Sustainable Development: BPIR Management Brief - Volume 4, Issue 10

BPIR Management Brief - Volume 4, Issue 10
Sustainable Development
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The BPIR Improvement Cycle
• Identify/Select an Area for Improvement
• Measure Performance
• Benchmark Performance
• Identify a Relevant Improvement Approach or Strategy
• Learn How to Implement
• Identify Best Practice Organisations
• Research Further Information
• Implement a Best Practice Approach
• Review and Calibrate

Welcome to Volume 4, Issue 10, of the BPIR.com Management Brief series
BPIR.com Management Briefs provide best practices, innovative ideas and research data on topics and tools that will help
you to stay up-to-date on the latest international business trends and practices. Most of the topics for the Management
Briefs are chosen by our members, who submit their suggestions through the members’ Research Request Service. Read
and absorb, and then pass on to your staff and/or colleagues so they can do the same.
Sustainable Development: The Definition
At a global level, sustainability may be defined as meeting the needs of the present generation without
compromising the ability of future generations to meet their needs.[1] Sustainability at the level of individual
businesses may be defined as seeking to find a balance between financial profitability, sustainable economic
development, and social responsibility.
The Stage
Sustainable development has both national and local business implications. On a macro scale, sustainable
development encompasses global concerns and national economies while on a micro scale, it is associated
with the practices of individual businesses and people. Sustainable development practices can vary greatly
between organisations because of the specific context in which they operate. This creates a unique opportunity
for peer organisations to learn from each other’s experiences. Sustainable development can save money, create
a more equitable world, and lead to a healthier, more productive work force.
Authors: Neil Crawford, BPIR.com Limited
Researcher Assistance: Kevin McKenna, Centre for Organisational Excellence Research
© BPIR.com Limited, www.BPIR.com, the essential resource for benchmarking and best practices 1
Expert Opinion four in order to secure a sustainable future. To achieve
this, “radical innovation” practices would be needed, for
Over the last 20 years, there has been a growing example:
realisation that the current models of economic and social
• Developing new processes that have less impact
development are unsustainable. The loss of biodiversity,
upon the environment;
created by felling rainforests, over-fishing, and negative
consumption patterns, is having a negative impact on our • Creating new products that are better for—or
environment and our climate. In reality, our way of life is improve—the environment;
placing an increasing burden on the planet. The Sustainable
• Formulating improved business processes
Development Unit (SDU) of the UK Department for
that incorporate social and environmental
Environment, Food and Rural Affairs (DEFRA) believes
considerations;
that a decisive move toward more sustainable development
is urgently needed. Not only is it the right thing to do – it • Inventing totally new industries that are
is also in our long-term collective best interest. In the UK, devoted to improving environmental and social
the following key areas relating to sustainability have been conditions.
prioritised for immediate action: Since sustainability practices need to be adapted to fit
• Sustainable consumption and production; situations affecting various industries, locations, and cultures
that are subject to unique and evolving environmental and
• Climate change and energy;
social pressures, there is a need for great flexibility in their
• Natural resource protection and environmental implementation. A high degree of customisation, time,
enhancement; and careful planning is required to develop sustainability
strategies. Figure 1, see below, adapted from Placet
• Sustainable communities.[2]
and colleagues, depicts three interrelated and mutually
supporting key elements of sustainable development:
Integrated Sustainable Development

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Sustainable development initiatives are much more effective ��
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when taking in a wide spectrum of issues and treating them

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as an integrated whole. Placet and colleagues, from the ��
Energy Policy and Planning Group at the Pacific Northwest

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National Laboratory in the United States, note [3] that ��

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effective sustainable development involves an integrated ��
approach to:
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1. Environmental stewardship;
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2. Social responsibility; and � ��
3. Economic prosperity.
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Each of these elements is closely related to the well-being ��

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of organisations, and of society as a whole. The formation
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of an effective sustainability-focused business strategy

requires each element to interrelate and support the
Figure 1: Three Elements of
others. Alarmingly, researchers have estimated that if the Sustainable Development
per-capita resource consumption rates currently found in
the developed world were extrapolated to the developing Unified Energy Strategy Brings Savings
world, an equivalent of three Earths would be required to
Andrew Bray, the European head of Johnson Controls (a
support the projected rate of resource consumption. [4] This,
specialist energy management organisation), observes [6]
of course, is not possible, and has led those advocating
that many organisations are often not aware of the full
sustainability to estimate [5] that resource consumption
impact of price increases upon their operations, as they do
in all industries must decrease by at least a factor of
not have a unified energy strategy. And because they lack
2 © BPIR.com Limited, www.BPIR.com, the essential resource for benchmarking and best practices
accurate trend data, there is often confusion about where Management of World Energy Sources
energy savings can actually be made. This is compounded
José Goldemberg [8], an author and statesman who was
by the fact that the responsibility for energy management
honoured by Time magazine as being one of the “Heroes
is commonly split between the purchasing, finance, and
of the Environment,” cites the chief economist of the
health and safety departments. However, the following
International Energy Agency (IEA) Fatih Birol as saying
organisations, all based in the UK, have made significant
that, “on its current course, the future global energy
efforts towards sustainability:
situation will remain dirty, vulnerable, and expensive.” [9]
• HSBC, the second largest bank in the world,
Figure 2, see below, adapted from Goldemberg, depicts
decided to become carbon neutral in 2004, and
current world energy sources. It shows that exhaustible
has subsequently invested £650,000 towards
fossil fuels represent 80.1 per cent of the current world
climate-change research;
energy supply, nuclear energy 6.3 per cent, and renewables
• Dow Chemicals has reduced energy consumption 13.6 per cent. It should be noted that a large part (8.5 per
per unit of production by 21 per cent since 1994, cent) of the renewable component comprises traditional
producing cumulative savings of £1.6 billion; biomass, which is used inefficiently and in highly polluting
• Chemical group BASF, through the adoption of ways, often leading to deforestation.
energy-efficiency measures, reduced annual costs
at one of its sites by £340 million. ��
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Stable Economic Growth is a Precursor ��
for Sustainable Development

