What It Is
A business case for sustainability attempts to prove that decreasing a company’s environmental impact increases its social impact, as well as its profits. Making a business case for sustainability requires
- Finding data, such as financial reports or case studies, that support the link between sustainability and strong business
- Organizing that data into a clear and concise argument
- Using your findings to persuade someone (e.g., a stakeholder, manager, council member) that embracing sustainability will benefit his/her organization
Making the business case may also include back-of-the-envelope financial calculations related to investments in sustainability, such as calculating the payback period for new initiatives.
Why It Matters
Helps with Strategizing
Because it outlines sustainable practices and benefits, a business case for sustainability can help improve an organization’s overall strategic approach to going green.
A strong business case (i.e., one that shows the link between sustainability and success) or data that demonstrates positive outcomes can increase buy-in from all levels of the organization. This will make it easier for the organization to incorporate sustainability in the future. Moreover, it’s smart business to know the impact of investments.
Will Improve Business Now and in the Future
The Business Case for Being a Responsible Business states that sustainable businesses see improvements in the following areas:
- Brand value and reputation
- Employees and future workforce
- Operational effectiveness
- Risk reduction and management
- Direct financial impact
- Organizational growth
- Business opportunity
Furthermore, Ceres, a leading investor and environmental organization, states,
There is increasing interest from mainstream investors to understand and evaluate sustainability risks and opportunities in their investment decisions. The best performing companies of the 21st century will be those that recognize the opportunities presented, and invest and act now.
Given this, business leaders need to understand the link between sustainability and business in order to stay current. They also need to learn how best to convey this information to their stakeholders and partners.
To make an initial business case for sustainability
- Step One: Examine why some businesses embrace sustainability and others don’t
- Step Two: Consider how sustainability relates to your business or the business you’re pitching to
Step One: Examine Why
Understand why some businesses embrace sustainability and why others dismiss it. This can help you build a persuasive, fact-based case for sustainability. The following drivers often persuade business leaders to incorporate sustainability into their organizations:
- Pressure: Regulations or advocacy groups compel the business to go green.
- Values: Sustainability marries well with the organization’s principles.
- Strategy: Sustainability supports or enhances a key, long-term business strategy.
In contrast, business leaders are often skeptical about cases for sustainability because of:
- Data: Some reports use opinions or statistics that are inaccurate or irrelevant to business.
- Sources: Business leaders prefer to hear relevant case studies as opposed to general statistics.
- Attitudes: Sometimes sustainability challenges an organization’s underlying attitudes or political agendas.
Step Two: Consider How
Consider how sustainability fits into your business or the business you’re pitching to. There is no ‘one size fits all’ business case, so tailor your case to the particular business in question. For example, a 24-hour restaurant could include energy-efficient lighting in its business case. Using CFLs and LEDs would reduce the cost of running the lights all night long.
Stakeholders often resist sustainability, which can mean trouble for those trying to incorporate it into a business model. Ulrich Steger’s Inside the Mind of a Stakeholder can help you better understand how stakeholders make decisions, allowing you to troubleshoot your case. Furthermore, the Disbeliever’s Scorecard, a tool for evaluating data, can help you determine if a resistant person will find your data persuasive. You will find the scorecard on page 13 of this PDF.
Once your organization has enough buy-in to get its sustainability initiatives started, religiously track outcomes. For example, an investment in LED lighting might reduce electricity bills by $200 per month and pay for itself in two years.
Since most sustainability initiatives require an initial investment, the most common tool for expressing the return on investment for sustainability is the payback period, an expression of how much time it takes for an investment to pay for itself. Some sustainability changes are behavioral (i.e. requiring no initial investment) and might best be expressed in terms of savings. Another relevant metric to track could be the rate of employee turnover or satisfaction. Though perhaps not tied to any one sustainability investment, it can also be useful to track the number of new accounts or revenue gained from a commitment to sustainability.
Demonstrating responsible management of your organization’s capital use in sustainability initiatives makes funding more likely down the road and can be a point of pride and inspiration.
