Blog

For your organisation to be sustainable it’ll need to track, manage and control a whole range of processes, compliance and technologies that cost money. Let’s just take;

• employee engagement, bonus schemes, voltage regulation, LED lighting, combined heat and power (CHP), recycling, environmental reporting systems, fuel consumption, business travel, video conferencing, carbon offset, packaging, customer service, market trends, PR, risk analysis, Carbon Reduction Commitment (CRC) reporting, payments and allowances, Climate Change Agreements (CCA), consumer behaviour, greenwash, water consumption, oil versus LPG, pollution, land fill legislation, CSR, solar, wind, smart grids, mobile networks, AMR, biomass, product development……. The list goes on.

Corporate sustainability impacts every part of our organisation, so why do we regard it as the domain of a few environmental specialists? What chance does an Energy, Environment or a Sustainability Manager have to make the difference when there are so many variables and resources to manage? He/she can’t do it on their own. They need your involvement and here are 3 reasons why you in the Finance Department need to be involved;

Reason 1 – capital investments for sustainability can neutralise each others’ gains if not centrally managed. A client (before our involvement) installed an expensive voltage optimisation system which was justified on the basis of to saving ‘many hundreds of thousands’ on the energy bill. A few months later, another sustainability initiative was proposed to replace lighting with LEDs which would save ‘even more hundreds of thousands’. But there was a problem; they couldn’t benefit from the low cost lighting because the newly ‘regulated’ voltage was too low for LEDs to show viable savings.

Result: missed opportunity as one sustainability initiative neutralised another.

Reason 2 – Management reporting needs to adapt to make sustainability initiatives stick. Having found that there was a market for its waste, one of our multi site clients started to operate its own waste sorting operation to maximise the value of the variety of plastics that it once sent to landfill. It now generates £150k annual revenue from an area that used to cost £100k. It succeeded because Finance allocated this money to revenue to the individual sites, rather than as a cost recovery. This inspired each site’s employees, who are on a profit bonus, to look for new ways to generate revenue from waste materials.

Result: from cost centre to revenue generator.

Reason 3 – Environment Management Systems need to be integrated with your financial reporting systems. One of our sustainability initiatives came about because the the system we implemented to provide incentive and track behaviours was incorporated as part of the company’s financial management reporting system. Now, it not only presents the sustainability information in a way that is familiar to senior and middle management but it also draws on other cost information from the accounts to provide a more accurate picture of costs and opportunities. An added benefit is that because it is an extension of an existing system, the implementation costs were small compared to putting in a separate system.

Result: sustainability is seen as part of good business practice rather than some do good, ‘green’ initiative.

It’s time you boys and girls from Finance got involved before ‘sustainability’ overspends its welcome.