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The Conversation - February Edition

Feb

Welcome to The Conversation. In this issue we will be looking at sustainability and how the role of communications consultants has shifted away from simply helping companies articulate initiatives and towards driving behavioural change. To give us some insight into this exciting and rapidly evolving part of the communications mix, Sermelo asked Will Nichols from Business Green Magazine and James Wood from the Global Risk Institute for their take on the following questions:

(A) What will the future of sustainable business look like?

(B) What are the immediate challenges for companies who want to be sustainable?

(C) What impacts have you experienced as a result of the trend towards increased sustainability?

We've also got some thoughts following our trip to the World Economic Forum at Davos and some analysis on sustainability. Enjoy!

A Word from our Founder - Jonathan Jordan

If we can ignore for one moment the dreadful weather, it appears 2014 has started well as the economic recovery is gathering momentum.  However, it seems that everyone is asking the same question: is the recovery sustainable?

While we all probably hope the answer is yes, the hard reality is this will only be the case if everyone makes a commitment to turn words into actions.  As we move forward from a point of economic inflexion, we all need to think differently and give clear signals to the companies that are trying to do the right thing and engage with some of the bigger societal issues we face.

Dialogue needs to drive behavioural change and encourage collaboration between every stakeholder in our connected society.  Ignorance can no longer be a defence, and in my view the biggest opportunities for reward will be harvested by the companies that garner our trust.  This can only be achieved through sustained actions that demonstrate an unwavering commitment to our shared future and a track record of doing the right thing.

Client News

We’ve been delighted to support Owens-Illinois, Inc (O-I), the world’s largest glass manufacturer and preferred partner for many of the world’s leading food and beverage brands, in its recent landmark glass packaging sustainability initiative with one of its biggest clients, Carlsberg.

The new Carlsberg Circular Community, or CCC, is a platform where Carlsberg and its key suppliers will come together to transform the design and production of traditional packaging material with an ambition of developing products that are optimised for recycling and reuse, while retaining their quality and value.  O-I's current use of recycled glass - an industry leading 36 percent globally - already generates enough energy savings to completely offset the emissions produced by finished goods transportation. However, O-I sees initiatives and partnerships such as the Carlsberg Circular Community as fundamental in a continued push towards creating a sustainable future.

Current research shows that consumers are increasingly looking for healthy, sustainable and authentic products, trends which fit perfectly with glass’ qualities as a resource efficient and a highly protective material.

The EU Commission recently stated that it is looking to promote a green circular economy. It is also looking to divert all waste from landfill, and promote a closed loop economy system where waste is reintroduced as valuable materials. In many ways, glass already has a strong circular economy model, in part due to the fact that it is 100% recyclable:

The Sermelo team has been working with O-I to support the launch of this amazing initiative.

In addition, we also organised a successful media roadshow which happened at the end of January, in London, to promote O-I’s various sustainable activities. With a lot more in the pipeline, all of us at Sermelo are looking forward to continuing to work with O-I in the future.

New Client Wins

We are proud to announce that we have recently started working with two new clients.

Andermatt Swiss Alps

A former bolt hole for royalty and aristocracy, the town of Andermatt is being transformed into the ultimate luxury destination in the Swiss Alps, combining fantastic skiing for all levels and an 18-hole PGA golf course.  With easy access from Zurich and Milan, and investment that will connect 123 km's of glorious piste, Swiss developer Andermatt Swiss Alps is offering an opportunity to purchase various types property at this ground breaking development.

In order to build and maintain a suitable positioning for Andermatt in the minds of property investors and high net worth individuals, as well as their respective influencers (i.e. media, industry associations, data and content producers), the Sermelo team has developed a communications programme to support this enterprise. One of the Sermelo team recently visited Andermatt with several journalists which proved to be a great success.

Throughout 2014 the Sermelo team will develop various targeted PR campaigns aimed at getting the attention of top-tier media and attracting them to come to Andermatt and experience it for themselves.

Global Risk Institute in Financial Services (GRI)

GRI responds to the needs of the private and public sectors for better intelligence, information and training regarding risk in the financial services sector. GRI also acts as a hub, stimulating evidence-based debate between regulators, practitioners and academics engaged in risk. Originally a Canadian institute, the organisation is now expanding internationally and wants to build its presence in the London financial market, through providing applied and integrative research in financial risk and enhancing risk education for organisations around the world.

Sermelo has been working closely with the GRI to help build their profile amongst UK pensions, insurance and risk media. Sermelo is working on a sustained media campaign which will communicate the GRI’s benefits and research capabilities to key stakeholders.

Sermelo News

We are thrilled to be able to announce that our team has grown once again, with the addition of a new Senior Consultant, Laura Petty.

Laura is a corporate communications specialist with extensive experience in managing international accounts across multiple sectors. She joins us Grayling’s Corporate and Financial Services team, where she specialised in economic development campaigns. Her clients have included the Government of Ontario, the University of St Gallen, Nabucco Gas Pipeline International GmbH, the International Federation for Animal Health and Wolf Theiss.