Know with whom you are talking.
Spend as much time as possible listening to the businessperson (e.g., stakeholder, manager). Make sure you understand what he/she does in the business, whom he/she has to persuade, what key objections he/she anticipates facing.
Be an insider.
Weiser and Zadek recommend that “even if you know little about the business, be sure that you come armed with insider examples of other companies.” Try to think about the issue from the businessperson’s perspective. What kind of examples will he/she find most compelling?
Be skeptical first.
Dig deeper to ensure that the case studies, reports, or analyses you read are based in fact, not opinion.
Help solve their problems, not yours.
Consider yourself a resource, helping the businessperson to navigate the barriers between his/her business and sustainability.
Don’t preach about the importance of sustainability, as this might make the person less inclined to listen to you.
- The Sustainability Advantage: Seven Business Case Benefits of a Triple Bottom Line by Bob Willard
- The Sustainability Handbook by William Blackburn
- The Business Case for Sustainability (5 Part Series) by MSA Professional Services Inc.
- Triple Your Bottom Line: The Business Case for Sustainability by Margie Flynn of BrownFlynn
- The 21st Century Corporation: The Ceres Roadmap for Sustainability by Ceres. The report lists extensive resources on stakeholder engagement, operations, etc. starting on page 77.
- Greening Your Business, a collection of helpful tips from COSE
- How to Build a Business Case for Sustainability: Four Tips on Getting Buy-In from Finance by GreenBiz
- Seven Sustainability Lessons from Embracers by Green Plus
Use accurate data and relevant case studies to build your initial business case for sustainability. Tailor your case to the specific business in question, as there is no “one size fits all” business case. Track relevant measures – such as payback periods, savings, employee turnover and satisfaction, and new accounts or revenue – once you’ve launched sustainability initiatives to demonstrate impact.
 Oliver Salzmann, Aileen Ionescu-Somers, and Ulrich Steger, “The Sustainable Business Case: Literature Review and Research Options,” European Management Journal 23, no.1 (2005): 27. Available in full at: http://f2.washington.edu/fm/sites/default/files/Business%20Case%20for%20CSR%20Literature%20Review.pdf
 David Grayson and Stephen Howard, “The Business Case for Being a Responsible Business,” Business in the Community, March 2011, http://www.bitc.org.uk/resources/publications/the_business_case.html, accessed 8 August 2013.
 “The Ceres Roadmap for Sustainability,” Ceres, http://www.ceres.org/company-network/ceres-roadmap, accessed 8 August 2013.
 John Weiser and Simon Zadek, Conversations with Disbelievers: Persuading Companies to Address Social Changes (The Ford Foundation, 2000): 7. Available in full at: http://www.zadek.net/wp-content/uploads/2011/02/Conversations-with-Disbelievers_November2000.pdf
 John Weiser and Simon Zadek, Conversations with Disbelievers: Persuading Companies to Address Social Changes (The Ford Foundation, 2000): 8-12. Available in full at: http://www.zadek.net/wp-content/uploads/2011/02/Conversations-with-Disbelievers_November2000.pdf
 David Bent, “Six Key Lessons on Mapping Out a Business Case for Sustainability Initiatives,” GreenBiz, 20 October 2009, http://www.greenbiz.com/blog/2009/10/20/six-key-lessons-mapping-out-business-case-sustainability-initiatives, accessed 8 August 2013.
 Ulrich Steger, “Inside the Mind of a Stakeholder (Executive Summary),” (2006), 2, http://www.imd.org/research/centers/csm/upload/Executive%20summary%20-%20Stakeholder%20book.pdf, accessed 8 August 2013.
 John Weiser and Simon Zadek, Conversations with Disbelievers: Persuading Companies to Address Social Changes (The Ford Foundation, 2000): 12-13. Available in full at: http://www.zadek.net/wp-content/uploads/2011/02/Conversations-with-Disbelievers_November2000.pdf