The Need for Collaborative Sustainable Development Planning

by | Jun 8, 2011

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We await the day when corporate sustainability becomes less insular and more inclusive.  Wouldn’t it be great if our companies’ green initiatives could be more like those group exercise and circuit training gyms?  We let down our guards, set measurable and attainable goals and just do what we can to help each other achieve them. Instead of shedding pounds, though, we would resolve to increase organizational recycling rates or perhaps decrease water consumption.

After all, isn’t green business all of our business?  Dialogue only seems right, as the impact of our resource production certainly transcends the walls of our companies and impacts people everywhere – now and into the future.  In recent times, U.S. corporations have made noticeable strides providing greater transparency in how their past activities affected the environment and in what they did to reduce, re-use and recycle.  According to SIRAN’s research of S&P 100 firms, the use of sustainability reports has climbed steadily over the past several years, and the percentage of firms citing sustainability figures on their websites more than doubled between 2004 and 2009 to account for 93 percent of the list.

Yet, as we all know, reporting and planning aren’t one and the same. End results of sustainability may look good when we review on paper, but devoid of the context of goals and obstacles, they’re hard to fully appreciate.

Despite our 45+ years of history and a true sense that sustainable business has always been a part of our DNA, the company I work for, Cascades, didn’t release a forward-looking sustainable development plan until last month. Formerly, the company released an annual sustainable report, but decided to add 18 key performance indicators this year.  The result and the process are impressive, but many companies wonder: why voluntarily subject yourself to greater scrutiny when there’s already such a plethora of required and regulated reporting?

The University of Washington Foster School of Business’ research report “Is Silent Golden: An Empirical Analysis of Firms that Stop Giving Quarterly Earnings Guidance” sheds light on a common debate related to financial reporting.  Is providing quarterly estimated earnings per share (EPS) a good thing for companies, or does it force them into myopic vision where the big picture is overlooked?  The report analyzed companies who publicly renounced quarterly EPS forecasts subsequent to the SEC’s Regulation FD rules, which escalated full disclosure practice and liabilities.

The takeaway?  Surprisingly, not only did those companies who halted their earnings estimates have trailing stock return performance and lower ownership rates, they had poorer prospects for future performance!

While the research analyzed only the “profit” portion of the triple bottom line, of course, one can’t help but wonder if the same principle holds true when it comes to publishing organizational goals surrounding “people” and “planet” too. Is it possible that by transparently stating our green goals on display next to our achievements, we become more successful?

And while we’re asking questions, why the need for such secrecy?

This example clearly illustrates business success – whether environment-related, earnings-related or both – isn’t meant to be conducted in isolation.  Seems like companies, as permitted by law, should approach matters holistically to include financial and non-financial trends, industry-specific information, key factors that drive value for the company, quantitative information on relevant business measures and long-term vision and strategy.  Establishing two-way communication is also important, and the recent proliferation and popularity of social networks, interactive forums and other so-called Web 2.0 tools have made this more possible than ever before.

In our own case, Cascades’ recent sustainability development plan was made available for download on our website.  We also posted it on our SUSTAIN blog to encourage further stakeholder feedback.  Moreover, the plan was fundamentally based on consultation with a wide variety of stakeholders, including customers, suppliers, investors and 120 non-governmental organizations (NGOs).  The process, while nontraditional, was quite productive and positive; beyond describing notable sustainability achievements, the company now has an ongoing guidepost of measureable objectives that everyone can get behind because they’re predicated on consistent performance indicators and molded by stakeholder input. We hope that this collaborative approach to sustainable development planning will serve as a model for other companies who want to be forward-looking in their SD planning.

With any luck, that discussion will be in the true spirit of collaboration and holding ourselves up to an attainable, yet challenging standard.  Here’s to pushing each other towards accomplishing meaningful goals!

Steve Ott is the Sustainable Business Development Manager for Cascades Tissue Group’s U.S. Away-From-Home Division in Waterford, New York, and a recurring contributor to the company’s blog, SUSTAIN: The Professional Forum for Sustainable Towel and Tissue. Cascades Tissue, a division of Cascades Inc., sells the North River line of environmentally preferable towel and tissue products, which are composed entirely of recycled paper and mostly from post-consumer material and are produced using Green-e certified wind energy and 80 percent less water than the North American paper industry average. Steve can be reached at [email protected] or (518) 880-3678.

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