Smart firms value real 'green cred'

For many businesses, “green” is little more than a topical buzzword at management level. “Being green” is an attractive accolade, something to tell investors and customers to boost company image and add an aura of positivity to the products they purchase. In the eyes of many business leaders, being green or environmentally sustainable legitimises the wholesome images and ethical assertions dashed through their glossy annual CSR reports.

However, few businesses (a quarter,  according to our recent research) can drum up hard evidence of their green credentials, beyond revealing airline receipts where they opted to offset their carbon footprint, or directing the green-minded enquirer to the recycling bins in the staff kitchen.

It’s genuinely surprising to me how many businesses feel this way. Our research shows that 67 per cent of UK businesses do not have the software systems in place to accurately monitor and report on their overall environmental impact. Tellingly, one in ten (11 per cent) IT decision-makers surveyed didn’t even know if their business is required to comply with environmental law.

Whether we like it or not, being green is an attribute all businesses will need to possess in the very near future, or risk facing a red bill.  One of the coalition government’s main objectives is to transform Britain into a more sustainable society, entailing new legislation and accompanying financial penalties for non-compliance.

Sustainability, environmental or otherwise, is a crucial practice for businesses of all kinds to adopt. No smart business wants waste, because waste equals loss, and loss patently impacts upon profit; a blow all of us seek to soften whilst recovering from recession. Ultimately, sustainability isn’t a chore or a luxury: it’s a necessity.

The delay in businesses registering for the Carbon Reduction Commitment (CRC) Energy Efficiency Scheme demonstrates a widespread lack of awareness of both the green agenda and, more specifically, the systems and procedures required to tackle the monitoring challenges of new environmental legislation. With just days to go until the deadline for registration, the majority of the 20,000 businesses legally required to enlist had not done so. The British Gas Business has calculated that the eligible companies who fail to enroll with the Environment Agency for the scheme could face a combined penalty of £15 million.

Suchitra Padmanabhan, Frost & Sullivan’s programme manager for the European Waste Management Market, puts it well, saying: “Compliance with new regulation has changed the needs of the business community in the UK entirely. Environmental data is increasingly as important and sensitive as financial information and this information needs to be provided in an integrated format alongside the entire operation such that centralised, standardised reports are generated on a regular basis. In the same vein, software to produce this information has gained in importance as effective environmental monitoring and reporting assumes new dimensions of cost and efficiency.”

Ironically, many businesses already have the foundations in place to meet these new reporting demands. The assemblage of businesses that currently utilise Enterprise Resource Planning (ERP) suites for data management may already have the capacity to monitor environmental impact within their current systems. As such, they may quite easily develop additional modules, such as our IFS Eco-footprint Management tool, or enhance existing ones, to integrate green reporting across their business in a cost-effective and efficient manner.

We’ve been saturated with environmental facts in recent years: the world is running out of natural resources to generate heat and power; landfill isn’t a sustainable method of waste management; we must recycle or else. But if these messages haven’t hit home, and you were still under the impression that “green” is just a buzzword, listen to this: your customers and investors now want measurable proof that business is being executed reputably, responsibly and sustainably. In today’s world, green credentials are currency, a tender no one can afford to lose.

Editor’s note: This was a guess commentary by Alastair Sorbie, CEO of IFS, which develops, implements and supplies applications for enterprise resource planning. IFS focusses on customers with strategic needs in service and asset management, manufacturing, supply chain and project processes.