Posted by: Scot Petersen
ROI, ROS, strategy, sustainability, sustainable
Adam Werbach is Global CEO of Saatchi & Saatchi S, a sustainability agency, and author of a new book, Strategy for Sustainability. Werbach writes that, “sustainability initiative(s) must be core to the business—bold, not bolted on.” In this email interview, he expands on IT’s role as a primary driver for sustainable business, and adds that, despite voluntary initiatives, “eventually, all businesses will be regulated into compliance.”
Is information technology, including the people, hardware, software and processes, going to be the primary driver for developing sustainable business practices, or one of many tools toward that end?
Adam Werbach: IT is a critical enabler to a more sustainable enterprise. The first characteristic of a sustainable business is that it’s transparent. Transparency means getting salient metrics widely spread into the organization. The IT function can play an essential role in this sort of transparency. There are also direct benefits in energy savings, telecommuting, and logistics efficiency support that IT can aid.
What is the best role for IT in a sustainability strategy?
AW: Convener. Building a sustainable organization requires the creation of cross-functional network, where non-traditional authority can solve systemic problems. Since IT crosses all divisions, it sits in a perfect location to bring groups together for design charrettes.
Do you envision sustainability managers being able to “model” capital expenditures around sustainability in the same way the finance department develops net present value models for everything else? In other words, will companies be able to determine ROS (return on sustainability) for sustainable initiatives?
AW: Absolutely. In most cases sustainability investments will simply be blended into existing capital programs. Some companies have lowered the hurdle rate for investments connected to clean energy for examples, as a means of hedging against future price spikes in energy or the public relations value of the investment. In this case the bar is lowered because of broader corporate benefits.
Will such ROS calculations be built only around cost savings or can sustainable practices actually make money for a company?
The best topline opportunities right now exist in the expansion of a product to a new consumer (or B2B) customer base. There are an exceedingly large number of companies and consumers that are adding sustainability as a primary or secondary buying attribute. Eventually, all businesses will be regulated into compliance, but right now companies that are leading the pack are gaining new customers.