From February issue, NZ Manufacturer

It’s February and you’ve eleven months to make your manufacturing business more sustainable in the year ahead. These eight tips will help you create (or review) your sustainability strategy – and take action.

Becoming more sustainable adds value to your business

Sustainable businesses are excellent businesses. They create value in the short and long terms. That’s because sustainability is about much more than the environment. It covers every aspect of your business. (See tip 2 below.)

Becoming a more sustainable business will help you reduce costs and risk, strengthen relationships with your suppliers, enter markets and grow market share. You’ll attract talented employees and investment, keep onside with your regulator (if you have one) and build links with local communities. That’s a lot of good reasons to act!

A strategy focuses your efforts

A strategy helps you tackle the right things, in the right order, to make your business more sustainable. While it’s tempting to focus on activities that yield fast, visible results or to do ‘a bit of everything’, you need to prioritise.

For example, if you manufacture a product, tackling your packaging may seem a great place to start. But if your packaging accounts for just 5% of your environmental footprint, there are better ways to use your limited resources. A strategy will help you identify them.

Tips to create your strategy

1. Make sustainability part of your business strategy – not an ‘add-on’

Weave sustainability into everything you do so that acting sustainably becomes ‘how you do business’. For example, work with your suppliers to source lower carbon materials and identify risks of modern slavery. Redesign your product to reduce the energy you use and the carbon you emit. Train your team to cut waste and look to your local community when you fill job vacancies.

2. Look beyond environmental

An effective sustainability programme is like a three-legged stool. The legs of your stool represent three types of issues: environmental (e.g. your business’ contribution to reducing climate change), social (e.g. your team’s health and wellbeing) and economic (e.g. being a financially resilient business).

The seat is your governance (things like policies and processes). All these issues are important and support one another. Take one leg away and your stool is no longer a useful piece of furniture.

3. Focus on what matters

Your business is unique and your strategy should be too. A materiality assessment will help you understand where to focus.

What matters to your stakeholders, including your suppliers, customers, team and community in their relationships with you? Your carbon footprint? Health and safety? Customer service? Employing local people?

What matters to your business? Retaining your top customers? Future-proofing your supply chain? Complying with regulations? Building a skilled workforce?

Bring these issues together and the result is a ‘sweet spot’ – a list of common, priority topics to build your strategy around.

4. Link to the global context

The United Nations Sustainable Development Goals (SDGs) are 17 social, environmental and economic goals to create a better world. Linking your strategy to this ‘big picture’ helps communicate your plans and motivate your team and others to achieve it.

Choose five or six goals that ‘fit’ your business and where you can contribute most. Some goals, such as SDG13 – Climate action, are important for every manufacturer. Other goals will depend on your specific business.

For example, if you make medical equipment, SDG 3 – Good Health and Wellbeing, is likely to be important. If you manufacture building products, SDG 9 – Industry, Innovation and Infrastructure, may be relevant.

5. Set baselines, targets and measures

What gets measured gets managed. Confirm where you are now (your baseline), what you want to achieve (your targets) and how you’ll measure your progress (Key Performance Indicators). Your targets should be SMART: specific, measurable, achievable, relevant and time-bound.

For example, if you want to reduce your carbon emissions, your baseline will be your current carbon footprint. Measure this footprint, set annual targets to reduce it (ideally science-based), and confirm the metrics you’ll use.

Tips to make progress on your strategy

6. Make your strategy practical

Agree a ‘roadmap’ of short-, medium- and long-term actions. Set clear roles, responsibilities and dates.

7. Review your progress regularly

When you review other aspects of your business (e.g. your monthly financial performance), review your sustainability performance too.

7. Revisit your strategy annually

Review your strategy and the ‘building blocks’ it rests on, such as the topics from your materiality assessment. Things change and your business needs to respond.

8. Communicate your strategy

Enlist support from the people who can help you achieve your strategy. Keep them up to date on your progress with clear, concise updates and reports. And tell your sustainability stories. (Nothing’s more motivating than seeing the results of hard work!)

We wish your manufacturing business sustainable success in 2024.

www.thinkstep-anz.com