Stable levels of economic growth have been recognised
as an important precursor for sustainable development.
Joachim Spangenberg, vice-president of the Sustainable
Europe Research Institute in Vienna, Austria, writes [7] that
the UK government characterised sustainable development Figure 2: Overview of Global Energy Sources
as being directed towards the achievement of four main
objectives: At the current rates of use, the known reserves of oil are
1. Social progress that recognises the needs of expected to last around 41 years, natural gas 64 years and
everyone; coal 155 years. In order to meet our perceived future needs,
sustainable energy systems must comprise four important
2. Effective environmental protection; components, i.e.:
3. Prudent use of natural resources; and, • Physical energy supplies – through securing
4. Maintenance of high and stable levels of adequate supplies with an extended life to meet
economic growth and employment. future energy needs;
To achieve sustainability at a given rate of economic • Environmental management – related to the use
growth, government policies are required that: of our present energy supplies at local, regional,
and global levels, including addressing global
• Seek to improve resource productivity through warming and catastrophic climate change;
efficiency standards;
• Geopolitical risk management – related to
• Provide economic incentives; and security risks and possible conflicts associated
• Encourage innovation. with escalating competition for unevenly
distributed energy resources;
Spangenberg believes that it is important to carefully limit
the increases in production per capita in order to achieve • Equity of access to energy (a global humanitarian
economic sustainability. (See Spangenberg’s formula issue). The sufficient growth of energy supplies
for economic growth, which has been recorded in the for meeting human needs is a key element of
Measures section of this Management Brief, page 11.) sustainability goals.
With regard to the better management of the world’s Measures and Management of
energy resources, the “Stern Review of the Economics of
Sustainability: Triple Bottom Line
Climate Change” [10] points out that effective disincentives
to the burning of fossil fuels are needed. It estimates that A feature article in the June 2006 Business Credit Journal
that pricing carbon at US$100 per ton would go a long described a sustainable business as an organisation that:
way toward reducing the deforestation of tropical forests,
• Simultaneously enhances natural, social, and
which contributes approximately 15 per cent of all carbon
economic capital;
emissions. By assigning a price to the carbon stored in
forests, i.e. approximately 100 tons of carbon per hectare, • Assumes product stewardship by enabling
a further impetus is created to reduce carbon emissions into customers to return products at the end of their
the atmosphere. life for re-manufacturing into new generation
products;
With the rising price of oil, and the probability that the
most easily accessible fossil fuel reserves are dwindling, • Provides tangible social benefits to employees,
there is a great incentive to look for alternative solutions, customers, suppliers, vendors, and the local
the most likely of which are renewable sources such as community;
hydroelectric, biomass, wind, solar, geothermal, and
• Improves its ability to use resources efficiently,
marine tidal. Other options, such as, (a) synthetic fuels
closes material cycles, uses renewable
from coal, (b) biomass refineries for the production of a
energy, and practises green procurement (i.e.
wide variety of fuels, and (c) carbon capture and storage,
procurement policies that seek to provide high
will also benefit from higher oil prices. However, each of
quality, while continuously reducing destructive
these options poses additional environmental problems.
environmental and social impacts);
The main danger is that if developing countries simply
follow the energy trajectory of those countries that are • Incorporates value over the long term, rather than
already developed, the course correction needed to ensure seeking unsustainable short-term results;
a sustainable future for the world’s energy supplies will not • Measures, reports, and operates using
be possible. environmental, social, and financial performance
criteria i.e. using “triple bottom line”
methodologies. [12]
Biofuels and Food Supplies
The impact on net food producers and consumers in low-
income countries associated with the anticipated large- Triple Bottom Line and Business
scale global expansion of biofuels production presents Sustainability
serious challenges for food policy planners. It also raises
questions as to whether sustainable development targets Greater stakeholder activism, along with increased
can be reached. global production and trading, has led to an increasingly
complex management environment. Organisations are
Rosamond Naylor director of Stanford University’s developing an increasing interest in sustainability, which
programme on food security and the environment, states is leading them to focus upon their “triple bottom line”
that “growth in biofuels production capacity offers many (i.e. the balance of economic, social, and environmental
promises, and many threats, concerning the future course of performance factors).
sustainable development. The design and implementation
of sustainability audits is critical as the biofuels Dr. Barry Colbert and Dr. Elizabeth Kurucz, senior partners
industry develops, with clear metrics for evaluating the with Stakeholder Research Associates from Ontario,
environmental and social consequences of biofuels and Canada, write that changing expectations of society have
feedstock production, and for ensuring that management brought new challenges to business leaders. Reportedly,
[13]
and governance practices are compatible with pre- 68 per cent of the top 250 global companies on the Fortune
determined sustainability goals. In defence of the world’s 500 list have embraced triple bottom line (TBL) public
poorest populations, it is urgent that the ripple effects of reporting. They have also sought international honours
crop-based biofuels on food security and the environmental such as those associated with the Dow Jones Sustainability
be understood soon and considered carefully in the design Index, an award given to the world’s most sustainable
of development policies and investments.” [11] organisations. TBL reporting may offer a useful framework
for rethinking business operations. The authors conducted ISO 14001 Standard for Environmental
extensive case studies using three Canadian companies, and
Management Systems
discovered that each had conceptualised TBL according to
the business environment in which they operated. The Joel Makower, the CEO of Greener World Media in the
following three separate views of sustainability were United States, states that the growth in Environmental
reported: Management Systems (EMS) represents an indicator
of the adoption of environmental responsibility by
1. A balanced operational view, in which the
companies worldwide. [14] The International Organization
primary objective was to make a reasonable
for Standardization ISO 14001 standard for EMS provides
profit, while managing the constraints imposed
a universal methodology with which organisations can
by stakeholders and thereby sustaining the
monitor their environmental performance. Compliance
business;
with ISO 14001 provides a universally understood system
2. An integrated operational view, which built for addressing environmental impacts. However, at an
upon sustainable competitive advantage, by international level, certification varies widely, with Japan
integrating synergistically with the interests and China leading the world. Figure 4, see below, adapted
of the key organisational stakeholders (i.e., from Makower, depicts the top ten countries that achieved
employees, customers, investors, communities, ISO14001 certification in 2006.
and suppliers);
3. An integrated strategic view of business

sustainability, in which the organisation’s ��
stakeholder integration model was leveraged at ��
a global level. New ventures sought out fresh ��
markets and these simultaneously remedied ��
global problems, while making a profit in the ��

