215,000 gigajoules (GJ) of energy (enough to power more than 2,000 homes for a year); 14,000 tonnes of greenhouse gas emissions and more than 6,600 pounds of waste.(LINK)
Just how much potential savings could sustainability generate for corporations and society? Amory Lovins, the founder of the Rocky Mountain Institute, has documented how using best available existing technology we could reduce current energy use in North American by 70 per cent to 90 per cent without changing our current lifestyle!
The Challenge
Like many large, established companies, growing from a single Toronto location in 1922 to the national retailer and brand management company, Canadian Tire, required specialization of business by functions -- such as strategic sourcing, merchandizing, marketing, transportation, and the operation of distribution centres and stores.
Like many large, established companies, growing from a single Toronto location in 1922 to the national retailer and brand management company, Canadian Tire, required specialization of business by functions -- such as strategic sourcing, merchandizing, marketing, transportation, and the operation of distribution centres and stores.
While enabling the business to scale, the unintended consequence of this organizational structure is that individual functions optimize around an increasingly narrow core purpose, leading to the erosion of a system-wide perspective of the enterprise level. As silos evolve, business decisions in one area may be undertaken without the insight into the unintentional effects on other areas.
Sustainability as strategy forces siloed departments to work cooperatively to both define opportunities and devise solutions. Businesses that are using sustainability as strategy are realizing that it is the most powerful tool for driving cooperation and innovation in the organization.
Sustainability as strategy forces siloed departments to work cooperatively to both define opportunities and devise solutions. Businesses that are using sustainability as strategy are realizing that it is the most powerful tool for driving cooperation and innovation in the organization.
The result: rethinking business activities, redefining peoples' roles, responsibilities, measurement and incentives. The experience at Canadian Tire of pursuing sustainability as a strategy has been organizational innovation, while generating millions of dollars cost avoidance, new sources of revenue, and thousands of tonnes of avoided waste and greenhouse gas emissions.
Why CSR is Not the Answer
Today, many companies are focused on Corporate Social Responsibility (CSR). As we often see it practiced, CSR is about reporting the company's activities. As a reporting function, CSR has little, if any, power to transform the organization. If we were cynical, we might say that many CSR activities are nothing more than a public relations initiative.
Today, many companies are focused on Corporate Social Responsibility (CSR). As we often see it practiced, CSR is about reporting the company's activities. As a reporting function, CSR has little, if any, power to transform the organization. If we were cynical, we might say that many CSR activities are nothing more than a public relations initiative.
What excites us is sustainability as strategy. By dramatically reducing energy use -- electricity, natural gas and fuel -- companies not only cut costs, but mitigate risk against rising energy prices, and raise revenue from new products and services
Management literature has shown that the majority of change initiatives fail. But sustainability engages the hearts, minds and motivation of employees and suppliers and can become a truly transformative driver. It can drive innovation and create new business value. And tip the balance to ensure success of the change initiative.
When looking at sustainability as strategy you ask fundamentally different questions than looking at sustainability in the framework of CSR. The former focuses business performance, organizational transformation -- looking at roles, incentives, re-engineering operational processes, and creating change through the whole supply chain -- while the latter focuses on reporting.
And so we believe that environmentalism can save business, as the more powerful engagement tool that business has at its disposal to drive innovation."
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