Corporate sustainability as a competitive advantage for businesses
Corporate sustainability is now synonymous with growth and success. Until a few years ago, the belief that attention to environmental impact as part of the Company's Social Responsibility (CSR) was widespread, with purely legal or even ethical and moral implications, instead of disconnecting possible impacts on the business model and expectations of the market. Today, however, companies are aware that there is a growing link between the green practices of a sustainable company and success. In short, sustainability ceases to be merely environmental and broadens its boundaries to the company's "sustainable" business model.
Several aspects lead to a growing interest in sustainability and the constant increase in investments. Among these, the sensitivity of the companies themselves, the need to adapt to regulatory changes the need to increase the quality of the products. And the simultaneous reduction of the costs necessary for their production, the improvement of the image and reputation in the eyes of consumers, increasingly sensitive to environmental evolution, and, finally, new market opportunities.
What is corporate sustainability and green practices: a definition
Corporate sustainability means adopting "green practices in the company," a series of tools and organizational / management structures aimed at reducing the impact of the company's activity on the ecosystem and implementing a strategy oriented towards environmental sustainability. More specifically, it assumes specific variations even though the outlines are still blurred, essentially attributable to 5 areas of activity:
- Production of energy from alternative sources;
- Recovery of waste and products (circular economy);
- Optimization of logistics;
- Product innovation;
- Efficiency in production processes and/or staff structures.
The empirical evidence of the analyzes conducted tells us that among the green practices implemented, the search for efficiency (in particular energy) in the core production processes. And in the management of support facilities represents the objective of the main projects implemented or in phase implementation by companies, followed immediately after by the concept of "recovery" of imperfect or obsolete waste and products (or parts of them).
Going on the numbers and results, about 82% of the companies interviewed see the issue of sustainability as an opportunity for research both in the efficiency of production and staff structures (around 82.5%). And in better use of products and components in a recovery/recycling perspective, the use of renewable sources remains on the companies' agenda, albeit with less commitment.
Going into more detail, efficiency in the use of production factors and in the energy and environmental optimization of the facilities has a predominant relevance in 59% of cases (34% efficiency, 25% recovery). In particular, the theme of recovery and recycling is the second in terms of relative importance and is seen as an important opportunity for cost reduction. It should be noted that the use of renewable sources, due to the recent regulatory developments which do not stimulate the cost-effectiveness of investments in this sense, appears to be the green practice towards which companies are less sensitive today.
The main driver that moves the choices of the companies in this directly relates to the company's internal policies and choices, testifying to increasing interest and awareness towards the theme of sustainability. However, external factors such as regulatory developments or the evolution of market dynamics or competitors' moves remain of considerable importance.
Among the objectives achieved, 75% of the companies interviewed place regulatory compliance and / or obtaining specific certifications as the main result achieved. It is also interesting how the obtaining of specific awards and recognitions related to environmental sustainability is a relevant factor and cited by about 34% of companies.
It allows the sending of invitations to events and cultural initiatives of each of the Owners, as well as the sending of communications relating to white papers, editorial content and/or other information regarding their activities with automated and traditional contact methods.
The future objectives and the related investments continue to go precisely in this direction. The companies tend to place themselves in an increasingly proactive way towards green issues and sustainability; to transform what was previously seen as a mere fixed cost in an investment opportunity with a significant return.
The theme of the search for efficiency and the improvement of processes with a view to cost-saving is considered the main future objective of the companies analyzed. However, the cross between sustainability and the creation of new market opportunities through the launch of new products with intrinsic and extrinsic characteristics of sustainability sees its importance increase in the near future.
Sustainability and business growth: dedicated budgets are growing
Environmental sustainability, therefore, appears increasingly as a strategic element capable of triggering new competitive dynamics and playing a pivotal role in the competition.
To this end, the physical and economic resources that companies assign are increasingly being monitored and monitored, albeit with different degrees of accuracy. In particular, only 18 companies out of 80 declare that they do not have a specific budget dedicated to the issues in question (less than 23%). Among those who claim to have a dedicated budget (62 companies), 40 claims to allocate the budget not on the generic sustainability front, but for specific projects whose control. However, it does not fall on dedicated structures but on company management. Finally, 22 companies that, in addition to specific economic resources, govern a relative process of distribution, planning, and control.
The share of investment dedicated to Green issues is not transparent in terms of statutory financial statements. It appears difficult to identify an amount that can provide an overall order of magnitude of the investments and expenditure of the sample.
However, it was possible to investigate the overall sentiment in terms of expected growth in investments. In particular, as many as 49% of the companies interviewed have expectations of investment growth, and of these, almost 70% expect increases of more than 5%.
The business areas involved in a sustainable business
Starting from the value chain model, the companies indicated one or more areas for the placement of the implemented green practices. Within the same area, the individual detailed practices were then indicated.
The green practices applied by almost 60% of companies pertain to the Corporate area (e.g., green missions, structured reporting systems, etc.) and Operations (waste recovery, energy management, etc.). ICT is not yet perceived as a possible field of application and development of green practices. In the corporate sphere, the definition of the green mission is the starting point for 66% of the companies interviewed, while over half of the companies have worked/are working on the implementation of measurement and control tools—the environmental impact of one more core processes than the return on investments related to environmental sustainability.
Waste management, passing to Operations, is seen not only as necessary attention to disposal, but also as an opportunity to optimize production processes to minimize them and recover them. The theme of the containment of greenhouse gas emissions emerges with particular importance not only due to the focus that Automotive has always placed on the issue of containing emissions. But also of all those industries processes, both small and larger, which is more or less recent years have found themselves managing this problem and have been able to transform it into a critical success factor.
The research investigated the company's organizational structure to identify the presence or absence of a function dedicated to monitoring this issue to understand the recognition of the same by the other functions. The result is amazing, so much so that real organizational development paths emerge.
European companies are still far from effective monitoring of sustainability through stable and dedicated structures, so much so that only in 40% of the cases observed is there an organizational structure dedicated to these issues in the company. There are still few companies that have developed specific figures and professionalisms such as the Environmental Manager, the Sustainability Manager, or the Energy Manager. In many cases, it is an evolution of the role of Quality Manager (QHSE), the standard-bearer of sustainability.
Companies that are more structured and sensitive to sustainability issues have a very streamlined organizational structure consisting mostly of 2-3 dedicated resources. Almost 60% of companies keep the competence allocated to multiple subjects or do not oversee the topic with specific roles. In less structured companies, responsibility for sustainability is dispersed across the organization without having a dedicated presence. In other cases, management and organizational control are delegated to the individual functions where, however, the green issues do not represent the "core activity." It is important to underline how an important part of the sample has not yet created dedicated organizational structures or measurement systems dedicated to environmental performance.
In essence, as the commitment to sustainability issues increases, the organizational structure evolves hand in hand. However, as many as 42.5% of companies appear to be "stuck in the middle": that is, they are not yet able to equip themselves with those technical tools capable of anticipating change. Seen in value, in particular, the gap between small and medium-sized enterprises and larger ones still appears extremely significant. However, the larger companies are the ones from which that organizational leap is expected to manage innovation effectively.
Author: Vicki Lezama