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process. Figure 3, see below, adapted from
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Colbert and Kurucz, highlights each of the three
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distinctive viewpoints. ��
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Figure 4: Top Ten Countries Achieving

ISO 14001 Certification, 2006
Intent 2. Balanced Operational 2. Integrated Operational 3. Integrated Strategic
Sustainability Objective Maximise organisational Simultaneous value-creation for Leverage integrated stakeholder
value, subject to stakeholder all organisational stakeholders view to create organisational value,
constraints and global society value
Sustainability Focus • Current operations • Current operations • Organisation as economic entity

• Licence to operate • Industry competitive advantage • Corporate brand
• Local stakeholder relationships • Organisation self-image • Global human welfare
Sustainability Goal Mitigate business risks by Build sustainable competitive Reorient business growth by
negotiating trade-offs advantage by leveraging broadening contextual and
complementary aspects capability concepts
Figure 3: Three Conceptual Positions Associated with Triple Bottom Line Reporting
Energy Efficient Buildings • Making products that are a delight to own; and,
According to DEFRA, new buildings that have been built • Calculating the lifecycle costs of products. A
to current industry standards are 40 per cent more energy fundamental component for the success of SRD is
efficient than those built 5 years ago. In addition, in order to for governments to encourage and enable lifecycle
spread best practices further a-field, sustainable construction costing, so that industry players and consumers
strategies for both the domestic and commercial sectors are understand the true cost of their actions.
being reviewed. Bill Watts, a senior partner at British building
services engineering firm Max Fordham, states that there has
been a boom in eco-friendly architecture in recent years. [6] Renewable Energy for Hospitals
Watts believes that proposed European Union (EU) directives As hospitals have such high energy demands, renewable
relating to the energy performance of buildings will have a energy sources often offer attractive and cost-effective
major impact on how firms treat energy management. The options. [16] The National Health Service in the UK reportedly
directive requires all buildings in the EU to be ranked in terms emits—from energy use alone—1 million tonnes of carbon
of their energy efficiency. According to Watts, this will have per annum. A lack of disposable income for hospitals and
an impact on property owners, because any stock labelled as other public sector organisations makes it difficult for them
having poor energy efficiency may lose value. It is interesting to fund renewable energy systems. However, this lack
that it is already possible for organisations to become self- of funding can be offset by using Renewable Obligation
sufficient in energy usage. As an example, the UK-based Certificates (ROC). Legislation enacted in the UK requires
Renewable Energy Systems has redesigned its headquarters electricity suppliers to provide a portion of their sales from
to maximise energy efficiency, and is completely powered renewable energy sources, and renewable obligation orders
by wind and solar energy, which are captured and converted are issued annually that detail the level of obligation required
on site. Biofuels are also grown in the fields surrounding the by suppliers along with the “buy-out” price. ROCs, which
Renewable Energy Systems buildings. are held in a register as electronic certificates, are issued for
each megawatt-hour of eligible renewable output. Suppliers
meet their obligations by presenting ROCs. Where suppliers
Sustainable Responsible Design do not have enough of these to cover their obligation, they
According to the Design Wales (UK) definition, Sustainable must make a payment into the buy-out fund. (ROCs may be
Responsible Design (SRD) should follow a holistic and also sold entirely separately from the electricity produced.)
multi-stakeholder approach, taking into account all key Once on-site generation has been established, hospitals can
environmental, social, and economic impacts throughout meet some or all of their energy needs through renewables,
the lifecycle of products and packages, without unduly and reinvest the money acquired from the sale of their
compromising other criteria such as performance, aesthetics, ROCs. Moving to renewables can also assist hospitals to
function, quality, and cost. Frank O’Connor and Iain Cox of make carbon savings for the local community. It is expected
Design Wales believe that as supply chain pressures, market that in addition to the exemption from the climate change
demands, and legislation push SRD to the top of the agenda, levy for electricity from renewables, the funds derived
it will become increasingly important to organisations from the sale of ROCs will provide £1 billion-worth of
worldwide. [15] SRD involves far more than products, processes, support per year by 2010. This will enable the government
and services. It encompasses all aspects of an organisation, to provide financial support towards the development of
and requires all stakeholders to carefully examine their beliefs renewable energy technologies. [17]
and values. SRD includes the following aspects:
• Choice of materials;
Healthy and Productive Working
• Employing appropriate manufacturing Environments
processes (i.e. those that have minimum adverse
environmental impact and minimise energy use); Theddi Chappell, CEO of Sustainable Values Inc. in
the United States, believes that the framework for
• Designing products for life, by balancing establishing value is changing to include factors that are
functionality, comfort, durability, style, and aesthetics; not only economic, but also social and environmental. [18]
• Supporting local economies by providing quality Investors increasingly balance longer-term environmental
skilled employment; and social costs against solely bottom-line results. They
weigh up the use of products and practices that either • 90% felt that governments should lead the
deplete or destroy environmental resources against necessary changes;
savings from reduced water and energy consumption,
• 70% believed that individuals were the most
and the potential for a healthier work environment and
effective agents for urgent change, and 47%
increased worker productivity. This leads to the need to
believed that business was the appropriate vehicle
consider complex issues such as risk assessment and the
for change. [19]
enhanced marketability of a particular building, product
or company, because of its association with environmental
responsibility. The following significant developments in
Sustainability Reporting –
relation to building standards have been recently created:
UK and Australian Disclosures
• Green building standards and green building councils
have been created in 17 countries worldwide, The UK’s Chartered Institute of Management Accountants
including the LEED (Leadership in Energy and surveyed corporate sustainability reporting in the UK and
Environmental Design) and Green Globes rating Australia. The external reports of 100 large companies
systems in the United States and Canada; from both countries were examined with performance-
related disclosures being made by the following numbers
• The United Nations Environment Programme of organisations:
was established as a worldwide initiative to
monitor the environmental impact of the building 1. Commitment to sustainability-related
and construction industries, as well as provide performance measurement or improvement:
guidelines concerning environmental issues, 65 Australia / 88 UK;
products, and practices; 2. Quantified measures of performance (e.g. tonnes
• In May 2006, the US Conference of Mayors of carbon dioxide): 29 Australia / 77 UK;
resolved that all city buildings should be carbon- 3. Identification of specified targets:
neutral by 2030; Australia / 59 UK;
• The provision of energy tax credits by a growing 4. Performance against these targets: 12 Australia / 43 UK;
number of states for the use of energy-efficient
practices and systems. 5. Future performance targets: 15 Australia / 46 UK;
6. Acknowledgment of measures used within a

