Business sustainability and the power of the first step

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Originally posted Friday 29 October, 2010

Yesterday morning when driving up to Toowoomba and listening to ABC’s Tony Eastley on the AM program I was fascinated to hear from a Chinese fellow named Ma Jun.

For years I have been telling anyone who will listen that the current standard of living being enjoyed by people in western countries has been massively subsidised by Chinese workers and their environment.

The massive transference of resources and the cheap prices we have paid for manufactured goods could only be achieved by emerging economies sacrificing their people and their natural systems.
So it was good to hear Tony Eastley in his introduction give voice to that simple fact.
He said:
“There’s no question that a large percentage of Australian imports now come from China.
“But the big international companies like Walmart, Nike, GE and their local suppliers who are exporting goods out of China have been copping a steady barrage of abuse lately because of the amount of toxic pollution they create just so that consumers in countries like Australia can have cheap goods”.
But the real and surprising story as Eastley explained, was that “much of this bad publicity is being driven by just one man. Now, both multi-national and Chinese companies are beating a path to his door in the Chinese capital, seeking advice on how they get off his list”.

By publicising on the web official Chinese Government reports about Chinese companies that are flagrantly violated environmental and social laws, the small Institute for Environmental and Public Affairs founded by Mr Ma Jun has brought to international notice more than 60,000 companies many of which are suppling global corporations and western consumers.

No modern corporate wants the odium of a dirty supply chain and the business impact from Ma Jun’s exposure has been dramatic.

Hundreds of Chinese companies that were happy to violate their governmen’s laws are finding that their customers are more essential and having been told to clean up by their large Western customers, many are doing just that.

Here is a moot lesson in business sustainability being taught by one Chinese activist who is showing the relative power of supply chain pressures in driving performance in a way not achieved by the country’s environmental laws.

The implications for business evident in this story will be among many that feature late next month in Brisbane when I will make my first foray into executive training from the vantage of the business sustainability centre we have set up at USQ over this past year.

Having spent over twenty years working as advocate and strategist for the Australian cleantech and sustainable development sectors, including a decade in government, a logical next step for me now is to utilise a university platform to share the knowledge to promote more innovation.

When still at the EPA in Queensland, for several years I helped Professor Andrew Griffiths set up his very successful four day corporate sustainability course at the UQ Business School.

We demonstrated to sceptics, mainly in the UQ Business School, that there was a market for executive training in sustainability, particularly when it was delivered by people with proven backgrounds in the field.

But at a time when few busy people can afford to take a week off for professional and strategic development, there is a need for shorter more intensive courses or workshops on specific aspects of leadership, management, investment and technology for business sustainability.

That is where the training model of the Australian Centre for Sustainable Business and Development is being directed.

The mission of the ACSBD is to accelerate the adoption of sustainable development by proving the business case for sustainability.

Our first offering in Brisbane on 22 November will do just that by utilising our strengths in strategy, accounting and reporting, project management, and financial analysis.
Leading contributions will be provided by two of our Adjunct Faculty – the UK Royal Mail’s Martin Blake and Hatch’s global sustainability director Philip Bangerter, both of whom have proven best practice achievements in business sustainability innovation.

There is no doubt that businesses face market and consumer expectations which are increasingly complex or unexpected.

Who would have thought, for example, that it would be global businesses and not local EPAs that would be more effective in driving higher standards of environmental performance in the emerging heartland of Asian manufacturing?

Issues like sustainability, carbon performance, changing investor expectations on corporate reporting and accountability and greening markets are beginning to figure in the business context and yet many in the private sector glaze over at their mention.

Of course in Australia their attention to these issues has not been
helped by continuing policy confusion and an enduring sense of separateness (perhaps tyranny of distance) from global trends – which is curious given the export disposition of our economy.
Many SMEs particularly think such topics are only for the big guys to worry about – but they ignore (potentially at their peril) the supply chain implications of changing business to business demands – many of which happen rapidly. Remember ISO 14000 and global auto supply chains.
Another enduring truism to be remembered in this space is that business should never look to government to tell it what the future will look like.

