Sustainability: Canada’s Strengths and Weaknesses

by | May 29, 2013

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A large scale study by OfficeMax Grand & Toy comparing Canadian companies to their world peers finds Canada leads in capturing cost reduction from sustainability initiatives but lags global leaders in driving profitability through collaboration. Broader collaborations with customers, suppliers, government and policy makers may be a key to unlocking the next phase’s rewards.

Conducted by research intelligence firm Leger and co-written by OfficeMax Grand & Toy, the Canadian study asks questions similar to those in the global study conducted by MIT Sloan Management Review and the Boston Consulting Group. Both studies involve large scale surveys and live interviews with practitioners, from Canada and worldwide respectively, in large enterprises across all industries. Comparing the results of these two studies uncover just how Canada is performing and how they rate against their worldwide counterparts.

Canada leads in capturing profitability from sustainability initiatives. When I think of sustainability as a business strategy, it can be used to drive revenue or reduce expense. It turns out Canada is a leader in applying sustainability to the latter. Two departments, Operations and Procurement/Supply Chain, often take the lead to drive the process. Opportunities are uncovered to increase operational efficiencies and lower costs, delivering bottom line benefits through sustainability initiatives. Cost cutting is also perhaps the easiest way to get executive buy-in for sustainability, which is a key ingredient to success.

The MIT study defines the “sustainability tipping point” as “the point at which a substantial portion of organizations are not only seeing the need for sustainable business practices but are also deriving financial benefits from these activities”. The Canadian survey suggests Canada has already reached this “tipping point”.

Over-emphasis on cost reduction may, however, limit future success. One of the more remarkable findings—and there are many in the sixteen-page report which I encourage you to read in full—are the top three sustainability drivers identified by respondents. Canadians largely cited operational efficiency and cost reduction as their top driver. Customer demand and organizational reputation are the distance second and third drivers. Their global peers see things quite differently. The McKinsey & Company survey “The Business of Sustainability” found three equal top drivers for companies worldwide: operational efficiency and cost reduction; organizational reputation; alignment with the company’s business goals, mission, or values.

“What we’re seeing in Canada is a sustainability approach that emphasizes business efficiencies or cost reductions. The advantage to this is that Canadian organizations are among the global leaders in driving profitability from sustainability,” said Warren Shiau, senior researcher and co-author of the Canadian report. “In the long term however, these organizations may face challenges as they try to extend sustainability adoption into other areas of the business where positive impact is harder to measure.”

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