management system: 23 Australia / 33 UK;
Survey and Research Data 7. Identification of social and environmental
performance issues that influence decision making
or changes in processes: 15 Australia / 32 UK. [20]
Sustainable Development –
University Students’ Viewpoints
In 2006, the Universities and Colleges Admissions Service Sustainable Business and Green Issues
(UCAS) in the United Kingdom surveyed 54,240 people Two 2007 surveys concerning sustainable development,
who were applying for higher education. The objective carried out by First Conference Ltd. in the UK, reported that:
was to research the opinions of potential future leaders
about the challenges of sustainable development. • 59% of 271 supply chain executives ranked green
issues as important or very important to their
• 91% believed that the effects of climate change companies’ strategies;
would affect them personally, and anticipated by
their early 40s to be living in a world that was • 98% of the 188 procurement professionals believed
undergoing environmental stress, with shortages, green procurement will continue to expand, despite
an increasing gap between rich and poor, and the fact that only 51% were willing to pay a
wars being fought over access to water; premium for eco-friendly products;
• 85% thought that survival into the 22nd century • 55% of 188 procurement professionals indicated
was possible with changed lifestyles; that green products or services represented less
than 10% of their current sourcing. [21]
Sustainable Business Fosters Innovation involvement (64%); corporate giving to worthy
causes (55%); and environmental sustainability/
In a 2007 survey by Siemens and McGraw-Hill
climate change (52%). [23]
Construction concerning sustainable business practices
in the US, 84% of respondents at the CFO or CEO level
indicated that they were very conscious of using green or
Sustainable Business – Environmental
sustainable practices when considering new facilities, and
believed that green construction was important to their Products Preferred
organisation’s best interests for economic reasons, market In a 2005 Steelcase Workplace Index Survey concerning
differentiation, and for competitive advantage. Rising U.S. sustainable business practices, more than half of the
energy costs were identified as a fundamental driver respondents believed that environmental and sustainability
of green building activities. Government and internal issues were a “high priority” for their organisations.
management were also strong drivers of sustainable
activities. Other findings included: • 74% reported that their organisation “always”
or “often” took steps to improve environmental
• 63% of CEOs recognised financial benefits from standards, e.g. using less paper, recycling, and
green building, and 67% recognised specific shutting off lights and other electrical devices
operating-cost benefits; when not in use;
• 60% of CFOs recognised the market • 54% said their company purchased recyclable or
differentiation that sustainability activities and sustainable products and furniture;
green building provided (more than half of other
respondents also believed this was a benefit); • 77% under the age of 55 preferred employers
to purchase environmental products, while
• 57% believed that sustainable methodologies 50% over the age of 55 preferred employers to
fostered innovation within their organisations. [22] purchase environmental products;
• 61% were more likely to buy an environmentally

Sustainable Development and Business friendly product even if it cost more than another
product;
Opportunities
• 95% would be more likely to buy a product with
In 2007, the McKinsey Quarterly conducted a survey covering environmental attributes when the price remained
sustainable development by multi-national corporations the same. [24]
(MNC) based in the United States. The following responses
were received from 198 medium/large MNCs:
• 46% of the executives indicated that corporate Example Cases

