Achieving sustainability through financial rigour
Committing to a sustainability programme requires ambition, a clear understanding of how targets will be achieved and, above all, backing from management, employees and partners. But how integral is it to apply financial disciplines to a business's sustainability plan? Leigh Stringer finds out
It has become common for a business’s financial director to incorporate the role of sustainability professional, and in the case of international support services and construction group, Interserve, combining financial expertise and the understanding of sustainability has resulted in some ambitious targets.
Interserve’s group finance director and head of sustainability, Tim Haywood, has revealed the company’s comprehensive, business-wide sustainability plan which “lays the foundations for continued growth and sustained performance”.
Haywood told edie: “What we’re trying to do with the launch of this plan is to bring some of my financial rigours and disciplines to some of the non-financial areas so we can use the measures and rigorous information to demonstrate how we’re progressing against these targets.
“[The plan] is not fluffy or soft, it’s not altruistic and it’s not tree-hugging in its agenda. It’s all about hard metrics, defined deliverables and to deliver an improved business rather than it being in any conflict to some of the non-financial objectives and the financial performance,” he adds.
The plan, called ‘SustainAbilities’, establishes clear and measurable targets for Interserve and its workforce of more than 50,000 people. The plans framework aims to deliver its services in a way that has a beneficial impact on society and the environment, while also delivering sustainable growth and profit to shareholders.
It also emphasises the role of knowledge, alongside the more traditional measures of sustainability as central to its success. The company’s sustainability performance will be measured not only in traditional financial terms but also using four ‘capitals’ that capture the wider impact of the business’s growing range of activities, which increasingly include front-line services.
The four capitals the programme focuses on are Natural Capital (stewardship of energy and natural resources), Social Capital (health and well-being of employees and the community), Knowledge Capital (nurturing talent, enabling innovation and increasing the skill-base of society) and Financial Capital (effective management of risk, reducing cost and realising new opportunities for growth).
Haywood said: “The plan announced puts sustainability at the forefront of our decision-making. It will define how we work, the decisions that we take as a business and create a new culture among our employees and management. It will be critical to our future success as a business.”
The company’s sustainability strategy covers targets up to 2020 and focuses strongly on reducing emissions, waste and water consumption. One of the standout targets is the company’s ambition to cut water use by 20% by 2016.
Haywood made it clear that water scarcity featured highly on the agenda as he stressed that the next war could well be fought over water rather than oil. “Water scarcity is a very present danger for the well-being of the sustainability, the security and the resilience of companies and countries. We operate in the UK as a contractor, and have done for a long time, under most of the water utility companies and therefore have spent a lot of time building and perfecting the UK’s water infrastructure.
Haywood explained that because of the company’s work with the UK’s water infrastructure it had been involved in desalination projects, water purification and leak rectification.
However, the company is working on water issues in the developing regions, particularly in the Middle East where “water is the most pressing environmental challenge they face”.
“I was recently in Saudi, Qatar and Oman and I watched them tanker bowsers filled with water up and down the country and that’s obviously got a huge amount of environmental impact in terms of fuel usage, and congestion on the bad roads but it also brings up issues around the absence of any infrastructure. And there isn’t a particularly strong culture yet over water awareness,” adds Haywood.
Haywoods comments coincide with World Water Day (22 March) which highlights the need for greater awareness around water issues.