Most politicians are too busy looking at the past working out how to promise more of the same to electorates they do not want to challenge, so that by the time they work out what is happening with broader themes of change, the general impulse of government becomes one of transferring the adjustment costs to other sectors – and normally the one that can pay is business.

So waiting for governments to fix the future normally involves business paying.
A far more profitable strategy is for business to focus more on building its own future and by staying ahead of regulatory and government learning curves.

So if you are in business you can rightly ask yourself is your organisation dealing with factors that are reflected in changing regulatory, market and supply chain expectations.
Are you also looking beyond your own business?

Because as the global financial crisis showed in dimensions completely unexpected, the changes and challenges facing your suppliers and customers has more impact on your business prospects than anything you do personally.

Building resilient competitive capacity is the hallmark of a sustainable business and that requires a ‘systems savvy’ that is intrinsic to understanding and using sustainability as a strategy for business.

Those people who register for ACSBD’s first venture into executive education will learn how different sector leaders here and overseas are building their competitiveness, exploiting new opportunities, and adapting their business using sustainability strategies.

It is expected that delegates will leave at the end of the day up to speed with some of the practical financially rewarding steps they can take to build sustainable businesses.
In four main sessions we plan to cover:

1. The main trends and likely directions for business globally that arise form a mix of sustainability pressures, emerging economies, changing demographics, climate change, carbon pricing, and greening markets;
2. Current and future directions with regulatory and voluntary accounting and reporting for business sustainability, including the National Greenhouse and Energy Reporting System, Global Reporting Initiative and Carbon Disclosure Project,
3. How sustainability factors are changing project evaluation, planning, design, pricing, and standards;
4. How to translate carbon performance into a profitable emissions abatement strategy through smart purchasing, energy efficiency savings, and the elimination of redundant technology and practices.

Along with me to provide briefings will be:

Dr Martin Blake, formerly Head of Sustainability at the Royal Mail Group, UK and leader of one of the biggest corporate sustainability projects in the world; Martin was appointed ACSBD’s first Adjunct Professor ion April 2010

Professor Julie Cotter, Deputy Director of the ACSBD, Professor of Accounting at USQ, a specialist working in corporate sustainability reporting, sustainability accounting systems and broader governance for sustainability. Julie is also chairing a technical panel advising the Climate Disclosure Standards Board; and

Philip Bangerter, Global Director of Sustainability at Hatch – a leading international engineering and services consultancy. Philip has worked all over the world on major infrastructure and mining projects.

The one day board room briefing will cost $595 which includes briefing notes and catering. It will be held on Monday 22 November starting at 8:15 am and finishing at 5:30 pm. The venue will be The Sky Boardroom, at the Hotel Urban Brisbane, 345 Wickham Terrace, Brisbane.
Registration forms can be downloaded from http://www.usq.edu.au/acsbd/news/seminars

I remember about ten years ago hearing a talk about organisational change and innovation by Harvard change leadership guru Professor John Kotter.

In explaining how a change process had to have a genesis and be grounded in action, Kotter gave an insight provided by Konosuke Matsushita, the Japanese industrialist who founded Panasonic.
Evidently, Matsushita was once asked how long would it take to clean up corruption in Japan’s political life.

He reportedly answered it would take a very long time, possibly even centuries.

The incredulous journalist seemed a bit fazed by the seeming eternality in Matsushita’s assessment and replied: “Well if it is that difficult and will take that long, why should anybody bother?”
To which the industrialist said: “All change, no matter how hard or long, starts with a first step and it is precisely because it may take that long that we have no time to waste – which is why we should take the first step now”.

There is relevance in that message for anyone contemplating the changes that come with a conscious strategy for sustainability in a business or organisation.

But before changes are anticipated or planned, the first step must be to learn so to better understand the context, the issues, and opportunities.

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