citizenship and sustainability were a potential
major source of business opportunities; Valuable lessons can be learned from the following
organisations:
• 66% believed that corporate citizenship and
sustainability issues were of growing importance
Co-operative Financial Services (CFS), UK
for their business;
Environmental design brings energy savings
• 92% cited “enhancing corporate reputation and
brand” as extremely important; 95% of the energy used by Co-operative Financial Services
(CFS) came from renewable sources. CFS had signed
• The three greatest challenges currently facing a long-term contract (worth £4m) with a wind power
corporate citizenship programmes were: provider to supply energy from six specially constructed
measuring results (75%); coping with limited wind turbines. Energy costs were 10% below market
financial and staffing resources (58%); and value. In addition, the façade of the CFS 400-ft service
aligning with business objectives (57%); tower in Manchester was covered with 7,000 solar panels.
• The following top three activities were identified Swiss Re demonstrated how office design and energy
as the main focus of citizenship and sustainability conservation could dovetail with the £130m construction
initiatives: community and stakeholder of its London headquarters. The building’s aerodynamic
structure creates a natural ventilation system, thus reducing IKEA International Group, Sweden
the need for conventional air conditioning. Other features Sustainable development embedded into
include a double-skinned, energy-efficient façade, light- business strategy
wells to maximise the penetration of natural light, and
movement and light sensors to minimise the unnecessary IKEA went through a series of costly environmental
use of artificial lighting. No parking spaces were provided conflicts with associated media coverage, and consequently
for cars. However, room was provided for bicycles, and experienced a severe drop in its market share. IKEA
showers and changing facilities provided for riders. [6] reported that this represented a “wake up call”, causing it
to see that environmental issues needed to play a central
role in its overall business strategy. IKEA then established
David Colwell Design (DCD), UK
and began to implement a sustainable purchasing policy.
Sustainable Responsible Design
This policy has continued over the years, leading to
Colwell, an internationally acclaimed furniture designer, more environmentally friendly materials being used in
passionately embraced sustainable design thinking and products. In addition, a code of conduct was introduced
practice. His designs made use of fast-grown ash wood, as a part of all IKEA agreements with its suppliers. IKEA
plus steam-bending techniques that offered production has now embedded sustainability considerations into its
efficiency, strength, and low energy use. A market was overall business strategy and its purchasing and sourcing
also provided for otherwise marginal forest products. Ash, activities. [26]
particularly well suited to UK conditions, is strongest
when fast-grown. It is renowned for its ability to absorb Amcor, Australia
atmospheric carbons, is relatively inexpensive and self- Triple Bottom Line (TBL) – business driven
seeding, has no sapwood, and therefore creates less
waste. Colwell’s products are sustainable and responsible, Since Amcor traditionally reported on environmental
having increased performance, functionality, and quality. and social issues in its financial reports, TBL was not an
Sustainable Responsible Design (SRD) was seen to offer an accounting-driven exercise for the company, but business-
opportunity for developing new products and technologies driven. Amcor believed that without TBL, it would have
that could potentially revive the manufacturing sector. been less successful commercially. Amcor was an active
Colwell believed that with the right commitment and true member of the World Business Council for Sustainable
lifecycle costing, SRD would be entirely possible. [15] Development (WBCSD) and its managers attended
WBCSD conferences. They also partnered with Earthwatch,
with employees having the opportunity to participate in
Guayaki Sustainable Rainforest Products, USA
environmental programmes worldwide. TBL was seen as
Sustainable development - fair premium prices
a means of attracting good people, and thereby producing
Guayaki plans to market a South American rainforest better business results. Amcor was wary of regulations being
drink in the United States, which will create economic used for TBL because it believed that one size did not fit all.
opportunities via a sustainable market-driven restoration It believed rather that guidelines would be more effective in
project that protects the rainforest and the way of life allowing organisations to do what best suited them. [27]
of South American farmers. Sales in the US will help
support re-forestation, upgrades to housing and schools, Pizza Fusion, USA
and improved medical care. In order to provide native Sustainable business defines organisation
people with alternatives to destructive land use practices,
fair and premium prices are paid creating an incentive for Pizza Fusion shaped their whole business around
focusing on organic quality and sustainable land use. The sustainable products and practices. For example:
area farmed is an important biological corridor for jaguar • Buildings were LEED certified;
migration. Not only does Guayaki create a strong incentive
for people to leave the forest standing, but it also has • 98% of the food sold was organic;
several projects underway to replant native tree species in • Stores used eco-friendly packaging, employee
deforested areas. [25] uniforms, and paints;
• Compact fluorescent bulbs reduced energy

consumption;
• Countertops were constructed from 100%
Hubbard Foods Ltd, New Zealand
recycled detergent bottles;
TBL reporting seeks profit
• Store shelves were made from recycled panels
Hubbard believed that sustainability was both a moral
• Reclaimed wood was used to build tables and obligation and a financial investment. Accordingly, their
cutting boards; TBL report included the following targets:
• Interior walls used 95% recycled content and 1. Core Company:
were locally manufactured;
i To achieve 11% brand market share of
• Insulation was made from recycled blue jeans total cereals.
• Ceiling baffles comprised recycled composite 2. People:
board, and ceiling panels used 74% recycled
aluminium cans and 24% post-industrial metals; i To commit a minimum of $50,000 for staff
training per year;
• Bamboo veneer covered fixtures;
ii To reduce absenteeism to less than 8 days per
• Hybrid vehicles made deliveries; employee per year;
• It was also planned to use recycled glass bottles iii To donate 1% of net profit before tax in cash
to create flooring tiles. [28] to charitable/not-for-profit organisations.
3. Product:
JCPenney Co, USA
Sustainable business i To improve a minimum of two existing
cereals nutritionally per year, by reducing fat,
A key feature of JCPenney’s sustainability initiatives was saturated fat, sugar or sodium;
the investment of $75 million in Energy Management
System technology, lighting retrofits, and high-efficiency 4. Environment:
heating, ventilating and air-conditioning (HVAC) systems. i To improve the carbon dioxide profile per
The Energy Management System enabled third party kilogram of production;
monitoring and scheduling of equipment. Web-based
tools were provided, enabling managers to analyse energy ii To reduce energy usage per kilogram of
use and costs. A dashboard system was planned to enable production by 5%;
stores to benchmark their own energy use. Eco-friendly iii To qualify all recycling on site and target a
building features introduced included the use of: minimum of 5% improvement. [30]
• Local construction materials, thus minimising
transportation;
• Carpet made from 100% recycled materials;
• Ceiling tiles using recycled materials;
• LED lights for exterior signs;
• Occupancy sensors to control lighting;
• Low-volatile organic compound paints, adhesives

and sealants; and
• Low-consumption plumbing fixtures.
In 2006, 31,000 tonnes of greenhouse gas emissions were

