Oracle Corporation UK Ltd. on July 15 launched “Sustainable Performance Management,” research commissioned from the future trends consultancy, The Future Laboratory. This study follows on from the 2008 report “The Shape of Tomorrow’s Supply Chain” and provides an update on attitudes among British business, as well as concentrating on one of key issues measuring and reporting sustainability.

Findings include:

·         Sustainability still a priority: 92 percent of respondents say that it remains a business priority

·         Sustainability is good for business: increasing desire to link sustainability and cost effectiveness with 68% working on sustainability to improve efficiency

·         "Easy wins" still dominate: last year’s survey highlighted cherry picking as a cause for concern, a trend that continues in this survey – 71% are concentrating efforts on lowering waste and 65% cutting energy usage

·         Barriers are complex: company-wide initiatives struggle to gather and interpret data – 53% cite collecting information from internal sources as a major barrier to sustainability reporting

·         Significant aspirations: despite the challenges some organisations are already setting tough goals – 37% want to reduce carbon to zero in the future and 47% intend to report daily on a daily, hourly or continuous basis

·         Sustainability presents business opportunities: The research shows 62% want to allow staff to make better and more sustainable operational decisions and detailed analysis of carbon hotspots can tease out a true picture of supply-chain inefficiencies

The imperative to act is changing – the ‘sweet spot’ between business benefits and sustainability

·         The Futurelab Laboratory study reveals that many other organisations are beginning to focus sustainability as a way to improve their business – a third of respondents already say it helps them to create a clearer picture of their business. They recognise that initiatives such as cutting air freight, promoting video conferencing and slashing energy usage can save money and reduce carbon footprint.

·         When asked for the top five reasons to adopt sustainable strategies respondents said:

o   68% – to gain customer trust

o   68% – to make the business more efficient

o   62% – to allow staff to make better operational decisions

o   56% – to meet new legislative standards

o   46% – to better measure manufacturing processes

·         Combine this with the much lower importance given to sustainability as a way to bolster brand image (38%) and it appears that respondents now realise the difference between a self-serving PR exercise and genuine improvement

·         Additionally 56% of businesses surveyed state increasing climate change-related regulation and standards are a clear stimulus to work on sustainability measures. With the Carbon Reduction Commitment coming into force April 2010, mandating around 5,000 UK firms to report on their carbon emissions and the Climate Change Act potentially enforcing regulation by 2012, more organisations accept the imperative to act is now.

‘Easy wins’ still prevalent, but sizeable groups taking a more sophisticated approach

·         While 92% confirm that sustainability remains a priority there is still a worrying emphasis on measures that experts consider ‘easy wins,’ such as focusing efforts on:

o   Lowering the amount of waste generated by the business – 71%

o   Using water/electricity/gas more efficiently – 65%

o   Implementing a recycling system – 49%

·         However, drilling into the statistics a little more closely reveals some encouraging signs:

o   59% have set tough goals to reduce energy usage with two thirds of these planning to make 20% cuts in the next five years

·         Additionally, a good percentage of respondents appear to be taking a more enterprise-wide approach:

o   37% are reducing logistics costs by collaborating with suppliers

o   33% are using IT to create a picture of the environmental impact across the organisation

o   26% are arming employees with information to make choices around sustainability

The barriers: beyond the spreadsheet, a lack of standards and employee engagement

·         Companies surveyed are very frank about the difficulties of finding, collating and analysing data relevant to sustainability, even before trying to make accurate decisions based on that data:

o   53% cite an ability to collect data from internal sources as a major barrier to effective sustainability reporting

o   33% rank data collation and 45% rank presentation as very difficult

·         Furthermore, the IT tools used to manage sustainability data are remarkably basic:

o   53% rely on spreadsheets to collect data

o   47% rely on spreadsheets to present data

·         In fact 29% of companies admit their main concern is merely to gain an understanding of their carbon footprint, which suggests a good number are struggling to identify a straight forward process to follow

·         Added to this 61% say a lack of uniform industry, government or consumer benchmarks is holding back progress and 57% admit it is slowed by the employees’ lack of understanding of sustainability, as well as their inability to make informed choices

·         Clearly this data underlines the value of a more sophisticated approach to data collation, management and analysis as key to giving organisations flexibility to leverage the right information at the right time to make the right decisions

Aspirations: Reasons to be cheerful about emerging strategies

·         While the majority of respondents appear to have quite a narrow focus similar to last year’s results, there is a good percentage of companies that are considering more wide ranging strategies and tougher targets

·         The research has shown:

o   37% want to reduce their carbon footprint to zero in the future

o   24% plan to achieve this by becoming carbon neutral, i.e. balancing their carbon emissions with offsets

o   24% want to lower their emissions

·         When combined with the sizeable group that want more regularly daily reporting and the 63% who want to report on sustainability using detailed or in-depth results, there are reasons to be positive.

Opportunities: Employee engagement and accurate data analysis lead to better sustainability strategies

·         While a vast majority of respondents want employees to take greater ownership of sustainability it is clear companies are yet to provide staff with the information they need – 57% suggest that the lack of information is hampering employees ability to make more informed choices

·         Clearly with access to better information and the right training staff will be in a much better position to respond

Success is integrating sustainability into day-to-day decision making

·         The combination of scientific, societal and political pressures means this issue is going to remain an important challenge to face. In fact some commentators have suggested that as funding for the ‘incentives carrot’ becomes less available the threat of the ‘regulatory stick’ may become the primary tool to drive change

·         Given these realities it is clear that companies recognise the importance of sustainability as a business priority and more of them are beginning to explore sophisticated environmental strategies

·         It does require a more rigorous approach, which includes:

o   Understanding the stakeholder environment

o   Assessing market opportunities

o   Strategising on the right model for an individual business

o   Creating a plan

o   Monitoring the business and analysing deviations from goals

o   Reporting your business results

Supporting Resources

Applications to Enable an Eco-Enterprise

Greening the Supply-Chain

Green Compliance

Oracle’s Solutions for Sustainability Reporting

'Enable the Eco-Enterprise' Awards

The Shape of Tomorrow’s Supply Chain: 2008 Future Laboratory Research

The Future Laboratory