Duurzaam rendement

Goed doen werkt. Goed doen loont. Zo eindigt elke Hollywood-film. Waarom zou het in de ‘echte wereld’ eigenlijk anders zijn? Loont het voor bedrijven om goed te doen, duurzaam te opereren? Bestaat er zoiets als ‘Duurzaam rendement’ (“Return on Sustainability”).

Winstgevend zijn is essentieel voor elk bedrijf. Want duurzaamheid gaat over het ‘oneindig divers en productief blijven’, en een gezonde winst maakt dat mogelijk. Succesvol verduurzamen komt met een positieve impact op Planet, People, Profit en Participation (de 4P’s). Al onze klanten en cases zien dit terug: goed verduurzamen zorgt voor vooruitgang op alle 4P’s, inclusief winstgevendheid.

Soms is dat verband meteen duidelijk: nieuwe business-modellen waardoor inkomsten (en/of marges) groeien; het verminderen van energiegebruik of het economisch(er) benutten van reststromen. Soms is er zeker effect op winstgevendheid, maar niet direct zichtbaar. Denk aan een hogere (investeerders)waardering, een lager risico-profiel of een aantrekkelijker ‘recruitment’ profiel als werkgever voor het aantrekken en behouden van talent.

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Return on Sustainability can be expressed as:

Where impact can be seen on the 4P levels:

For a company to achieve a positive Return on Sustainability, its efforts must have a positive impact on Planet, People, Profit and Participation. In some cases a company’s action may only have a positive impact on one or two of these ‘P’s’. For instance; when a company is focusing on labour conditions in its supply chain, there is a positive impact to be expected for People, but no impact on Planet. But a positive RoS can only be achieved if the following is realised:

  • 1). A positive impact on Planet, People or Participation may not have a structural negative impact on the others
  • 2). There must always be a positive impact on a Profit level, either immediately or within the foreseeable future

Making the ‘right’ trade-offs here can be a challenge. Quantifying these elements, too. Especially if you are trying to predict future success (looking back is always easier). We help you solve this challenge by looking for the right impact drivers. This is particularly helpful in the Profit domain, since most business decisions hinge on this.. We have captured this in the 7R model.

Maar waar liggen concrete kansen voor jouw bedrijf? Doe de zelf-scan om snel te achterhalen waar je Duurzaam Rendement ligt!

Timing is alles. Maar wanneer pak je duurzaamheid het best aan? Met deze quickscan kom je er eenvoudig achter hoe urgent het thema is in jullie specifieke context.

Hoe meet je volhoudbaar success?

Wij gebruiken het ‘7R-model’ om de effecten van activiteiten en voortgang op duurzaamheid op winstgevendheid in kaart te brengen. Wellicht worden initiatieven gestart met als oogmerk om positieve impact op Planet, People of Participation te bereiken (bijvoorbeeld: levering van hout uit duurzaam beheerde bossen). Dat is prima, EN wij stellen dat er ook altijd een Profit-aspect heeft te zijn (direct of indirect). Anders is het in een zakelijke context niet volhoudbaar voor de langere termijn. We helpen je graag dit te ontdekken voor jouw organisatie. Zie hieronder een introductie voor de 7R’s

Het financieel resultaat van een bedrijf dat succesvol verduurzaamt is te beschrijven met de 7R’s:

Modern supply chains are global, and are therefore vulnerable to natural disasters and civil unrest. Climate change, water scarcity, and poor labor conditions in much of the world increase the risk. McKinsey reports that the value at stake from sustainability concerns can be as a high as 70% of earnings before interest, taxes, depreciation, and amortization.
In the largest study on climate change data and corporations, 8,000 supplier companies (selling to 75 multinationals) reported on their level of climate risk. Of the respondents, 72% said that climate change presents risks that could significantly impact their operations, revenue, or expenditures (Harvard Business Review)

Companies that are not operating sustainably face two types of Risks:

  1. Stranded assets – some companies have assets on their balance sheet that are heavily dependent on ecosystem services. This means that these assets can become liabilities if ecosystems are further impacted by for instance climate change or loss of biodiversity. In the Netherlands it is estimated that pension funds have €510 billion euros worth of investments that are currently at risk of becoming stranded assets (in Dutch).
  2. Revenues at risk – the transition towards more sustainable business is a risk for laggards. As more and more companies are adopting sustainability as a core strategic driver for lasting success, the bar is being raised for their competitors. Not acting in time or accurately can lead to revenue losses.

Our cases:

The value of a good reputation is not easy to measure. In a way, a company’s reputation is the intangible asset of brand equity. The value of a reputation is best measured in hard times. For instance, during the 2008 recession, companies with superior environmental performance experienced lower cost of debt by 40-45 basis points. In other words: because these companies operated in a sustainable manner, their financers trusted them more, resulting in a lower cost of debt.

Our cases:

Resilience is a characteristic of healthy companies (and ecosystems, by the way). Sustainable companies have the ability to survive system shocks such as climate events better than ‘normal’ companies. But also financial crises appear to have a milder impact on sustainable companies. This is primarily caused by better value chain and stakeholder management.

