Introduction to Sustainable Development
Introduction
The surest way for any business to drive itself out of profitability and existence is to ignore the need for sustainable business practices. Globalization and global warming have drastically influenced how businesses operate. Global warming scientists have warned for the last two and a half decades that we are slowly destroying our planet, the only place where we can have life, as we know it.
Globalization on the other hand has revealed that actions of a business entity half way across the world carry implications for others on the opposite side. We are all on the same boat. Hence, when someone rocks it, we are all in danger.
Need for Sustainable Development
Sustainable business practices assure us of our survival. This transcends just the survival of the business. It actually refers to the survival of the human race. When all businesses in the world involve themselves in sustainable business practices, they assure the continued survival of our world and assure, “long range benefits” (Maromonte, 1998, p.7).
It is extremely crucial to undertake these actions in concert with the entire business community. The goal of this is to ensure that impact of the cooperation is large enough to make a real difference in solving our myriad problems. If we ignore sustainability and pursue profits without regard to the consequences of our actions, we will leave a world that will not be suitable for human habitation. Our children will blame us forever.
Scope
In this document, we will limit ourselves to the elements of sustainable development that concern our business. Otherwise, sustainability broadly covers all initiatives that aim at ensuring that present actions do not negatively affect the lives of those who will be present tomorrow.
This means that all actions take into account future effects whether they relate directly to our current operations, or not. In this business case, the issues we will consider include the role of energy in our sustainability planning, opportunities available for sustainable business operations and the strategy to employ in attaining this goal.
Justification for Sustainable Development
There are four key reasons why every business needs to consider sustainability in its operations. The first reason is the universal responsibility all human beings have in taking care of the planet. We are stuck together in the planet and as far as we know, this is the only place in the entire universe that can sustain human life.
We do not have an escape hatch that will provide us with a means of escaping the consequences of unsustainable practices. Therefore, every person has a responsibility to contribute towards the global effort to ensure our planet remains habitable. This finds expression both at a personal level and at institutional level. As global citizens, we must take our place in this war and contribute towards the future of the planet.
The global challenge of sustainability clearly matches with what Dalic (2007) describes as “the convergence of cultures” (p.4). If we ignore it, then we will be putting our whole civilization under threat. Consequently, we will not be able to continue doing business. Therefore, it is in our interest to move rapidly towards sustainable business practices.
The second reason why we must move rapidly towards sustainable business practices is to fulfill regulatory requirements as a business. So far, regulatory bodies have concentrated on environmental pollution relating to practices that have an impact in the immediate environment. Every indication now shows that it is only a matter of time before governments start to take the carbon footprints of every institution seriously.
There is a lot of lobbying going on spearheaded by conservation groups. It makes sense to start moving towards the path of sustainable business practices before regulators eventually come to force us.
It will be more cost effective for us to work on our own plan than working with a regulator’s plans. This may require us to work with like-minded organizations in our industry to develop some form of self-regulation in the issues of sustainable business.
Thirdly, it is risky for any business to remain uninvolved in the battle towards environmental sustainability. Many of our clients and business associates have become conscious of environmental issues. They will demand more from us in the near future towards environmental sustainability.
A green organization has a better chance of surviving in the current business climate since stakeholders feel that the business takes sustainability issues seriously. If we remain complacent in sustainability issues, then we risk losing business to greener organizations. Therefore, neglecting sustainability is tantamount to planning for the failure of the organization.
The fourth reason why it is beneficial for us to take sustainability seriously is that it holds the potential of expanding our business and in some cases to help us reduce our operational costs.
If we brand ourselves, as a green organization, then we will be able to attract new business from clients who are keen to trade with green organizations. We will reduce our carbon footprint and in the process, we will be able to please clients who look for this characteristic.
SWOT Analysis
Through a SWOT analysis, we will be able to determine where our growth opportunities lie, thereby expanding our chances at remaining profitable as we pursue sustainable business practices. It brings to the fore our business’ “critical success and its limiting factors” (Morden, 2007, p.6)
Strengths
Location
The location of our facility is strategic since it allows easy access to services. As Levinson et al., (2007) state, “location is important in marketing”.
Strong brand
We have a good reputation among our clients. Our clients look at us with admiration and seek to retain our services.