eliminated, and total energy consumption was reduced
despite increases in store operating hours and square
footage. [29]
Measure and Evaluate investigated for their potential to reduce the amount of waste
sent to landfills. Leading organisations often set ambitious
Sustainable Development “zero-waste” goals, which attempt to virtually eliminate
waste bins by ensuring that waste is reused or recycled.
The following provide examples of sustainability-related
measurement systems: The following are examples of specific measures that
organisations may use to assess the impact of their
Carbon Neutral Assessment: The term “Carbon Neutral”
sustainability endeavours:
is a branded standard that has been established for voluntary
actions to address matters related to climate change. Product Waste: i.e. the quantity of product waste disposed
Carbon Neutral status can be applied to entire companies, of as a percentage of the total quantity of product produced
events, products, and services, and represents the point for a given period, or the total quantity of waste disposed
at which greenhouse gas emissions have been assessed, of for a given period, or the total time dedicated to waste
reduced where possible, and the remaining non-reducible disposal per period. Product waste may include by-
emissions offset through energy efficiency, high-quality products that are partly redeemable.
renewable energy or forestry projects. An independent
Waste Streams: i.e. the number of waste streams. This
auditing process is used to assess the application of the
measure is useful for the analysis of waste within an
Carbon Neutral standard by organisations. [6]
organisation. Before a policy to reduce overall waste
Sustainable Economic Growth: Sustainable growth is can be effective, all waste streams need to be identified.
described by the following formulae: It occurs when the As these streams are eventually reduced and “dammed”,
(change in the economy) / (resource use) is greater than the number of streams is reduced as an indicator of
the growth in the economy, and this is also greater than the progress. Waste streams can be found in any process, for
(change in the economy) / (workforce numbers) or d(Y/L) instance, handling losses, cleaning losses, process losses,
< dY < d(Y/R), where: Y = the size of an economy, dY storage, materials handling, pumping, treatment, and even
= growth in the economy, L = the number of employed management waste, associated with decision-cycle times
persons, Y/L = per capita production, R = resource use, and production delays.
and Y/R is the resource productivity of the economy. This
Cost of Waste, or Waste Disposal, or Handling: i.e. cost
measure provides a yardstick for measuring sustainability.
of waste or total waste handling/ treatment costs per quarter
If the inequality formula is found to be true then growth is
or year. This measure can be used to assess waste costs.
sustainable; if the formula is not true then current growth
The measure could be customised to assess many different
is not sustainable. [7]
types of waste, for example the cost of disposal, the cost of
Triple Bottom Line Reporting (TBL): TBL (or rejected materials, rework, in-process scrap, and returns.
Sustainability Reporting) measures and reports on
Supplier/Contractor Waste/Recycling Rate: i.e. the
business performance by focusing on three areas: financial
percentage of raw materials supplied with recycled content
profitability, environmental sustainability, and social
per year, or the amount and type of wastes generated
responsibility. TBL provides a framework for businesses
by suppliers during the previous period, or the number
to focus on multi-dimensional goals, and to comply with
of waste minimisation initiatives implemented by—or
social demands for greater business accountability and
in cooperation with—suppliers per year or during the
sustainable development.
previous period. This measure tracks the progress of
Product Waste Minimisation and Environmental suppliers (or supplier-related initiatives) in reducing waste
Release Levels: Greater environmental awareness is or in supplying more environmentally friendly products,
challenging organisations to re-examine their operational materials, and services.
processes, products, and services. For competitive reasons,
Utility and Fossil Fuel Consumption: i.e. the total cost
organisations strive to develop and provide products with
of utilities used per period, or the total quantity of energy
little environmental impact. They seek products that can
consumed from all sources within the manufacturing
be recycled, reused, or disposed of safely. Organisations
processes (in joules per unit of manufactured output), or the
need to be able to respond to these challenges quickly
ratio of the total energy or fuel consumption to the volume
and effectively, in order to remain competitive. Current
of total production and per employee, or the percentage
practices for minimising or eliminating waste involve a
of renewable and non-renewable raw materials turned
wide range of initiatives to make sure valuable materials
into product and scrap per quarter or year, or the level
are not squandered. In addition, organisational processes are
of raw materials and energy inputs per unit of production Environmental Compliance Performance – Punitive
per quarter or year. These measures provide the means for Actions: i.e. the number and type of environmentally-
assessing overall utility and energy use. related legal or regulatory actions brought against the
company during a previous period, or the number and
Product Design for Re-Use and Recycling, or Product
cost of environmentally-related penalties and judgements
Stewardship: i.e. the volume of recyclable or re-used
levied for regulatory or legislative non-compliance during
packaging as a percentage of total packaging content
a previous period. This measure provides an indication
used per quarter or year during the previous period, or
of an organisation’s environmental performance, and in
the number of product units taken back for recycling or
particular the number of actions or penalties resulting from
re-manufacture per quarter or year during previous period,
non-compliance
or the percentage of total product offering designed for
recycling or re-use per year versus previous period, or Environmental Initiatives – Success: i.e. cost savings due
the weight of packaging materials used per volume or to improved environmental management as a percentage
weight of product output. These measures quantify the of total sales costs plus savings. This measure provides
commitment of organisations to protect the environment. management with an indication of the cost effectiveness of
environmental initiatives.
Environmental Spending: i.e. the level of R&D
expenditure devoted to projects, activities or processes
with environmental significance during a given period, or
the expenditure on “clean” production technologies and
equipment as a percentage of total equipment costs during
a previous given period, or the percentage of company
annual sales revenue devoted to community and industry-
sponsored pollution prevention and environmental
protection programmes or activities during a previous
given period. This is a measure of the investment into,
and therefore commitment made toward, protecting the
environment.
Environmental Risk Level: i.e. the rating of environmental

risk (process or material). Organisations with a strong focus
on waste and environmental issues often rate such risk in
terms of the “worst case scenario” of environmental impact
of processes or materials. This can be used when assessing
the suitability of those under consideration for inclusion or
replacement. The rating should take account of all factors,
including potential clean-up costs, regulatory body fines
and re-compliance costs, time, reputation, disposal costs,
and re-training costs. All of these factors can be combined
to classify a process, material or activity with a risk level,
which can then be used in the decision-making process
when considering changes.
Environmental Risk – Total Potential Liability: i.e.

