Developing a

Sustainability Strategy

a ten-point guide for small to medium sized businesses

Business sustainability is becoming increasingly important for managers in the modern economy. Put simply, business sustainability can be described as a holistic continuous improvement process that includes the sound management of people and the environment. Business sustainability makes good business sense because the benefi ts feed directly back into the bottom line. But where do we start as small-medium sized businesses?

Rather then being just ‘another thing to do’, business sustainability is an over arching concept that involves doing everything better and more effi ciently. True sustainability must be integrated into all operations of business - from policy and management through to on-ground activities such as purchasing, production and distribution. While sustainability needs to be driven from the top, it’s not just the job of a single staff member or department - it involves everyone!

Sustainability is often approached in an ad-hoc way. For example, you may have a couple of stand-alone initiatives in your work place that are not linked to any broad strategic objectives of the business. This is a good start, but a coordinated process requires the development of a sustainability strategy that is strongly aligned to the business plan.

This document will guide you through the steps to help you develop a strategic approach to sustainability in business.

Overview

The Business Plan

1. Business Drivers

2. Vision

4. Current Position

5. Gap Analysis

6. Strategies

7. Action Plan

8. Implementation 9. Monitor & Review

10. Improve

Developing a Sustainability Strategy

3. Objectives

Ten Step Approach

Step 1 - Determine Business Drivers

Identify the pressures that are driving your business to become more sustainable. They may include:

• Potential to improve the bottom line through increased effi ciencies;• Demonstrating leadership and improving your image and reputation;• Compliance and risk management;• Personal passion and commitment to making a difference.

Step 2 - Set a Vision

A vision statement announces your future goals – it is your ‘compass’ to show the outside world where your organisation is heading. The best vision statements are short, clear and concise, realistic and have measurable outcomes.

You may choose to draft a sustainability policy that formalises your company’s commitment to the vision, and display it prominently in your workplace.

(An example of a sustainability policy can be found in Attachment A)

The Big Cheese Company - Business Drivers

The Big Cheese company believes that sustainable growth and maximising shareholder value into the future will be achieved by:

a) Paying careful attention to customer needs, and providing superior quality and value; (driver – product quality)

b) Establishing clean and effi cient production processes that minimises resource use and minimises negative impacts to the local environment, (drivers - cost and environmental stewardship)

c) Establishing strong links with our local community. (driver - reputation management)

The Big Cheese Company - Vision

The fi rst cheese company that, by its actions, demonstrates what sustainability is in all its dimensions - people, process, product, place and profi ts.

How we do this – the Sustainability GoalsWe will produce sustainable cheese products by 2015, by:

• Reducing greenhouse emissions from energy consumption to zero,• Reducing our impact on local water supplies through responsible use and disposal,• Being a waste wise manufacturer,• Working closely with our local community in all of our operations.

Ten Step Approach

Step 3 - Set Objectives

Your objectives relate to your sustainability goals. They are more specifi c than your goals as they contain numbers and dates.

Step 3 - Set Objectives

The Big Cheese Company - ObjectivesThe Big Cheese Company - Objectives

To achieve our goals by 2015, the Big Cheese has established the following objectives.

Objective 1 - Reduce our consumption of mains water by 80%

Objective 2 - Source 100% of our energy from renewable sources

Objective 3 - Use 100% of raw materials from local environmentally accredited sources

Objective 4 - Generate zero waste to land fi ll

Objective 5 - Employ 95% of our staff from the local area, Cheeseville

Step 4 - Establish Current Position

In order for you to reach your goals, you will need to develop a good understanding of the current position of your business – which includes an understanding of its key impacts. Use the Sustainability Self Assessment tool to establish benchmarks and raise awareness about what sustainability means in the context of running your business.

Step 4 - Establish Current Position

Establishing the current position of Big Cheese

“By using the Sustainability Self Assessment Tool, we have been able to establish some benchmarking fi gures across a range of sustainability indicators including water and energy consumption. It helped us understand the extent of some of our key impacts, and also helped us identify other sustainability issues that we hadn’t previously thought of.

We recognise that we are a particularly large user of water so we engaged the auditing services of our local retailer to help us develop a more detailed understanding of our consumption levels and patterns. “

Step 5 - Analyse Gaps

Identify the areas of your business that have the greatest impacts - these areas are likely to reap the greatest potential benefi ts.

Step 5 - Analyse Gaps

The Big Cheese Gap Analysis

“The Water Audit has provided us with a detailed understanding of our consumption levels and patterns in the production process. We have been able to identify areas that are problematic and we now realise where we need to concentrate our efforts for the biggest gain.”

Ten Step Approach

Step 6 - Develop Strategies

Now it’s time to develop appropriate strategies to address the most signifi cant impacts of your business. A strategy describes how you will reach your objectives and should be aligned to the business drivers identifi ed in Step 1.

