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Sustainability: Good for People, Good for Companies, Good for the Earth

March 10, 2015

 

The CSO at IKEA makes the case for 100% sustainability, not just because it is the right thing to do, but also because it is the profitable thing to do. 

 

“Why would you NOT want to have a positive influence on the world?” – Steve Howard, Chief Sustainability Officer (CSO) at IKEA. 

 

Key Info:

 

  • Paying attention to to the environment is necessary, because 3 billion people will join the global middle class by 2030, we are looking at a 6°C Global increase in temperature, and there are now 500 cities with a million people or more producing waste that affects air, land and water.

  • With IKEA, many other companies, including Google, Lego, Nike, Patagonia, Timberland, Marks & Spencer’s, are aiming for 100% sustainability, because they see it is as the route to growth, innovation and staying competitive.

  • Before working at IKEA Steve Howard set up an NGO called "The ClimaTe Group," worked on Forestry issues for the WWF, and development and agriculture issues for the UN.

Link to the 13-minute video: Steve Howard: Let's go all-in on selling sustainability 

 

Main Points: 

  • Sustainability has gone from a nice-to-do to a must-do.  Because it is right, and because it is the key road to growth and increased profitability.

  • A company’s target must be 100% sustainability, because when the goal is 90% everyone in the company finds a reason to be in that excluded 10%.

  • People care about sustainability.  IKEA's Customer-Centric research has shown that a vast majority of people from all over the word care about sustainability, AND expect businesses to help, but are disappointed.

  • The Higher Purpose of achieving 100% sustainability is now compatible with profitable business interests.

Actions IKEA has taken to achieve these goals:

 

  • stopped selling incandescent and halogen light bulbs, and sells only lower energy LED lights.

  • started the Better Cotton Initiative, with the goal of creating 100% sustainable cotton (which uses lots of water, pesticides, and labor the way it has been traditionally grown).

  • certified 35 million hectares of sustainable forests for the wood in their furniture.

  • installed 300,000 solar panels so far, and 14 wind farms to generate electricity. After 7 years their electricity will be free.

  • has 80 auditors in its factories around the world to insure safe healthy working conditions and to protect the rights of children.

  • launched a women’s network with the goal of 50-50 equality in female leadership and equal pay.

 

 

The Point:  Whether you believe in Climate Change, or not, is beside the point. Creating 100% sustainable companies will help make the world a nicer, cleaner, healthier place, and a better place to do business in. 

 

Is achieving sustainability a marketing tactic? Yes, of course it is. Therefore a company as successful as IKEA must have deemed it a profitable move and well within their risk assessment. If it was not profitable, if it was just another silly western trend, then why would they spend millions to make infrastructure changes, restructure their management and hire a CSO and make 100% sustainability their target by 2020? 

 

This is a case where what is right for people and for the planet is also right for business. Is it perfect?  No.  But it is a major step in the right direction.  It shows customer centricity, leadership, and responsibility.

        

 

 

Necessary steps in making a company 100% Sustainable: 

 

  • Be decisive in directing your company and its direction toward sustainability. (In other words: Companies that wait to see how it goes will loose market share.)

  • Businesses act on and manage what they can measure, so measure what you care about. If a company is not measuring its impact on the population it serves, it communicates that they don’t care. 

  • Sustainable products are no longer inferior in quality as they once were, we now have choices.

  • Businesses must take FULL RESPONSIBILITY for the conduct of their supply chain to protect children and human rights.

  • The gender gap must be closed. Women are the key to health and prosperity. There must be gender equality in management and pay. 

  • Make sustainability affordable for the many people, not just a luxury for the rich.

  • Your sustainable business model must be TRANSPARENT*, set a clear direction, have a dialogue with the right partners and choose to lead on the issues that truly count.

Notes:

 

* TRANSPARENCY is ever more important because all it takes is one customer with a smart phone to check a label’s claim and Tweet falsehoods to thousands of people. There are costs to not being transparent, lies will be found out. (See Design Ethics with a Splash of Bourbon)

 

 

 

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