SocialFunds.com

January 09, 2003
Book Review: "The Sustainability Advantage"
by MARK THOMSEN

In a new book written for corporate senior executives, a former IBM manager systematically quantifies the business case for sustainability.

SocialFunds.com — Social investors have been telling companies for years that corporate efforts to improve environmental, social, and economic performance can result in bottom line benefits. Some corporate initiatives to improve this type of performance, such as programs to save energy or reduce waste, yield savings or revenue in terms of dollars and cents. Other programs, however, such those that improve community relations or ensure respect for human rights, offer benefits that are more difficult to translate into numbers. The lack of a comprehensive model for quantifying all the benefits of sustainability has been one of the stumbling blocks that prevent many senior managers from embracing sustainability concepts.

Former IBM executive Bob Willard has taken a major step toward removing that block with his new book "The Sustainability Advantage: Seven Business Case Benefits of a Triple Bottom Line." In it Mr. Willard takes one of the first stabs at systematically quantifying the business case for sustainability. He does this by dividing the benefits of superior environmental, social, and economic corporate performance into seven major categories, and then applying the seven benefits system to a hypothetical high-tech company.

The seven categories defined by Mr. Willard are: easier hiring of the best talent, higher retention of top talent, increasing employee productivity, reduced expenses in manufacturing, reduced expenses at commercial sites, increased revenue/market share, and reduced risk and easier financing.

Mr. Willard presents his material in a highly readable manner and clearly that was one of his goals in writing the book. This is his explanation dividing sustainability benefits into seven categories: "There are many ways to slice and dice the benefits categories. My experience is that a list of seven things is about as much as people can remember."

This disarming writing style is used throughout the book. Some might believe the book would have more credibility if it was a little more sophisticated. But then the book would lose one of its major strengths, which is that it presents all the points for each benefit so clearly that no reader gets lost along the way.

Mr. Willard's hypothetical company is SD Inc., a conglomeration of the top five high-tech companies from 1999. SD Inc.'s 1999 revenues were $44 billion and it has 120,000 employees. For some perspective, IBM and Hewlett-Packard, the top two companies in 1999, had $87 billion and $48 billion in revenue, respectively, and 307,000 employees and 84,000 employees, respectively.

Readers knowledgeable in corporate sustainability could easily find reasons not to use a large, high-tech company as the hypothetical, but Mr. Willard has big game in his sights. Because large companies are, well, large, they have the most opportunity to take the fullest advantage of improving their environmental, social, and economic performance. Also, if the largest companies begin to undertake sustainability initiatives, the collateral positive impact on the global environment and human society will be greatest.

While Mr. Willard cites cases and anecdotes to support individual points within each of the seven benefits, the real utility of this book for executives is the Sustainability Advantage worksheets found in the Appendix. "Executives can insert their own data and assumptions into these worksheets so they can see for themselves whether the business case for aggressively supporting sustainable development is a compelling one for their company," writes the author.

For example, for the higher retention of top talent benefit, Mr. Willard begins with his estimate that it costs SD Inc. $7,000 to recruit a new employee. He then examines the various losses a company faces when it loses an employee, such as the cost of losing a good person and the cost of training a new employee. After estimating how many people would have stayed at SD Inc. if the company had a vibrant sustainable development mission, Mr. Willard concludes that SD Inc. would save $38 million a year by committing to sustainability. The Sustainability Advantage worksheet enables a reader to follow Mr. Willard's example and calculate the potential savings for his or her own company.

Astute executives not entirely familiar with sustainability can use Mr. Willard's book in beginning a comprehensive process for improving their companies' social, environmental, and economic performance. While "The Sustainability Advantage" probably will not be the definitive book on corporate sustainability models five years from now, it nevertheless makes a worthy first step in promoting the systematic implementation of sustainability principles on the corporate level.

The above page was copied with permission from the SocialFunds.com web site.