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Disruptive Business Models: Innovation in Sustainability

by Newsroom

Being sustainable often is a symptom of a well-managed business that inspires its customers.

Exclusive interview with Simon Graham, Head of Innovation, De Courcy Alexander, London

1.Community Index Magazine: We have read a quote of yours in which you stated that “We are in a world of unprecedented change. But this also means a world of unprecedented opportunity”. What are these opportunities and how can big companies embrace them, considering their size and thus difficulty to drive change?

Simon Graham: Change is normal, whether that is the natural or corporate worlds. There are three responses to that change: resist, embrace or lead. There is strong evidence that businesses that go beyond embracing change and look at the opportunities available, and take a leadership role, are the most successful. Often, these companies, the disruptors, start small, but then become very large, and when they do, remaining sufficiently dynamic is a huge challenge. My experience is the best way to keep at the front is to have a culture that allows you to take risks and fail. This can be at an individual level, but also applies to teams or business units. Taking a lead in sustainability can be successful at all levels. Interestingly, Unilever reported last year that what they call their sustainable living brands grew nearly 50% faster than the rest of the business.

2. Community Index Magazine: You have particular expertise helping companies that have no sustainability program become leaders through a combination of innovation and involvement. Can you tell us more about your work in this area?

Simon Graham: I believe that every industry has the opportunity to be sustainable and it only takes a small number of companies, sometimes only one, to show real leadership. These beacon companies are often also the most successful, because being sustainable often is a symptom of a well-managed business that inspires its customers. A potential sustainable leader may be one that has not embraced sustainability by name but is either doing actions that are the foundations of sustainable business without explicitly calling it as such, or is at a stage in its history where it is ripe for the transformation that sustainability brings.

For example, I worked with a company that was hugely successful in its field, with really great staff morale and customer retention. However, what it needed was to understand the values that made it what it was in a wider sense, looking beyond its immediate staff and customers to the wider world. Unleashing that led the business to embrace its responsibility for the wider social and natural environment in a way that made work fun for the staff, brought huge value to customers, transformed suppliers into real partners and took the business to become a nationally recognised leader in sustainable business.

3.Community Index Magazine: Talking about new business models and innovation, how connected are they to sustainable development?

Simon Graham: Two of the truly exciting things about business today are the opportunities to innovate and create disruptive business models. The two are actually interlinked and complementary. A perfect example is the circular economy. The traditional business model of take-make-waste is unsustainable, so we need not just new materials and ways of making things, but also new ways of looking at them.

For example, to remove plastic waste from the ocean, it is not enough just to develop an alternative to plastic. This could easily lead to terrible unintended consequences. Instead we need new business models that help us rethink our consumption. Similar things are happening in transport, energy and even in supply chains, where calls for transparency and action to eliminate scourges like human trafficking and modern slavery require many businesses to change the way they think. All of this can be highly disruptive.

4. Community Index Magazine: Why are investors increasingly looking at companies to be more transparent, and are using a wider range of environmental, social and governance (ESG) criteria when looking at businesses?

Simon Graham: According to our research, most investors are looking for long term successes. The data shows that this aligns well with ESG goals. A long-term successful business is one that cares for its staff, manages its resources without depleting them, creates products and services that endure and create customer loyalty, treats suppliers with respect and fosters an ethical supply chain, understands its responsibility for the wider community and environment.

These are all fundamental sustainable business values. There are a myriad of examples of companies that embraced good carbon management being more resilient in times of recession and growing more rapidly in times of growth, of companies that lead in sustainable innovation growing their market share and those that show sustainable leadership outperforming their competitors. Sometimes this makes it difficult to differentiate between what is good sustainable business practice and what is simply good business practice. This is an area that ESG criteria can be helpful because they also enable a business to look beyond their direct benefits to see the wider value of being sustainable.

5. Community Index Magazine: Achieving Zero Waste is a company goal that many leading businesses have striven for. Tell us about the methodology DCA developed to achieve Zero Waste that is usable by any company of any size.

Simon Graham: Zero Waste is a huge commitment for any business. All well run companies are aware of their waste and the cost not only to the environment, but operationally. Therefore, every good company will have some engagement in reducing, reusing and recycling what they can. However, many see this waste as something that has to go to landfill. Zero Waste means challenging the idea of waste itself. Instead of seeing anything that is discarded as waste that needs to be managed, Zero Waste sees it as a resource that has not yet found a use.

This change in perception means that instead of recycling rubbish, you are thinking of ways to get value from a resource. And people are brilliant at finding ways to get value from resources. So DCA helps companies understand the value of “the things formerly known as waste” and finds ways to eliminate waste completely from their operation. Not only does this have huge environmental benefits, it also can invigorate a company and help it to become something more too.

6.Community Index Magazine: Do you consider a CSR Index a valuable resource for many companies, including investors? What are your arguments?

Simon Graham: For investors, potential employees, customers, anyone looking to understand a market or company, it is often hard to tell which ones are truly living strong positive values. Company reports can be hard to compare, often full of narrative and material that is specific to that particular business. At the same time, to be truly informed about a company’s sustainable performance means going beyond corporate presentations to see behind the story.

This means that issues like transparency are as important as sustainable performance. An independent, credible index which shows which companies are truly leaders in responsible business is invaluable. The index needs to understand the context that companies operate in, what the sustainable challenges are and what constitutes real leadership. I believe that it also gives a chance for companies that aspire to be leaders to challenge themselves to see how they can be better, build the collaborations that drive sustainable innovation and deliver measurable and radical improvements to people, society and the wider world.

The article was first published in the bilingual yearbook Community Index Magazine 2019.

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