Originally from Canada, she is a graduate of Queen's University, Ontario, and achieved a Masters in International Peace Studies from Trinity College, Dublin. She previously worked as a journalist at Third Sector magazine and EMMA Media, where she was editor of an online corporate social responsibility network.  Laura is actively involved in fundraising, sponsorship and communications for a number of UK and international charities, including The Passage homeless facility and the Toy Tea for Children. She is a member of the Canada-UK Chamber of Commerce and Chatham House. A member of the Public Relations Consultants Association, she was elected to the UK PR Council in October 2013.

In the last six months we have seen an increasing demand to develop cross border campaigns targeted at internal and external audiences and we are very pleased to welcome Laura to our growing, and increasingly international team.

The Forum

Will Nichols, News Editor at Business Green answers three key questions on the sustainability debate:

What impacts has your company/sector experienced as a result of the trend towards increased sustainability?

Covering the sector for the last four years, the biggest change I’ve seen is that companies are genuinely starting to get the agenda. Sustainability is moving from a ‘nice to have’ to a ‘must have’, and not because of saving the planet or ‘it’s the right thing to do’ but because saving energy, cutting waste, improving the resilience of supply chains improves the bottom line. Saving money is always going to get attention in the boardroom and sustainability executives are now able to make the case in stark economic terms – M&S saved £135m during 2012/13 through its Plan A Sustainability strategy; IKEA is investing €1.5bn to 2015 in its own renewable power sources to insulate itself from rising energy bills; I’ve lost count of the number of taxi firms switching to hybrids to save on fuel and meet emissions rules. Meanwhile, more and more large companies are demanding their suppliers meet sustainability standards. If you’re not doing this, you’re missing out on customers, contracts and falling behind.

What are the immediate challenges for companies who want to be sustainable?

Sustainable operation is ultimately about answering an existential question – how is the way I’m operating going to ensure the company is around in 40, 50, or 100 years’ time? Family businesses such as SC Johnson are particularly good at looking to the long term, considering the challenges and what they have to do to meet them, because they want to be able to pass the company on to the next generation. Unilever has led the way on abandoning quarterly results because they are not conducive to long term thinking and others are following suit. But the main challenge for companies is to identify where the specific future threats and opportunities lie for their business – whether that’s rising energy prices, resource constraints, stricter environmental legislation, more frequent extreme weather events, customer demands – and to work out how to deal with those.

What will the future of sustainable business look like?

There is no one way to create a sustainable business and no one model all companies will follow to embed long-term thinking into their decision-making - we should expect a huge range to grow up in the coming years. But one aspect that really interests me right now is the rise of the so-called sharing economy led by companies such as Zipcar, Air bnb and PartAtMyHouse, but increasingly adopted by the big boys. Spending a lot of money on a car just to leave it on your driveway for 80 per cent of the time seems crazy, but many of us in cities do exactly that. Joining a car club means no upfront purchase, no tax, no insurance, but you can still have access to a car whenever you need one. And it requires fewer cars to be manufactured, saving energy, while studies suggest people drive car club cars far less than vehicles they own. Can companies handle such a fundamental challenge to their model? Ask BMW, which has rebranded itself a ‘mobility company’ and will let you swap your electric car for a petrol model for a week if you need one. Ask M&S, which through ‘shwopping’ has customers handing back clothes to be recycled into new products. If customers want to live in a lighter-weight world with less ownership, companies will have to find a way to deal with it.

James Wood, Global Risk Institute also answers three key questions on the sustainability debate:

What impacts has your company/sector experienced as a result of the trend towards increased sustainability?

I think you’ve seen a lot of companies in the financial sector invest more heavily in sustainability initiatives in the community. Plus it saves money if people do sensible things such as switch off lights, reduce water consumption, etc. Another, bigger issue is sustainable investment, and you’re seeing a lot of financial firms make longer-term investments in infrastructure, which is good for them (stable, longer-term returns) as well as being good for the communities in which they are making these investments.

What are the immediate challenges for companies who want to be sustainable?

As above – action in communities, but also a new approach to business which is good for the companies and good for the environment. It is possible, and not just window-dressing…

What will the future of sustainable business look like?

How long do we have? I dream of the day when someone invents a viable teleconferencing package, a hybrid of WebEx and teleconferencing that isn’t highly fragile, prone to crashing and will accept various kinds of documents. Nothing will ever replace face-to-face meetings, but this would go some way to avoiding some of the more onerous kinds of business travel.

Out and About

Sustainability has been a mainstay at the World Economic Forum for years and Sermelo was in excellent company as the global green community trekked to the mountain resort of Davos to discuss how to achieve inclusive growth; how to sustain a world of 9 billion and how to do all of this whilst meeting society’s new expectations.

