SUSTAINABILITY CONSULTING FOR COMPANIES

This question is also about the dimension of awareness. Understanding what the right issues are is not just a rhetorical process, but a process of awareness that the company itself undertakes to understand what they are. We facilitate and support this fundamental process of awareness. The resulting issues are, shall we say, a “side effect” of this process and not the goal, because it is not only important to understand what the right issues are, but also to acquire the ability to recognise them oneself: When the external context, the world, changes, the issues will change accordingly. In this sense, dealing with sustainability becomes an act of responsibility and not just applying a standard to meet requirements.

As sustainability consultants, we at Terra see ourselves first and foremost as supporting companies in finding the best way and methods for sustainable management and development. A sustainability consultancy always covers the following 4 steps:

1. Define sustainability: This means that we first help companies to understand for themselves where they want to go, what sustainability means to them and which fields of action they want to tackle specifically. 
2. Providing an overview: We help to get an overview for the complexities of the field and legal requirements so that the company can start the process well. 
3. Create a team: Based on the wishes and plans we work out with the company, we put together a team with the necessary competences. 
4. Start the process: Our team accompanies the company in a dynamic and adaptable process that takes current needs into account. In this way, we can also offer coaching in the right places, incorporate training for employees, so that the whole company pulls together and reacts to changes.

In discussions with clients, we are often asked whether sustainability and successful business are in competition with each other and whether they are two opposing concepts. Our answer is no! On the contrary, business plays a crucial role in sustainable development and an early decision for sustainable business and a sustainability strategy can bring decisive advantages. 

This is for two main reasons. 

1. Sustainable business is better for the environment: addressing sustainability, and especially effectively reducing energy consumption and CO2 emissions, helps reduce the scope of climate change, which means a more stable economy, fewer natural disasters and extreme weather events, and fewer supply shortages due to droughts and pandemics. 
2. Sustainable business improves credibility: Taking sustainability seriously and deeply helps to convince the clientele. By communicating the measures taken as a company, one achieves a credible appearance in the public eye and can also engage employees beyond their daily work. We believe that successful business depends on sustainability.

The start of a sustainability process in a company, for example a sustainability strategy, is also accompanied by various advantages for a company: 

1. Firstly, the company’s business model is analysed and it is understood what the critical success factors of the company and its functional model are. 
2. Furthermore, the reference context is analysed, also in relation to the competitors/peers/inspirers of the reference.
3. It is also understood how their business models work in comparison to those of the client company. 

There are two approaches here:

1. The classical model: this envisages identifying areas of intervention to position oneself according to the chosen market strategy and the corresponding business strategy. 
2. The systemic approach: In our case, we use a systemic approach for this. This means that companies are not considered as separate elements, but as organisms (actually systems) in relation to which it is possible to identify so-called levers in order to achieve the desired strategic change. 

So what is the difference between these two approaches?

Let us imagine a person who has knee pain and approaches the physiotherapist in the first case and the osteopath in the second. The physiotherapist will act on the symptom selectively (linear model – traditional). The osteopath will ask about the cause of the symptom and where it comes from (systemic model): Have you ever had pain in your body due to a jaw closure problem? At this point the osteopath will start at the jaw and bring about a change in the whole body system, including improving the knee pain. Both approaches can solve the problem, but the second approach is more profound and structural, looking at systems primarily as a series of relationships between parts and as constantly evolving organisms (learning organisations). 

Opportunities for innovation arise from 

1. investment and/or other positive aspects of the company’s activities
2. and can (and often are) derived from negative aspects, which are transformed into levers for systemic change through this approach. 

The impact of systemic change is obviously more long-term, more profound and requires more time than the traditional linear approach. To support the systemic approach, the opinion of stakeholders is also taken into account, who are “outside” the business system but are part of its ecosystem. In the same way as above: How might a change in the relationship with one of my stakeholders affect my system itself? Let’s just think about how the dynamics along a value chain might change if the company applies a different pricing policy to its suppliers.