Strong financial position
Our organization is in good financial standing. This positions us nicely to take advantage of whatever opportunities that arise
Weaknesses
Slow response to sustainability issues
Our response to sustainability issues has been slow. We are not far behind the industry but we could have been much further down along the path.
Slow uptake of new ideas
Our success in previous years seems to have damped our ability to take up and pursue new ideas quickly. There is sense of complacency settling in because of the strong performance the organization has displayed in the last few years.
Opportunities
Attracting green clients
We have the capacity to become a green organization. In the process, we will be able to attract clients interested in doing business with green organizations.
Reduction of operational costs
The implementation of sustainability practices will reduce some or our operational costs and increasing our margins.
Influencing regulators through an umbrella body
We have an opportunity to participate in the development of regulations for our industry is we band together with like-minded organizations to lobby the government on the kinds of regulations required.
Threats
Local regulations
We remain under the threat of local regulations if they find us unprepared and demand too much from us
International regulations
International regulations developed by international conservation organizations and ratified by the government may also present a serious threat to our operations. As Montgomery & Porter, (1991) stated, “Increasingly, both business units and corporations must compete globally (p. xv).
Loss of business to green institutions
If we respond slowly to the need to operate on a sustainable platform, we risk losing our clients to greener organizations. Porter (1991) states, “the essence of strategy formulation is coping with competition (p.11).
The SWOT analysis above provides us with an opportunity to “wake up to the internal rules” we are currently playing by in order to expand our field of possibilities (Howard, 2004, p.vxiii).
Business Opportunity for Sustainable Development
Renewable Energy
Our options for sustainable business lie in two areas. These are in the use of renewable energy sources and improvements in our operations. The two forms of renewable energy that have the best potential to reduce our footprint are wind and solar because of their inverse relationship. When solar power peaks, normally wind power dives, and vice versa.
We have the option of installing solar for lighting and for space and water heating. Solar photovoltaic panels produce electricity by converting light from the sun into electricity. The electricity produced will reduce the amount of energy used from conventional sources, which currently contribute towards our footprint. Solar thermal energy conversion occurs in thermal panels that provide hot water.
Using these panels also hold a key to reducing our carbon footprint and in the process contributing towards our effort towards sustainability. Solar energy is not available throughout. This is why a hybrid system that includes wind power. Nature has it that when solar energy dips, wind energy peaks, and vice versa.
This means that the system will be more reliable than if it has solar power only. Wind energy will not provide any heat. It will only supplement the energy produced by solar photovoltaic panels.
The other area where we have a good chance of working out our sustainability effort is in the area of our operations. While the second one is our internal business processes. Our operations have two dimensions.
They first one is services offered by external suppliers. We receive a lot of supplies and services from different service providers. They use vehicles, which consume fossil fuels such that they end up contributing towards our secondary footprint. We have the option of organizing an audit of all the services provided by our service providers and explore the means available for us to reduce this footprint.
Possible initiative will include reducing the need for site visits where the service requires the provider to come all the way to our facility. The service providers can use remote equipment to carry out monitoring and evaluation of their services cutting back on transport, which will reduce our secondary footprint.
Internally, we consume a lot of paper, soap, detergents, and other cleaning agents, among other office consumables. They contribute towards our footprint and environmental harm. The making of these consumables use up natural resources and others use chemicals.
We need to monitor carefully their use to reduce their contribution towards out footprint and environmental harm. It is clear that there are several options available for transforming our operations into sustainable ones. We able will be able to recover these costs by increasing our green business opportunities and avoiding taxes and other levies associated with unsustainable practices.
Business strategy
Strategy
Mark (2004), notes that strategy is about finding and exploiting, “multiple sources of attractive growth” (p. ii).The strategy we have for the implementation of sustainable business practices is a three-pronged one.
The basic elements include the use of alternative energy, reduction of the secondary footprint by coordinating services offered to us, and an audit of our internal operations to determine opportunities for reducing the amount of wastage on supplies. Our waste management systems will require auditing as well. We must stress recycling of all waste that we generate.
It will require the appointment of a special implementation committee that will define the implementable scope of our various options. This is because “strategy creation and its implementation should be approached as a process” (Harvard Business School, 2005, p.xvi).
They will implement a sustainability strategy and offer the monitoring and evaluation services required. They will also explore possibilities of associating with similar facilities at industry level to lobby the government so as the influence the degree of regulation necessary for the industry.