Despite the calibre of the attendees and the stellar profile of the event, what was unfortunately most striking was that little of the high-flowing environmental aspiration actually translated into concrete plans for new environmental action amongst the bulk of the business community.

Whilst there is nothing newsworthy here, it was interesting to see Davos becoming increasingly divided between companies with an ethos based around sustainability and others who are simply going through the motions.

Whilst market leaders such as IKEA (a Sermelo client!), Unilever and Marks & Spencer’s understand the benefits of a sustainable business model and have started moving beyond this to encouraging sustainability amongst their customers this is not new. Instead what we seem to increasingly see at these forums is the widening sustainability gap between those who innovate and lead in the green field and those who promise to follow – but year after year never quite seem to get round to it.

This is not to say that the event did not provide a great forum for exchanging sustainability ideas and best practice. Carlsberg Group President and CEO Jørgen Buhl Rasmussen’s announcement of a new “circular economy” (which will ensure that all its products are designed to maximise reuse and recyclability and features another Sermelo client O-I as a key partner) took a lot of the limelight, as did the new Environmental Products Initiative - which will pursue a multilateral trade agreement amongst key WTO members to promote the trade of green products.

But despite this progress, given the lack of a holistic approach to all aspects of sustainability suitable for all aspects of business, substantive, saleable change will be hard to come by. To give WEF 2015 a chance of some real achievements in sustainability, perhaps the Davos organisers could give some thought what such a framework might look like over the next year? We at Sermelo would be delighted to help.

Sermelo Insight

Corporate Responsibility: now is the time for organisations to take a ‘shared value’ approach

Globalisation – and its impact on the world’s largest businesses has been dramatic. In 1980, the world’s top 100 firms were contributing to 30% of the world’s GDP. By 2010 though, the figure was closer to 75%.  Products of the world’s largest organisations now reach up to two billion people per day. With this unprecedented new reach and power, it’s vital that all major organisations redefine the role of their business within society.

Organisations today must look to take a ‘shared value approach’ to sustainability. Traditionally, the impact that corporations had on society, the local economics in which they operated, and the environment were all seen as a threat to their profit. Now though, organisations are beginning to realise that corporate responsibility is about embracing these three issues, and ensuring that nurturing them is a fundamental part of their corporate strategy.

In other words, corporate responsibility has shifted away from random acts of philanthropy or charitable donation, and has become a fully integrated part of business.

Professor Ioannis Ioannou, a lecturer at London Business School, has coined the term ‘Social Innovation’ which is the following:

“Those products, processes, or importantly, business model innovations that are specifically designed to integrate environmental and social issues into a company’s strategy and by doing so, they synergistically co-generate economic and social value.”

This is all well and good, but what are the practical steps that companies can take to ensure they are taking this ‘shared value’ approach? For me, there are three steps that I’ve outlined below:

Develop products that meet customer needs (and contribute to society)

Corporate responsibility is now more than just ensuring that your organisation is sustainable and responsible; it’s about creating an environment that allows customers to behave in a sustainable way.

IKEA is a company that has done this extremely effectively.  For instance, in 2010, it phased out incandescent bulbs that were less energy efficient in favour of energy efficient compact bulbs (with no cost implications to the customer). Furthermore, IKEA’s entire lighting range will switch to LED by 2016, for the lowest possible price for the consumer.

By creating products that allow customers to lead a more sustainable life at home, IKEA has embraced corporate responsibility at the very core of its business.

Create social and environmental innovation throughout the supply chain

In our increasingly globalised world, supply chains have become increasingly complex, which has forced organisations to examine operations beyond the walls of their own company.

Owens Illinois, the world’s largest glass manufacturer, has taken some excellent steps to maintain efficiency throughout its supply chain. One of the big advantages of glass over other packaging materials is that it is 100% recyclable, an unlimited amount of times. Furthermore, if you take a cradle-to-cradle approach (and view the entire lifecycle of the packaging material) glass is the most environmentally friendly product out there.

Owens-Illinois is collaborating with some of Europe’s major recycling plants to ensure that its new glass manufacturing plants are located next to the recycling facilities. This ensures that transportation costs remain at a minimum, and the vast quantities of glass can be transported (at the lowest possible costs) directly to the recycling facility.

Cluster development – i.e. – supporting industries or sectors that are close to (and will benefit) your own

It’s important for organisations to realise that they are part of a larger human ecosystem, and in order for them to be successful as a company, its ecosystem needs to be thriving as well.

SAP, the German multinational software corporation focusses on the development of emerging entrepreneurs, particularly those that are involved in SAP’s sector (i.e. - technology), and also a good education for underserved youth.

By nurturing the development of young talent in the IT and tech sector, SAP is helping to create a more talented workforce for the future and increasing the ‘talent pool’ from which it will be able to select from in the future.

For more information on related topics please feel free to read the following:

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