In summary, the choice of elements to focus on to gain a competitive advantage is a careful and deliberate mix of the following factors:

• Market positioning (current and aspirational), 
• internal organisation 
• internal development opportunities (investment, organisation, time, people, etc.),
• understanding of the key levers to be tackled at a systemic level
• Understanding the external constraints to the implementation of the strategy.

Like any pioneering work, the pioneering role of sustainability advocates lends itself to internal and external communication: 

• Internally, in times when Generation Z is demanding meaningful work. 
• Externally, because customers everywhere are looking for differentiation and identification. 

Anyone who has embarked on the path of transformation knows that there is more to it than fulfilling pre-determined standards. Clear criteria and a guideline can be a valuable tool here. Those who set out on the path always have another strong companion: the opportunity for innovation.

 

It is widely recognised that disruptive or radical innovation is required to catalyse widespread change around sustainability, as a more sustainable business model often requires a redesign of methods for the following:

• Product and process design 
• Production
• Distribution 
• Administration 

Companies that strive for sustainability are more likely to innovate, according to a Deloitte research study. In its report titled “Sustainability Driven Innovation”, the firm quantifies how sustainability leadership is linked to innovation leadership and concludes that companies that are sustainability leaders are 400 per cent more likely to also be innovation leaders. This correlation is likely due to the fact that companies that strive for sustainability are more likely to develop innovative processes, products and services to bring their sustainability strategies to life.

After the bad press that shoe and apparel company Nike received in the late 1990s and early 2000s for exploiting workers in offshore factories, the company embarked on a two-decade journey to reinvent its image and shape its supply chain and product development in more sustainable ways. 

Today, Nike is recognised as one of the leading brands for sustainability. Hannah Jones, the company’s Chief Sustainability Officer, defines innovation as “invention that creates value, whether that’s value in terms of sustainability, new offerings for the athlete or in terms of our shareholders”. Starting in 1992, Nike invested around $50 million in research and development to replace FS6 gas (a greenhouse gas) in its Nike Air soles with nitrogen. This led to the birth of the high-performance Airmax 360 in 2006 – the first athletic shoe to use air cushioning to support the entire shoe without additional foam support. By taking the path to improve the sustainability of their business, Nike was able to create an innovative, high-performance shoe while reducing their impact on the environment.

This link between sustainability and innovation is good news for businesses because in the knowledge economy, a company’s ability to innovate is critical to its competitiveness and longevity. By embracing sustainability, a company can create a win-win situation where both the planet and the company benefit.

There are many voices that see innovation as the only sustainable competitive advantage that 21st century organisations can achieve. This is based on the premise that today’s knowledge economy already gives companies access to vast amounts of information and that the difference between the best and mediocre organisations is their ability to use this information to innovate and stay ahead of the competition. 

However, to reap the benefits of innovation, companies must be willing to take risks and accept short-term costs (or view them as an investment) in order to reap the benefits in the medium to long term. This requires commitment from top management and a willingness to stay the course despite the challenges. Innovation can take several forms:

• Innovation can be defined as the invention of new products and services that can be profitably offered on the market. 
• Innovation can be applied in many different contexts, including technological innovation, product innovation, process innovation, policy innovation and social innovation, to name a few. 

Often innovation by companies (or industries as a whole) is divided into 3 different types:

1. Incremental innovation: incremental improvements to products or processes, such as when a factory makes adjustments to its machinery to produce a larger quantity of products at a lower cost, or when a digital memory manufacturer develops smaller memory cards that can store larger amounts of data.
2. Disruptive innovation: Extreme changes to existing products or processes, e.g. when first CDs replaced cassettes and later the iPod revolutionised the market for portable music players and made devices like the Sony Walkman obsolete.
3. Radical innovation: This type of innovation depends on the discovery of new scientific knowledge and leads to the creation of entirely new industries. For example, inventions such as electricity, the telephone and the internet led to the creation of brand new industries with a variety of goods and services offered to consumers. This type of innovation is usually created through collaboration between academic/scientific institutions and businesses.

Innovation is an important driver of sustainability, it is a necessary condition to reorient the economy. However, innovation alone is not enough, it is not a “sufficient condition”. It also requires the vision or purpose mentioned several times, which represent the ethical compass of management.