Thinking beyond the conventional role of business is not new. But what’s increasingly clear is that taking a sustainable approach is no longer just part of the corporate social responsibility agenda. It is mainstream and, in my view, critical to enduring commercial success. It must be embedded at the heart of every business strategy.
I have learned how taking a lead on sustainability offers opportunities to deepen relationships with our customers and staff, and to increase our financial and operational efficiency.
More and more consumers are looking for the brands they buy into to do more than provide products and services. They also want to know you’re using their loyalty – and their cash – to act on issues they care about, such as promoting healthier lifestyles or tackling climate change.
Beyond the benefits to people and the planet, being sustainable has also driven a reappraisal of our brand by our customers. That means more customers staying with us, spending more, and recommending us.
This ability to explicitly demonstrate the brand and commercial benefits of putting sustainability at the core of our strategy has been critical to my capturing corporate buy-in – especially from those most sceptical about taking such an approach.
But it is the increased financial and operational efficiencies delivered by a sustainable approach where the argument for action becomes most persuasive.
BSkyB became carbon-neutral in 2006 – the second FTSE-100 company to achieve that status. But we’re now going much further under the stewardship of an Environment Steering Group (ESG), which was set up two years ago to drive forward our approach. If anyone in the business still felt sustainability was a niche concept, a fad that would soon wither, this development proved our commitment.
With both myself and the CEO Jeremy Darroch among its members, the ESG brings a long-term financial perspective to green initiatives right across the business. It’s already set the business some pretty tough targets. By 2020, we have to reduce carbon emissions by 25 percent; make our buildings 20 percent more energy efficient; and – at BSkyB-owned locations – get 20 percent of our energy from on-site renewables.
In the end, driving sustainability through social and environmental responsibility comes down to a hard-headed financial and commercial calculation. Those businesses that understand this, that see the case for action and take action, will gain competitive advantage. Being a good steward of the environment; caring about the communities we live and work in, and being an efficient and profitable business over the long term are not mutually exclusive. They are one and the same.
Sustainable benefits in action
1 While it may appear a difficult pill to swallow, an initial financial outlay to create a sustainable headquarters for your business can reap long-term financial rewards.
Harlequin 1, BSkyB’s new broadcast facility (pictured), will cost the company more than £230m. Among the innovations are TV studios entirely lit by low-energy, low-heat LED bulbs. Natural ventilation systems will reduce the need for air conditioning. A wind turbine will provide energy for office lighting. And a combined cooling, heating and power plant will provide over 40 percent of the energy needed to run the building.
2 Simply looking at how you package and deliver your products and developing an environmentally-friendly approach can bring topline financial benefits and reduce waste in the business.
In looking at the environmental impact of the way BSkyB’s set-top boxes were packaged and transported, Griffith found it was including cables no longer needed for installations. Eliminating these helped reduce the amount of packaging – and as a result saved £600,000.
3 Environmental and social partnerships with your clients can lead to a reappraisal of your brand. Customers will stay with you longer, spend more and generate new business through referrals.
Sky Rides, the traffic-free cycling events BSkyB runs in partnership with British Cycling, are some of the biggest mass sporting events in the UK. Thousands of families across the country are now feeling more favourable towards the company’s brand, says Griffith.
Andrew Griffith is chief financial officer of BSkyB
Alistair Darling and Sir Clive Woodward join our speaker list for the CFO Agenda 2016
EY's analysis is based on 100 annual reports of FTSE 350 companies with September-December 2014 year-ends
Just five per cent clearly articulate their strategy, business model and KPIs, while less than 50% were deemed to be "responsive and therefore deliver a quality mobile experience"
The multi-headed beast that is the annual report now has to juggle strategic report, going concern issues, risk reporting, ensuring better synchronicity between the narrative and financial reporting threads - and be clear