a rating of total potential environmental risk in terms
of cost (processes or material, or total of all risks). This
measurement can be used to track progress in reducing
the environmental impacts—or potential impacts—of
processes within an organisation. The rating should take
account of all factors, including clean-up costs, regulatory
body fines and re-compliance costs, time, reputation, and
re-training costs.
Self-Assessments
Self-assessments can be used to find out how effective
organisations are at implementing various strategies, tools
or techniques. Figure 5, see below, provides an example of
one of BPIR’s sustainability self-assessment tools.
We design our products to include the following criteria:
Programme for
Complete Partial
Environmental Statement Compliance in Seldom Never
Compliance Compliance
Place
Score 4 3 2 1 0
1 Minimum use of all materials

by quantity and number of
types
2 Minimum use of energy in

manufacture
3 Minimum consumption of
energy while in use
4 Minimum need for

packaging
5 Recyclable at the end of life
6 Measurement and
management of production
waste
7 Suppliers checked for

environmental performance
Sub-Totals
Total Points (Maximum Score = 28)
Recommendation – a score of less than 14 indicates that action should be taken immediately.
Figure 5: How Eco-friendly is Your Product Design? Find out now by completing the self-assessment (the full
self-assessment can be found in the Self-Assessment area of BPIR.com).
Summary longer-term environmental and social costs against solely
bottom-line results. They weigh up factors such as the use
It is in our collective interests—both locally and of products and practices that either deplete or destroy
internationally—to energetically embrace sustainable environmental resources, against savings accrued from
development initiatives. Individual organisations have reduced water and energy consumption, along with the
an important role to play in creating new sustainable potential for a healthier work environment and increased
products, processes, and industries. Sustainable worker productivity.
development initiatives require considerable flexibility in
their implementation, since each initiative is confronted
with a unique set of factors that are related to its specific
location, culture, and social demands. Such sustainable
development initiatives require that three key elements be
held in balance: economic prosperity, social responsibility,
and environmental stewardship.
Sustainable development should not be addressed in

isolation, and governments have a distinct role to play
in setting policies and incentives that drive appropriate
behaviour, and create the conditions for stable economic
growth. While some 80 per cent of the world’s energy
is currently derived from non-renewable fossil fuels,
the growth in biofuels production capacity offers many
promises, along with some challenges, towards the future
course of sustainable development.
Organisations increasingly use Triple Bottom Line

(TBL) reporting to communicate with their stakeholders.
TBL focuses specifically on economic, social, and
environmental performance. Each organisation tends to
approach TBL reporting in a manner relating specifically
to its own core business objectives. For example, some
organisations may take an operational viewpoint, and
hold to a primary objective of remaining profitable while
managing the constraints imposed by stakeholders. Others
may have an integrated conception of sustainability, in
which the interests of employees, customers, investors,
suppliers, and the local community are absorbed into the
purposes of the organisation. And still others may have a
global strategic perspective of sustainable development,
forming alliances and new ventures in the creation of novel
opportunities, while at the same time addressing societal
and human welfare needs.
Sustainable development principles have led to the design

and construction of energy efficient buildings, which are up
to 40 per cent more efficient than those built 5 years ago.
This has led to considerable energy savings, along with
other benefits. Sustainable responsible design of products
attempts to take into account all key environmental, social,
and economic impacts throughout the lifecycle of products,
without compromising performance, aesthetics, function,
quality or cost. Finally, investors increasingly balance
References
To access and read the articles and reports below go to the HTML Reference List for the Management Brief in the
BPIR.com members area.
1. Coghlan, J., (2007), It’s inevitable that CSR regulations will be enacted, so let’s be prepared
to account for sustainability, Financial Management, p 1, Chartered Institute of Management
Accountants, London.
2. Anonymous, (2008), www.sustainable-development.gov.uk, What is sustainable development?,

