By Stina Nilsson, Engagement Manager at GES
As world leaders are struggling to agree on a set of Sustainable Developments Goals (SDGs) at the Rio+20 summit, I am attending one of the numerous side events surrounding the meeting. The two-day conference hosted by International Institute for Environment and Development (IIED) brings together NGOs, business and governmental representatives. One of the main themes during the conference has been to explore sustainable business models and to put forward this as a way to realise SDGs.
One interesting such business model is presented by Ruud van Eck, Director of Diligent Energy Systems. In Tanzania his company is sourcing jatropha seeds from small-scale farmers and uses it to produce, among other things, biofuels and candles. As large scale jatropha plantations have proved to have profitability difficulties, the small-scale model was deliberately chosen. By setting up a system where the farmers are producing jatropha in addition to food production, extra income is created, livelihood is secured and renewable energy is produced.
Unilever is also present at one of the many panels, describing how it has worked to integrate sustainability issues into its business model. As Karen Hamilton, Vice President of Global Sustainability at Unilever, states ‘Sustainability efforts are not only about risk management for Unilever, it is also about creating new business cases’. She continues by sharing the interesting fact that Unilever’s brands for which sustainability efforts have been integrated into the complete product life cycle have increased more than its other “conventional” products.
At another seminar the mining company Goldfields is stressing the importance of the social side of creating sustainable business models. Nick Holland, CEO of the company states that incorporating local communities into mining development processes is inevitable. To make his point clear, he gives examples of where operations were never developed because of strong resistance from local communities. Furthermore, he states that governance structures are keys to mainstream sustainable business models through complete industries. He mentions the free, prior and informed consent principle as an important such “governance tool” within the mining sector. Finally he states that civil society can contribute by setting up benchmark models, which he believes are good incentives for companies to develop sustainable business models.
What unites these examples is that they are all proof of where sustainability is adding value. Being a responsible corporation is in these cases not an add-on to business as usual, but rather about creating a new kind of sustainable and profitable business case. Sustainability is turned into an opportunity, not an extra cost. This is of course also positive from an investor point of view. Even more so from a responsible investor’s point of view. While the examples may not be perfect, they do show that sustainability and profitability can be mutually beneficial. It is also a reminder of the value that continuous engagement with companies lagging behind can bring, and that benchmark models based on international norms are important tools to be used in such engagement efforts. By learning from the examples, more business cases can be created and contribute to the realisation of the Sustainable Development Goals.