The importance of a sustainable business is huge. The consequences of climate change are visible everywhere: heavy storms, floods, droughts and famines are no exceptions anymore. The risks are great.
What are the chances that your company will be able to keep running in the same way for 50 years?
Fortunately, there are many possibilities to change your business into a future-oriented, sustainable and profitable one with purpose. Even though drawing up ambitious sustainability plans is not always easy.
I would like to give you the following 5 principles and some concrete tips to embrace sustainability within your business strategy.
1) Switch from a linear to a circular system
Most companies work according to a linear business model. A product or service is offered, bought and thrown away after use.
In the circular economy, materials, products or services are reused as a raw material, as the basis of a new or the same product or service.
Let's take our business model. Since the start - in 1945 - circularity has been the basis. Pallets that were left behind in Australia after the World War were rented out to companies for transportation. After use, they were returned, inspected and if necessary repaired to be rented out again (check the wonderful promotion videos from the beginning of CHEP here) This system, also called pallet pooling, is still used today.
In recent years, many more circular models have emerged, where products are no longer sold, but shared. The product as a service (PaaS). Think of shared cars and bicycles, shared lodging and even laundromats.
But how do you transform your existing model into a circular one?
First of all it is important to work on three levels: the way something is made, the way it is used and the way it is disposed of.
Many companies are looking at how products themselves can be made more circular. The focus is on the end of life: making sure the product is recyclable.
But recycling does not have to be the end here. When recycling materials it needs processing, water and energy. Why not try to take another step? The step to make sure your product is reusable.
Crucial to sharing and reusing is reverse logistics. How do you get the material or product back into the chain? How do you make sure that your product, service or parts of your product get back into the cycle for reuse?
Do you take care of the collection yourself? Are your customers responsible for it? Do you work with a deposit or do you integrate this in your standard price?
Nowadays, there are different tools to guide companies on circularity and to measure it. For instance, Circulytics, developed by the EllenMcArthur Foundation, is one of the first and most complete analysis tools available.
2) Look beyond ecology
Sustainability covers a broad spectrum and is more than just ecology. It is important to look beyond the impact on the environment and to make the social and human aspect sustainable as well.
What about diversity and inclusion, safety and well-being, talent development, training, anti-corruption, human rights and community involvement?
Many also forget the role of governance. How do you ensure that shareholders are involved and remain so? How do you deal with their feedback?
So make sure you have a good, well thought-out and written policy on all these issues. You'd be surprised how many companies don't have a basic policy for this. Yet it helps to give you direction, to keep a line and to keep improving your standards.
3) Aim for more than zero negative impact
Companies are strongly focused on reducing their negative impact on the environment and society, such as their CO2 emissions. This is obviously a good thing.
But what if you have eliminated all negative impact? Then you are left with a zero negative impact operation. But is it enough? Can't we do better?
Can't we create a net positive impact?
I look again at our own sustainability objectives. In it, CHEP has committed to going for a regenerative supply chain. This means as much as creating a net positive impact instead of only reducing the negative. To do more good, than bad.
For example, for every tree we use for our wooden pallets, we decided to grow not one tree (zero operation), but two.
(More on our past and future sustainability goals can be seen in this video).
4) Set up future proof partnerships
As a business, you don't usually work alone. You have a network of support functions and businesses around you. Collaboration is crucial for a successful business.
And if you share the ambition to create a positive impact, collaboration helps to achieve sustainability results as well. For example, since a few years we focus on transport collaborations to reduce empty kilometres and CO2 emissions of transportation.
But above all, be open about your goals and ambitions. Communicate about them with your customers and partners. Try to include them in your story.
Because why should you only be strict with yourself? Be just as strict with your business partners.
This will ensure that you also work with responsible and accountable partners and thus help make the entire chain more sustainable.
5) Follow up on your actions and compare with others
Obviously it is useless to set goals without knowing when you have achieved them. That is why it is very important to set science-bases targets, to follow up on them and to document interim results and compare them with an official source or reference.
I also recommend submitting for various awards or certificates. This has a dual purpose. On the one hand, a recognition obviously helps to boost your green image and credibility.
On the other hand, it also helps you to compare and benchmark with the market.
How is your company doing compared to others in the same sector?
Are you doing the right thing?
And also: what can you learn from others? How do they tackle certain challenges?
Thanks to the fact that we at CHEP are constantly reporting and reviewing our results and constantly keeping these 5 basic principles in mind, we have achieved several recognitions from various official authorities, the most recent one being the EcoVadis Platinum recognition level in Europe. This is the highest possible level and places us in the 1% of the most sustainable companies evaluated worldwide. EcoVadis looks at the results and actions in the areas of environment, working conditions, human rights, ethics and sustainable procurement.
Next to that we have been recognized by Barron’s as the second most sustainable company of the world and are included for the first time in the 2021 Top 100 of most sustainable companies by Corporate Kights, as number 18.
But perhaps the most important tip: make sure you also communicate all this to your employees. Involve them, train them and make sure they support your policy. Because they are not only the ambassadors of your company to the outside world, but also the basis of your business. And they are crucial for making your business ready for the coming 50 years.