Department for Environment, Food and Rural Affairs (DEFRA), London.
3. Placet, M., Anderson, R., Fowler, K. M., (2005), Strategies for Sustainability, Research
Technology Management, Vol. 48, Iss. 5; pp 32-41, Industrial Research Institute, Inc., Arlington.
4. Holliday, C. and Pepper, J., (2001). Sustainability through the Market: Seven Keys to Success,
World Business Council for Sustainable Development, Geneva.
5. Lovins, L. H., Weizsäcker, E. von, and Lovins, A. B., (1997), The Factor Four, Earthscan, London.
6. Berens, C., (2006), Emission Statement, Financial Management, pp 12-16, Chartered Institute of
Management Accountants, London.
7. Spangenberg, J. H., (2004), A Great Step Further but Still More to Go, Environment, Vol. 46, Iss.
8; pp 42-46, Heldref Publications, Washington.
8. Goldemberg, J., (2007), Energy Choices Toward A Sustainable Future, Environment, Vol. 49, Iss
10; pp 7-18, Heldref Publications, Washington.
9. Anonymous, (11 March 2008), www.oecdobserver.org, Energy: Finding a New Gear, OECD
Observer, OECD, Paris.
10. Stern et al., (2007), Stern Review on the Economics of Climate Change, Cambridge University
Press, Cambridge.
11. Naylor, R. L., Liska, A. J., Burke, M. B., Falcon, W. P., (2007), The Ripple Effect: Biofuels,
Food Security, and the Environment, Environment, Vol. 49, Iss. 9; pp 31-44, Heldref Publications,
Washington.
12. Anonymous, (2007), Green Businesses: Building Value Over The Long Term, Business Credit,
Vol. 108, Iss. 6; pp 28-35, National Association of Credit Management, Columbia.
13. Colbert, B. A., Kurucz, E. C., (2007), Three Conceptions of Triple Bottom Line Business
Sustainability and the Role for HRM, HR. Human Resource Planning, Vol. 30, Iss. 1; pp 21-29,
Human Resource Planning Society, New York.
14. Makower, J., (5 March 2008), http://greenbiz.com, State of Green Business 2008, Greener World
Media, Inc. Oakland, California.
15. O’Connor, F., Cox, I., (2005), Sustainable Responsible Design: Insights from Wales (UK),
Design Management Review, Vol. 16, Iss. 3; pp 72-80, Design Management Institute, Boston
16. Anonymous, (2008), Renewed enthusiasm, HD. Foots Cray, Vol. 37, Iss. 4; pp 26-27, Wilmington
Publishing Ltd, Kent.
17. Anonymous, (25 February 2008), www.ofgem.gov.uk/, Renewables Obligation, OFGEM,
London.
18. Chappell, T. W., (2007), The Value of “GREEN”, Area Development Site and Facility Planning,
Vol. 42, Iss. 1, pp 18-23, Halcyon Business Publications, Inc., Westbury.
19. Macleod, M., (2007), Who takes the lead?, Director, Vol. 60, Iss. 8; pp 48-50, Institute of
Directors, London.
20. Adams, C., Frost, G., (2006), CSR Reporting, Financial Management, pp 34-36, Chartered
Institute of Management Accountants, London.
21. Gentry, C. R., (2007), Crystal-Ball Predictions, Chain Store Age, Vol. 83, Iss. 10; p 94, Lebhar-
Friedman, Inc., New York.
22. Anonymous, (2007), Study Confirms Trend to Sustainability, Chain Store Age, Vol. 83, Iss. 10l;
p 30, Lebhar-Friedman, Inc., New York.
23. Ali, A. J., (2007), Corporate Citizenship and Sustainable Development, Advances in
Competitiveness Research, Vol. 15, Iss. 1/2; pp 1-3, American Society for Competitiveness, Indiana.
24. Anonymous, (2005), Inbox, Office Solutions, Vol. 22, Iss. 2; pp 8-11, Quality Publishing, Inc., Mt.
Airy.
25. LeBel, M., (2008), Protecting Rainforest and Way of Life, In Business, Vol. 29, Iss. 5; pp 12-13,
J.G. Press Inc., Emmaus.
26. Reeve, T., Steinhausen, J., (2007), Sustainable suppliers, sustainable markets, CMA
Management, Vol. 81, Iss. 2; pp 30-33, Society of Management Accountants of Canada, Hamilton.
27. Rice, M., (2004), Bottoming Out, Australian CPA, Vol. 74, Iss. 8; pp 26-31, CPA Australia,
Melbourne.
28. Field, K., (2007), Down to Earth Pizza, Chain Store Age, Vol. 83, Iss. 13; pp 114-116, Lebhar-
29. Wilson, M., (2007), Reaching Higher, Chain Store Age, Vol. 83, Iss. 13; pp 70-71, Lebhar-
30. Anonymous, (2008, April, 4), www.hubbards.co.nz, Nourishing the Nation, 2007, Hubbard Foods
Ltd, Auckland.
The BPIR Management Brief is a monthly publication delivered as one of the many
membership benefits of the Business Performance Improvement Resource (BPIR).
To find out more about membership, email membership@bpir.com or visit
the homepage at www.bpir.com.
Issues of the BPIR Management Brief
• Activity Based Management

• Benchmarking
• Business Continuity Planning
• Business Excellence
• Call Centre Representatives
• Change Management
• Compensation Schemes
• Corporate Performance Management
• Customer Complaints Resolution
• Customer Knowledge Management
• Customer Loyalty
• Customer Market Segmentation
• Customer Order Management
• Customer Profitability Management
• Customer Satisfaction Surveys
• Customer Support and Service
• Diversity Planning
• Emotional Intelligence
• Employee Development
• Employee Motivation
• Employee Suggestion Schemes
• Ethical Business Practices
• Flexible Work Arrangements
• Knowledge Creation
• Leadership Development
• Lean Techniques
• Managing Innovation
• New Product Development - Innovation Strategy
• New Product Development Tools
• On the Job Training
• Performance Management
• Product Lifecycle Management
• Recruitment and Selection
• Relationship Management
• Succession Planning
• Total Quality Management
• Work and Life Balance
• Workplace Conflict
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BPIR Management Brief - Volume 4, Issue 10

• Identify/Select an Area for Improvement

• Identify a Relevant Improvement Approach or Strategy

• Learn How to Implement

• Identify Best Practice Organisations

• Research Further Information

• Implement a Best Practice Approach

• Review and Calibrate

Sustainable Development: The Definition

Authors: Neil Crawford, BPIR.com Limited

Researcher Assistance: Kevin McKenna, Centre for Organisational Excellence Research

Integrated Sustainable Development

when taking in a wide spectrum of issues and treating them

as an integrated whole. Placet and colleagues, from the ������������������������ ����������������������������

Energy Policy and Planning Group at the Pacific Northwest

National Laboratory in the United States, note [3] that �������������������������������������

Each of these elements is closely related to the well-being ������������� ��������������������������������������

of an effective sustainability-focused business strategy

for Sustainable Development

3. An integrated strategic view of business

markets and these simultaneously remedied ��� �����

global problems, while making a profit in the �������� �����

� ����� ������ ������ ������ ������

Figure 4: Top Ten Countries Achieving

Intent 2. Balanced Operational 2. Integrated Operational 3. Integrated Strategic

Sustainability Focus • Current operations • Current operations • Organisation as economic entity

6. Acknowledgment of measures used within a

• 61% were more likely to buy an environmentally

• 46% of the executives indicated that corporate Example Cases

• Compact fluorescent bulbs reduced energy

• Carpet made from 100% recycled materials;

• Ceiling tiles using recycled materials;

• LED lights for exterior signs;

• Occupancy sensors to control lighting;

• Low-volatile organic compound paints, adhesives

• Low-consumption plumbing fixtures.

In 2006, 31,000 tonnes of greenhouse gas emissions were

Environmental Risk Level: i.e. the rating of environmental

Environmental Risk – Total Potential Liability: i.e.

We design our products to include the following criteria:

1 Minimum use of all materials

2 Minimum use of energy in

4 Minimum need for

5 Recyclable at the end of life

7 Suppliers checked for

Total Points (Maximum Score = 28)

Sustainable development should not be addressed in

Organisations increasingly use Triple Bottom Line

Sustainable development principles have led to the design

2. Anonymous, (2008), www.sustainable-development.gov.uk, What is sustainable development?,

Issues of the BPIR Management Brief

• Activity Based Management

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