We live in a world plagued by extreme weather events. Yet, as a general rule (and there are some outstanding exceptions), the world of business still hasn't woken up to the threat of climate change. All too often the sustainability team or programme is a side-lined function and very much seen as a 'nice to do.'
I can see why it happens. There is a perception (an incorrect one!) that going green costs more and therefore balance sheet pressures dictate going with the status quo of doing business.
Our view couldn't be more different. We believe that sustainability is both a moral and commercial imperative.
There is a business case for going green, and after seven years of following our own sustainability programme, we have a good case study to share.
In the short-term, it is about insulating your business from cost pressures; in the longer-term, a more sophisticated business case has emerged, predicated on opportunity, innovation and new revenue streams.
Seven years ago we set aside a massive £200 million for a five year initiative called Plan A, an eco and ethical programme that pledged to transform M&S by changing the way it did business. The environment and the right way to do business would be built into every decision made at the company and we set 100 bold targets to be achieved by 2012 including becoming carbon neutral, sending no waste to landfill and ensure that key raw materials come from the most sustainable sources available.
In only its second year, it became clear that Plan A was delivering significant cost benefits. To add to that it was opening up new revenue streams that were taking off. In year three it returned a net benefit to the business, or profit if you like, and has delivered one every year since. Last year the net benefit was £145 million and over the seven years in total, the benefit is £435 million.
That's £435 million that M&S would either have had to find from elsewhere or simply would not have had in the first place. The savings we're making include being more energy efficient, using less fuel, recycling and reusing clothes hangers, reducing waste, using less packaging etc etc.
But it's not just financial savings; we are seeing many other benefits such as increased staff motivation, brand enhancement and supply chain resiliency to name a few.
We're not the only company with a great business case story to tell. Companies like Walmart, O2, Unilever and Nike also understand the green imperative commercially and have embarked on their own eco-ethical journeys.
And, if you're reading this and thinking, that's all well and good for M&S, but what about small and medium sized companies? It's not the preserve of big businesses like us.
Our suppliers -- many of them small businesses -- are also getting involved in Plan A and making their businesses more efficient and more profitable. Take West Mill, a hosiery factory in Belper, Derbyshire, which was on the brink of closure a few years ago. Now it has turned its fortunes around by controlling its energy use, slashing £2 million from its annual bills. It was awarded eco-factory status by M&S meaning that every product produced at the factory can be labelled as having a Plan A attribute -- boosting the marketing power of the factory's products.
Going forward, as a consequence of interconnected opportunities and risks, business models will be disrupted by sustainability for the first time. We can't monetise the long-term business benefit but our use of the word 'disruption' highlights just how crucial we believe the business case for sustainability will become in the future. At M&S we're very clear the purpose of our business is to enhance lives everyday. And by doing this we will prosper.
That's why we've developed the next stage of our plan -- Plan A 2020, which aims to help accelerate our sustainability efforts. It's organised around four pillars -- Inspiration, In Touch, Integrity and Innovation, and supports our aspiration to become the world's most sustainable major retailer.
I call on every other business to not wait for the future to happen, but to proactively create it -- developing their own sustainable business plan, setting out, amongst other priorities, how they will promote wellbeing, sustain nature, take account of environmental and social impacts and be transparent.
Each plan needs to be adapted to their specific industry challenge and opportunities. It needs to inspire and mobilise everyone in the organisation. There are clearly huge challenges and headwinds ahead, but a sustainable business plan is the first step to realising opportunities and shifting to a new way of doing business, fit for the future.