The Southeast Michigan Sustainable Business Forum hosted its annual Green Meets Black Conference earlier this month at University of Michigan’s Erb Institute for Global Sustainable Enterprise in Ann Arbor.
In his keynote presentation, Robert W. Kuhn, of Kuhn Associates, LLC addressed “How Sustainable Business Practices Enhance Profitability and Attract Capital.”
“The unsung thing is that we’re going to start experiencing supply constraints that generations before have never seen,” said Kuhn. “This is something that those that work with business people know is a real challenge. … Sustainability is also going to be significant concern for talent recruiting and retention. If you’re not taking these steps, you’re also going to be making a big mistake in terms of your ability to keep people on board and engaged.”
Kuhn suggested an alternate approach to measuring sustainability focused more on outputs than inputs, prioritizing how organizations impact various areas of concern. Such an approach can be overwhelming: Between the general categories of Places, People, Processes and Products there are 24 potential impact areas that organizations would find material to their interests. The most popularly used sustainability metric for large organizations, greenhouse gas emissions, is just one of those buckets. Among the less obvious, there are emerging concerns for electronic waste, human trafficking, conflict minerals, traceability and transparency. Most organizations don’t even know the heat map of toxics in their organization, one of the more obvious concerns.
This comes at a time when there is a growing recognition that sustainability and shareholder value are inextricably linked.
“Sustainability can take a back seat to survivability,” he said. “Yet capital is going to flow to the leaders.”
On a subsequent panel moderated by Kuhn, Luke Contos of Chassix echoed that sentiment, “We’re trying to bring sustainability to people who have gone through bankruptcy, not once, but twice in recent years. It’s been hand to mouth for a while, but investors want to know that we’re sustainable, customers want to know that we’re sustainable.”
Some additional thoughts from that panel, which included representatives from Chrysler and Bosch:
- Chrysler has found that the areas where its suppliers have graded themselves the lowest on sustainability is in communicating these requirements to their own suppliers.
- Sustainability is a process, not a buzzword.
- Say sustainability too many times you’re left wing, but if you say “seven forms of waste”…
- Sustainability is part of everyone’s job.
- If it does not improve performance than it is not sustainable.
Similarly, a panel on sustainable investing was asked what investors considered to be a sustainable business:
- Sustainability should be a dimension of every business.
- There are advantages for a sustainable business over those that are less so.
- Still prioritize performance over sustainability. Utilities, for instance, are not measured on efficiency, but on performance.
“We learned during the downtown that incumbents are going to play a role in this sector,” said panelist George Caravias of Grid Logic. “You’re going to need their customers and their capital. During the boom we thought we’d be able to take them on. It was naive and the market for renewable energy crashed as a result. But we’ve seen this before with the internet. That sector came back after the boom with something that was much more sustainable.”
“We call that dumb money,” added Ryan Waddington of Huron River Ventures.
Caravias explained how entrepreneurs could potentially work with incumbent utilities to create a market channel for innovation. “The utilities are incentivizing people to screw in new light bulbs, so that’s what people are going to do. That’s the rules of the game. But if they’re going to incentivize something, why not your technology?”
Another panel offered some tips from recent Erb Institute alumni on how to promote sustainability within large organizations, a particular concern for many local firms where the sustainability coordinator is a relatively junior person in the organization.
- Recognize that senior leadership has Attention Deficit Disorder. Keep messages simple, brief and frequent.
- Don’t use jargon.
- Don’t get frustrated when a sustainability issue gets cancelled.
- Make sure you’re buying donuts for the right people. One recent Erb graduate suggested tracking who in your organization participates in volunteer activities and attends office lunch-and-learns or equivalent optional events. These will be your most likely advocates for sustainability initiatives, regardless of their role in the organization.