Vision
Our vision for sustainability will read as follows.
“To be a green organization by implementing sustainable practices by reducing our primary and secondary carbon footprint”
This vision will guide our general philosophy towards sustainable practices for our responsibilities and will assist us to maintain “a coherent sense of direction” (Wall, 2004, p.4).
Mission
Mission statements describe in broad terms the methods that will be the means of attaining the aspirations espoused in vision statement. Our mission statement will read as follows.
“We will attain sustainability in our business by expanding the use of green energy and reducing our secondary footprint by regular auditing our service requirements to cut back on waste and pollution”
The mission includes the two general methods that we hope to implement in the process of turning our practices to sustainable ones. It mentions the use of renewable energy, which is a key component of our strategy. It also includes auditing of our operations to take care of our secondary footprint.
Objectives
There will be four objectives for our effort towards sustainable operations.
Implementation of the use of solar energy and wind energy
This hybrid system is central to our sustainability effort. The power generated will go into powering all the lights and equipment in the office, or a large portion of it.
Reducing secondary footprint
Reduction of the secondary footprint is a priority component in this strategy. We will encourage all our suppliers and service providers to provide us with green services. One of the ways of ensuring this happens is to demand green services from all the service providers. We can implement this at the prequalification stage, whereby we only shortlist suppliers who have green business outlays.
Internal auditing to reduce wastage and pollution
We have a singular responsibility to identify all the ways in which our internal operations can contribute towards sustainability. This will require us to consider options such as paperless operations, innovative cleaning practices, and green disposal of waste.
Industry lobbying
The fourth objective we have is to come together with other industry players to lobby the government to provide the legal framework and regulatory requirements in a way that does not hurt our business. If we move before the government does, we will have a better chance of influencing the direction of the regulatory measures.
Financial Plan
The whole project will require financing. It is important to develop a sound financial plan. Stratton (2006) warns that many projects that exceed their budgets but fail to deliver their promises. The goal we have for the financing of this project is to ensure that the entire project does not affect our financial health, but actually provides us with new opportunities for improving our financial well- being.
“Companies that achieve superior business results are those that continually implement various programs to lower costs” (Suzue, 2002, p.1). The best way to approach it is to come up with a model that does not require external financing unless it has a viable payback period. For the renewable energy component, long-term financing will be necessary.
This means that we need to approach financiers to provide us with the funds required to acquire the solar and wind hybrid system. The estimated payback period for the system is five years, against an operational life of twenty years. This model makes sense for the renewable energy option. The financing of the operations segment can be by identifying areas that promise the largest savings, and implementing these first.
The savings generated will provide the funds required for the rest of the components. The lobbying component can fit well under current budgetary allocation for public relations. After implementation, we anticipate that our organization will have the opportunity to take advantage of green business opportunities hence our margin will grow.
Marketing Plan
What guides the development of our marketing plan is the knowledge that, “sound marketing is critical to the success of every organization” (Armstrong et al., 2011). There will be need to market the idea to three sets of stakeholders. The first set is our staff and the second one is partners in industry. The third set is the regulators while the fourth one is our suppliers.
The final one is our clients. Each of these stakeholders will be instrumental in the implementation process. Reaching our staff will require a seminar to explain to them all the aspects of the project because they will be involved in the implementation. Their cooperation is a key factor in the success of the project.
We will reach our suppliers by sending a briefing note explaining our interest to working with green suppliers and informing them that it will form part of the pre-qualification criteria for providing services to us. Our partners in industry will be crucial when we lobby the government.
Since there is interest in sustainable business, we hope that they will not require much motivation to form an association to front for our interests during discussions with regulators. We will send communication to our clients and to the public displaying our commitment to sustainable business.
We will include this message in all our promotional materials as a means of attracting the interest of clients looking to work with green conscious organizations. Indeed, as Davidow (1986) warns, “Marketing will determine the fate of companies” (p. xviii).
Corporate responsibility
Our interest in sustainable business will boost our corporate responsibility credentials. In addition to all the community projects we currently participate in, going green provides the community with a hope for the future.
It tells them that we care about our common future as part of the community, and we are contributing towards it by ensuring our activities do not interfere negatively with the environment. As Ventakaraman (2008) states, “the value that a project delivers must be evaluated in terms of its contribution to strategic goals” (p.17).
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