During the 2008 recession, companies committed to sustainability practices achieved “above average” performance in the financial markets, translating into an average of $650 million in

incremental market capitalization per company. Additionally, companies with superior environmental performance experienced lower cost of debt by 40-45 basis points.

More recently, during the first months of the corona crisis, the top quartile most sustainable companies were hit less violently than the bottom quartile (least sustainable companies). In the period February 17th 2020 to 23rd March of the same year, the most sustainable companies lost 29% in share value. The least sustainable companies lost 38% in share value. And when the markets started to bounce back (period 23rd March till April 17th) the most sustainable companies grew their share value with 19% versus the 17% of the least sustainable companies.

Our cases:

How Verstegen managed to mitigate supply chain issues during the Corona crisis, by building partnerships throughout the chain (and found win-win solutions for their production challenges)

A more sustainable business model can help boost a company’s financial performance. Whether the revenues come from adapting to changing customer demands in existing markets, entering new growth markets, or by adopting new (circular / regenerative) business models– sustainability pays off. Companies can also charge higher price premiums based on positive corporate responsibility performance. These premiums can structurally reach 20%, depending on the sector.

A focus on sustainability can also unlock opportunities for process and logistics savings. WalMart, for example, aimed to double fleet efficiency between 2005 and 2015 through better routing, truck loading, driver training, and advanced technologies. By the end of 2014, they had improved fuel efficiency approximately 87% compared to the 2005 baseline. In that year, these improvements resulted in 15,000 metric tons of CO2 emissions avoided and savings of nearly $11 million.

Our cases:

  • How Ørsted Accelerated its market capitalization,with stable EBIT, by 250%
  • How the Pure Goat Company managed to create a new product category by using only sustainable ingredients for their infant formula
  • How Van Straten Medical is growing their business by re-inventing themselves to offer a circular solution model

These is tremendous impact to be made on the cost side of the business. Significant cost reductions can result from improving operational efficiency through better management of natural resources like water and energy, as well as minimizing waste. One study estimated that companies experience an average internal rate of return of 27% to 80% on their low carbon investments. In 2013, GE had reduced greenhouse gas emissions by 32% and water use by 45% compared to 2004 and 2006 baselines, respectively, resulting in $300 million in savings.

In a fully circular model, waste is not present – just like in nature. This triggers an incredible resource efficiency that is beneficial to both customer and producer. In a circular model all material is re-used, repaired, or recycled. In that order, as this makes full use of the materials at hand.

Our cases:

  • How Van Straten Medical managed to cut the costs for their clients with up to 75%, whilst improving their own margin and market share
  • How Lono Côte d’Ivoire is using the greatest freely available waste stream as a valuable resource for an entire country (link).

Much of the strategic value of sustainability comes from the need to continually talk with and learn from key stakeholders. Through regular dialogue with stakeholders and continual iteration, a company with a sustainability agenda is better positioned to anticipate and react to economic, social, environmental, and regulatory changes as they arise. More importantly: the frontrunners in integrating sustainability into their business models will find increased efficiency in adapting new regulations and avoiding fines and penalties, as they tent to be ahead of the curve. In some cases, the frontrunners will determine the new industry norm of are asked to help create the new legislation.

Our cases:

  • How Van Straten Medical is creating the blueprint for legislation due to it’s frontrunner role in circularity.
  • How Yoni raised the bar on open and honest communication in a very traditional market.

A company’s performance on sustainability impacts it’s recruitment efficiency. Both in hiring new talents and retaining inhouse talents. Studies show that firms with greater corporate responsibility performance can reduce average turnover over time by 25-50%. It can also reduce annual quit rates by 3-3.5%, saving replacement costs up to 90%-200% of an employee’s annual salary for each retained position.

But more importantly, firms that moved towards a more sustainable business model (sometimes even by ‘merely’ adopting environmental standards) have seen a 16% increase in productivity over firms that did not adopt sustainability practices. Effectively this gives you a free day of work per week, per employee.

Our cases:

How Verstegen moved from a traditional family business, struggling to attract new talent, to a preferred employer brand as a result of their sustainability progression.

Wat levert het me op?

Wij zien het telkens weer: bedrijven die duurzaamheid als strategisch thema benutten plukken er de vruchten van. Blijvend. Door de volgende 4 stappen te doorlopen, lukt het bedrijven om ‘goed doen’ te combineren met ‘goede business’

Duurzaamheid oppakken en versnellen: wat is het voor ons, wat gaat het opleveren en waar beginnen we op weg naar meer impact?. Ontdek meer.

Actie kiezen, impact meten en tractie delen: maak meters en laat de impact ervan zien, intern en extern. Ontdek meer .

Strategische vraagstukken oplossen: op een volhoudbare manier je uitdagingen voor volhoudbaar succes oplossen, bijv. innovatie, inkoop (MVI), leiderschap of circulariteit. Ontdek meer.

Voorop blijven lopen: je hebt succes met verduurzamen, hoe houdt je dit vol en breidt je de impact nog verder uit? Onze aanpak voor integraal verduurzamen is gericht op pioniers en koplopers. Ontdek meer.