Sustainability heads down strategic road

TALK to anyone in the WA timber, fishing or resources industries and they will be able to list the social, environmental and economic impacts on the way they do business.

But the idea of operating a business for long-term sustainability is no longer restricted to larger industry sectors such as agribusiness, resources and energy.

Once upon a time the concept was rarely considered strategically, except when a business wanted to set up in a foreign or remote environment, and such considerations were an absolute necessity for gaining a foothold.

A Perth business forum last week was told that for all sectors, and in all environments, sustainability was no longer a warm fuzzy concept, airy-fairy talk, or even an informal commonsense approach.

Community sophistication and power, plus government regulations are forcing businesses to consider more formally, and far more comprehensively, the economic, social and physical environments that they influence.

Businesses were told that it was in a company’s best interest to move from merely responding to government and community expectations as needed, to anticipating those expectations.

One home-grown example of the change in outlook and perspective is this year’s strategic blueprint strategy, under formulation by the shires of Ravensthorpe, Esperance and Jerramungup, largely in response to BHP Billiton’s planned large-scale nickel mining operation and associated service and infra-structure needs.

Leaders within those communities noted what they considered disasters for other WA communities where similar operations had come and gone with no foresight or planning for the ‘during and after’ social, environmental and economic consequences.

The Ravensthorpe blueprint exemplifies the view of the WA Government’s Sustainability Policy Unit director Peter Newman.

Professor Newman told the forum that there was no radical approach to sustainability.

“We have to build on what we’ve got, in small steps, see if it works, and then proceed from there,” he said.

Professor Newman said there were a lot of sustainability principles around, coming out of increasing global discussion, but not many had yet fully addressed the social dimension. Most only addressed environmental aspects.

Ernst & Young senior manager sustainability services Sean Kildare said it was not within the power of individual business to bear the burden of solving the world’s problems. That was the role of government.

However, he said, it was within the power of business to no longer be the cause of those problems and to stop contributing to them.

Mr Kildare said a company’s best option – one that incorporated low risk at a manageable cost, and offered tri-sector opportunities and partnerships – was to enter into shared, negotiated responsibilities between industry, government and the community.

Businesses would need to restructure long-term models and agendas to address sustainability adequately, he said. However, many were well-positioned to re-badge some of what they already did for triple bottom line considerations, to make their efforts more obvious to stake-holders.

In many cases company stake-holders are looking for transparency and assurances that businesses are developing comprehensive risk analysis and evaluation processes that address all issues.

Mr Kildare said understanding stakeholder issues and managing their expectations were paramount to success. This success would be assured only by making sustainability a business issue at all levels of the organisation.

Risk Management Technologies general manager operations, Jeff Marsh, said businesses would do well to view sustainability obligations as risk management.

However, he said many businesses had not formed the habit of managing risk well.

Quoting an IBM survey, Mr Marsh said only 7 per cent of businesses collected data to make strategic decisions.

He said most companies systems were not aligned to business processes, nor was the data generated transparent, and other studies had suggested 85 per cent of reported risk-related losses were already know to persons within the organisation.

Mr Marsh recommended a sustainability action plan in terms of a process, rather than an outcome.

He outlined a staged plan including awareness, monitoring, quantifying and integration phases.

The carrot in adopting such a plan is a package including reduced occupational health and safety risk, improved environmental performance, finance savings, economic growth, better brand value, enhanced reputation, improved community relations – all coming together to produce the ultimate market advantage.

The WA Government’s Sustainability Policy Unit has produced a book of 43 case studies showing business innovation in addressing sustainability issues.

The State draft sustainability strategy will be finalised next year, and implemented over a minimum of 10 years.

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