Step 6 - Develop Strategies

The Big Cheese Water Strategy

This example relates to Objective 1 – Reduce Mains Water Consumption by 80% of current levels by 2015.

Strategy 1Water Effi ciency Strategy - This strategy will explore opportunities for more effi cient water infrastructure. It will target the production process on the factory fl oor and water consumption in the offi ce.

Strategy 2Water Catchment Strategy – This strategy will explore options for the best way to capture, store and treat water for on-site use. The strategy will consider all water uses in the company including potable (water used for drinking and in the production process) and non potable uses on the site.

Strategy 3Water Education Strategy – This strategy will focus on staff education to encourage all employees to play a positive role in working towards the company’s water conservation objectives. The strategy will include incentives and awards to promote water conservation initiatives in all areas of operations.

Strategy 4Water Partnerships Strategy – This strategy will aim to develop stronger links with our suppliers (including the suppliers of manufacturing equipment, our water retailer, and other stakeholders) to explore further opportunities to minimise consumption through innovation and technology.

The Big Cheese Water Strategy

Step 7 - Develop Action Plan

The action plan is the key planning document that describes what actions you will undertake to achieve your objectives. It identifi es aspects required for implementation including:

• Cost/benefi t calculations and payback periods• Targets, milestones and target dates• Budgets• Other resources, including staff, technical expertise, external agencies• Monitoring, evaluation and reporting processes

Use the Sustainability Action Plan Template in Attachment B to help you through this stage.

Step 7 - Develop Action Plan

Step 8 - Implementation

After all this planning, it’s now time for the doing! Integrate actions into core business processes and regular reporting cycles. This is also where you may need to develop or adjust policies and procedures for the various aspects of your business to ensure that each staff member understands their role in the business.

Step 8 - Implementation

Ten Step Approach

Step 9 - Monitoring and Review

This is critical to gauge your progress towards your overall objectives. Regularly monitor using graphs and diagrams to help with the communication process. You can use your Sustainability Self Assessment tool to track and monitor your progress.

“You can’t manage what you can’t measure”

Step 10 - Improve

Incorporate this process into the company’s overall continuous improvement process.

Step 10 - Improve

Tips Gain senior management support at every step Be realistic about the time and effort required for implementation Involve others Display simple reports in staff room Acknowledge & reward outcomes Share your successes with others

Be realistic about the time and effort required for implementation Involve others Display simple reports in staff room Acknowledge & reward outcomes

Please Note: This document is a quick guide only, designed to assist small to medium sized businesses develop a more strategic approach to sustainability. It is not designed to replace existing approaches as required by various environmental certifi cation schemes such as ISO 14000.

Attachment A - Characteristics of a standard environment policy

THE BIG CHEESE PTY LTDDAIRY PRODUCTS MANUFACTURER

ENVIRONMENTAL POLICY STATEMENT

The Big Cheese Pty Ltd is one of Australia’s major dairy producers. The company strives to be environmentally aware and actively supports programmes that minimise negative impacts on the environment.

We are committed to comply with relevant legislation and requirements to prevent pollution. We seek to understand the effects our activities have on the environment and to continually improve its environmental performance by supporting initiatives such as:

Waste minimisationRecycling of natural resourcesReduction of material and energy consumptionActions to prevent accidental pollution

The Big Cheese Pty Ltd seeks to ensure that its Environmental plans, objectives and progress against these plans are made available to all interested parties and are relevant to its activities. We will ensure that this policy and all procedures relating to it are understood, implemented and maintained.

Our belief is that this policy can only be successfully achieved with the support and commitment of all employees at The Big Cheese.

Jack CheeseOPERATIONS MANAGER DATE: 01/2/05

Name, title & date

Commitment

Communication / TrainingImplementation

Governance & transparency

The Big Cheese Pty Ltd seeks to ensure that its Environmental plans, objectives and

Understanding of impacts & key action

areas

Title and Company Name

Our belief is that this policy can only be successfully achieved with the support and

Sustainability Action Plan The Big Cheese Company July 2005

This document outlines various sustainability actions identified in the Big Cheese Sustainability Strategy

Impact & Strategy

Description Baseline Figure

Actions for Consideration

Potential Benefits / Comments Estimated Savings units - $

Capital Cost

$

Payback Period months

Target Target Date

Budget Other Resources

Officer

Water Strategy 1 Taps in toilets &

kitchen 1000 litres

Install flow restrictors in toilets and kitchen taps

Easy to install, very cheap. Immediate reduction in consumption following installation.

1000 litres, $100 p/a

$200 24 9000 litres

07/06 $200 Plumber John Gorgonzola

Toilet cistern 8000 litres

Install half flush cisterns

Significant potential to reduce consumption from flushing toilets by around 40%. Rebates available.

3000 litres, $300 p/a

$900 36 5000 litres

07/06 $900 Plumber John Gorgonzola

Waste

Energy Electricity

Gas

Transport

Raw Materials

Noise

Community

Other