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BT- and Cisco-Sponsored Paper Says Sustainability Breeds Innovation and Profitability

"A New Mindset for Corporate Sustainability" emphasizes that a focus on sustainability leads to innovative activities as well as commercial success.

Focusing on sustainability can help businesses innovate and see profits, but it's a concept that has to start with leadership and be part of a company's culture, according to a paper released yesterday.

"A New Mindset for Corporate Sustainability," published by a group of international academic experts and sponsored by BT and Cisco, uses case studies to illustrate the authors' main argument that sustainability can drive commercial success and lead businesses to craft new products and services.

The six experts, from China, Singapore, Spain, the United States and the United Kingdom, utilized innovation in crafting the paper. Instead of traveling internationally to meet, the academics used Cisco's TelePresence video-conferencing system to work together. Some members did meet face-to-face, but the majority of the collaboration was done virtually, saving the authors the time that would have been used traveling as well as preventing travel-related carbon emissions.

"What we have seen is an illustration of what this report is trying to communicate," David Grayson, one of the authors, said at a TelePresence news conference in San Francsico.

Grayson, speaking from London, said using video-conferencing was not only good for the environment, but it saved the cost of traveling, prevented the physical "wear and tear" of air travel, and led to communication between people who never would have met otherwise.

"It’s made it possible to produce something that would have been much, much harder," he said.

Through a series of case studies the report looks at sustainability initiatives and lays out a new approach called S2AVE (Shareholder and Social Added Value with Environmental Restoration), which emphasizes that sustainability increases innovation and argues that sustainability should be an ongoing strategy, not an objective. The paper includes 10 steps a company must take to become sustainability-driven.

The 10 steps are:
1. Make innovating for sustainability part of an overall corporate vision
2. Formulate a strategy with sustainability at its heart
3. Embed sustainability in every part of your business
4. Emphasize actions, not words
5. Set up effective board-level governance to make sustainability matter
6. Set firm rules
7. Bring stakeholders on board by engaging them
8. Use people power through recruitment, staffing, training and rewards
9. Join networks focused on sustainability
10. Think beyond reporting - align all business systems with the company’s sustainability vision

The strategy, Grayson said, is aimed at all businesses, from small to global, manufacturing to service, and in mature to emerging markets.

"It’s a leadership opportunity," said Adrian Godfrey, director of corporate citizenship for Cisco. "We absolutely need to mainstream this practice."

One benefit for companies new to sustainability, Grayson said, is the number of groups and networks that exist and can provide support and examples of what has and has not worked.

"You’re not alone," he said. "You don’t have to do all this from scratch."

The authors also found that more and more stakeholders, from investors and shareholders to customers and employees, are demanding to know what companies are doing to better the world or to lessen their impact on the world.

Sustainability, Grayson said, is no longer something that costs a business money, but is something that can create profits in the long run. In looking at a series of academic studies comparing the corporate social responsibility commitments and profits of companies over the years, the authors of the paper found, in most cases, a positive correlation between CSR commitments and profitability.

One example from Cisco and BT that Godfrey gave was the companies’ LifeLines India program, where farmers in more than 700 rural villages can call a help line for agricultural and veterinary advice for a fee. The farmers leave a message with their question, and receive and answer within 24 hours, Godfrey said.

Since the inception of the program, he said, some farmers are seeing up to 200 percent increase in yield and 150 percent increase in income. The program is a way for the companies to provide a social benefit while taking part in an emerging market.

"The more we can find market solutions, the more we can tackle fundamental issues facing the planet," Grayson said.

That program goes along with the new model proposed by the paper. Businesses need to change their way of thinking about doing good things, Grayson said. The "old model," he said, was for a company to run its businesses in any way and use profits to support environmental groups or do some socially good program.

That’s no longer the case. Everything a company does must be done with the environment, society and shareholders in mind. A company should not focus on one at the expense of the other two, but should instead work to better all three, since they all are intertwined and can benefit one another.

"A New Mindset for Corporate Sustainability" is available for download online with additional resources.

The academics who crafted the report are Professor David Grayson, director of the Doughty Centre for Corporate Responsibility at Cranfield School of Management; Professor Zhouying Jin, director of the Center for Technology Innovation and Strategy Studies of Chinese Academy of Social Sciences and executive director of Future 500 China; Mark Lemon, Ph.D, Centre for Resource Management and Efficiency at Cranfield University; Miguel Ángel Rodriguez, Ph.D, director of the Base of the Pyramid Leaning Lab and lecturer of strategic management at the IESE Business School at Spain’s University of Navarra; Professor Sarah Slaughter, senior lecturer of behavioral and policy sciences at Sloan Management School at Massachusetts Institute of Technology; and Professor Simon Tay of the Singapore Institute of International Affairs at the National University of Singapore.

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