Companies are always looking for ways to improve operations in order to increase profitability. The business case for implementing sustainability practices has demonstrated proven results at top companies that have adopted a holistic lifecycle approach with a thorough methodology for quantifiable results in social, economic and environmental indicators. The result is a more agile and resilient organization that capitalizes on its values through the support and loyalty of its investors, employees, vendors and customers.
The Barrier of Change
Although implementing sustainability practices have the economic benefits of reducing risk, reducing cost and increasing revenues, companies fail to adopt sustainable operational measures due to culture resistance in the organization. In any business environment, changes are inevitable, but there is often times resistance to change. Organizations need to find leaders that are willing to encourage the acceptance of new ideas and accentuate the benefits.
With the advances of technology, companies have been able to extract resources easier and faster. The industrialized manufacturing system can produce million of units in a short amount of time, therefore materials efficiency, recycling and energy efficiency is looked upon as a burden in the quest to sell more units. But as businesses are being challenged with increasing competition for resources from emerging economies, higher political disruptions from sourcing countries and the effects of climate change, they are faced with the inevitability of change – and sustainable change is inevitable, if businesses want to survive.
Understanding Sustainability Barriers
Several studies including a survey performed by Aberdeen Group in 2009 show 4 major challenges companies face when embarking in greening their operations.
Most companies think that sustainable practices are expensive, difficult to implement and have a long term rate of return. As businesses gear up to a zero footprint process, there are many activities that do not require any capital investment, but only changes in working habits. Depending on the level of existing efficiency, a company can expect between 5 and 15% cost savings within the first two years, with little or no capital investment.
Difficulties Demonstrating ROI
When proper measurements for tracking progress are implemented, it is not difficult to showcase the improvements. Successful reporting methods establish goals and baselines that companies use to monitor progress. Businesses also recognize that not all gains are expressed in economic terms. One of the important principles of sustainability is the expansion of values for measuring organizational success. Social and environmental progress is many times measured in qualitative ways.
Disruption of Business Processes
Accepting that sustainability is a shift in business paradigm is a major obstacle for companies that do not want to change their standard business operations. Consequently, executives face resistance in moving their sustainability vision into a practical plan that could clearly make a positive and lasting impact for the company.
Lack of knowledge
Lack of knowledge is a big issue, especially since the concept of sustainability is relatively new for some businesses, and vague in its definition. There is also a lack of understanding on how to proceed in engaging shareholders and creating and implementing a sustainable plan. The first step in this situation is to provide education that allows for people to identify with the theory and practical applications of sustainability.