VIDEO
Tieto Sustainability Intelligence Services
Sustainability in Services and General Office Practices
Service organizations often struggle to understand how they can participate in the sustainability movement.
Since they have no smokestacks coming out of their offices and they dutifully recycle their paper, they question their impact. While it’s true that the direct impacts of their own operations will be miniscule in comparison to manufacturing, they need to appreciate the impacts they indirectly cause or influence through the delivery of their services and the patterns of customer behaviour they create.
What you should know about sustainability
Every service organization occupies a facility, uses various forms of transportation and consumes paper, which in and of themselves suggests improvement opportunities. However, many service organizations also have a production component: accountants produce reports; hotels and hospitals wash laundry; restaurants cook food; graphic artists print posters; ski resorts make snow; non-profit organizations host fund-raisers; rental car companies maintain their fleets; museums construct exhibits; and retail stores sell goods.
Service organizations have products too, and sustainability opportunities can be found in all these areas. Even if your internal practices are as sustainable as possible, it’s important to consider three other areas:
1. The ripple effect of the service you offer;
2. Strategic threats (to your customers, image or business model); and
3. Emerging opportunities to make a positive contribution.
The ripple effect. Often, the biggest impact of a service organization is not what it does itself but how it affects the behaviour and choices of its customers. When architects design a building and specify materials, their impacts go far beyond their blueprints! Their decisions determine the fate of the energy use of the building, the health of forests used for 2 × 4s, the air quality the building inhabitants will breathe and water quality in surrounding streams. When bankers decide to fund a home or business, their impacts far exceed the paper the loan is printed upon. Their decisions may affect the quality of life in the community, traffic congestion, opportunities for minorities and insurance costs shared by many. When a large superstore of a major chain locates on the edge of town and provides acres of free parking, it affects driving patterns, air quality, greenhouse gas emissions, and the vitality of the town centre.
Strategic threats. The second area services should consider is the impact of sustainability on matters key to their business: their customers, their images and also the foundation factors for their businesses. The insurance industry, for example, is extremely concerned about how climate change may affect its customers.
Property insurers worry that global warming will bring larger and more devastating storms, causing more property damage. Life insurers are worried about the spread of diseases that used to be restricted to equatorial zones. Swiss Re, the largest reinsurance company in the US and second largest in the world, expects climate change to be the next hotbed of litigation, following asbestos and tobacco.
They are taking action to protect them and their customers before the lawsuits begin. In some cases, sustainability-related trends may threaten the foundation of your business. Aspen and many other ski resorts are concerned that global warming might eliminate snow from their mountain tops or at least dramatically shorten the season. Sometimes the threat may be indirect. For example, many small-town barber’s shops, garages, and restaurants have been ruined when logging or fishing was curtailed in their communities. Sustainability helps you to foresee these potential threats and plan for them.
Service providers should also consider the impact of sustainability on their image. In Sweden, McDonald’s was embarrassed by public demonstrations over their packaging. They changed to compostable wrappers and containers and also took a look at other parts of their operation. They conducted a waste audit and realized that about 35 per cent of their refuse by weight was liquid (left-over drinks and ice) so they installed a sink next to the rubbish bin with a sign asking customers to empty their cups before throwing them out. They used the savings there to fund more efforts, such as buying organic dairy products and beef. Instead of a plastic toy, their Happy Meals come with a bag of compost and a seed, closing the loop on their organic waste stream. Leadership at McDonald’s asked the question, ‘Where would we concentrate our sustainability efforts if we took responsibility for changing the whole system?’ and realized that their biggest opportunities were in agriculture, building practices, packaging and energy. McDonald’s found that working on sustainability improved their image dramatically. Burger King tried to mimic their actions but never got the same image benefits. Being first has its advantages.
Similarly, Home Depot, the world’s largest retailer of timber, was targeted by the Rainforest Action Network for selling products from old-growth forests. After some embarrassing publicity stunts, including a protester broadcasting their message over the store’s public address system, Home Depot management finally got the message: it’s not OK to sell wood products from old-growth forests, ecologically sensitive ‘hot spots’ or illegal logging operations. Since then they have been quietly researching where all their wood – from 2 × 4s to hammer handles – comes from, replacing products made from questionable sources and giving preference to Forest Stewardship Council (FSC)-certified wood.
Emerging opportunities. Rather than wait to be attacked, why not find ways to make positive contributions to society and build goodwill? For example, Prison Pet Partnership
Program designed their service for maximum benefit. They get dogs from animal shelters and give them to women prisoners who then learn how to train them to be service dogs for disabled people, fetching items for someone in a wheelchair or warning an epileptic of an impending seizure. Had they designed their service any other way, Prison Pet Partnership Program would have produced fewer benefits. By design, they make valuable use of a wasted resource (unwanted dogs), create training and meaningful work for an atrisk population, provide assistance to an underserved population and protect the community with lower recidivism rates of inmates in their programme.
You don’t have to be a non-profit organization to have a mission to contribute to society. Starbucks, while sometimes vilified for their proliferation of stores, is trying to create a reliable market for fair trade, shade-grown coffee. Through Conservation International, they provide premium price, long-term contracts with responsible growers who can prove they are living up to Starbucks’ sourcing guidelines. Their guidelines include environmental requirements (eg shade-grown, bird-friendly practices), social elements (eg fair labour practices) and economic expectations (eg transparency and fair pay). Starbucks are doing what they can to transform the industry while only controlling about 1 per cent of the entire coffee market:
In 2003, 13.5 million pounds of Starbucks coffee beans were sourced through the Guidelines, which is way ahead of the initial forecast of 3.5 million and has encouraged Starbucks to more than double its forecast for the coming year. Sue Mecklenburg says the company has been surprised by its success. ‘We were trying to do something extremely innovative and challenging, with big risks.
We were trying to change our supply chain and did not realize the impact that we could have as a pretty small player in the coffee world.’ Sometimes, these efforts can yield new revenue streams. At least one office products retail chain has found that their electronics take-back programme is an effective revenue generator, especially for their commercial customers.
