This month’s sustainability tip: pick up your pen (physical or digital). Why? Because clear, engaging communication and reporting will make your manufacturing business more sustainable. Harnessing the power of words will help you define your sustainability strategy and share it with the people who matter to your business.
1. Get your sustainability strategy down ‘on paper’
We love this quote from Pulitzer Prize winner David McCullough: ‘Writing is thinking. To write well is to think clearly. That’s why it’s so hard.’
We think he’s right. Getting your sustainability programme down ‘on paper’ will force you to consider how sustainability fits into your business strategy. What really matters to make sure your business ‘goes the distance’? How can you make it more sustainable? Who do you need to involve? What are the risks and opportunities? What targets will you set and how will you know if you meet them?
If you haven’t already, get writing. Our tips: focus on what matters. (Strategy is about what you leave out as well as what you put in.) Keep your document short. Use ‘dinner-table language’: simple words, short sentences, personal language like 'we' and 'you'.
2. Communicate your products’ environmental performance
Tell your customers how you’re making your products more sustainable. Consider producing an Environmental Product Declaration (EPD) for a product. In our last article, we featured manufacturer Red Stag Wood Solutions’ EPD for sawn and planed timber products.
An EPD tells the environmental story of a product over its life cycle in a clear, simple format that a wide audience can understand. It will help you translate complex environmental information about your product’s environmental footprint into simpler information that your wholesale and retail customers can trust to make decisions.
Every EPD is based on data from a detailed environmental study called a Life Cycle Assessment (LCA). It’s a science-based, independently verified, publicly available communication tool. EPDs work in the same way as nutrition labels on food products: trusted information, communicated clearly.
3. Communicate with the people who matter
Engage your stakeholders to make your sustainability programme happen. Educate them. Unleash their ideas. Gain their support for your work.
Engage your customers
Many of you may be fielding requests from customers keen to know more about your sustainability programme. A short, simple sustainability report will help you answer these requests. Your report needs to answer the questions set out above.
You may want to include a case study featuring your team and the work they’re doing to make your business more sustainable. The more interesting and personal your report, the more likely your customers are to read it. It may also influence them to buy from you.
Engage your team
Employees want to work for a business that ‘does the right thing’. Tell them what you’re doing. Better still, involve them in your plans. Ask them to share practical, on-the-tools advice to make your business more sustainable.
Then equip them with a short message to share with the people they deal with every day. What do you want them to say to customers, suppliers and transport providers to explain your sustainability work?
Engage your suppliers
Communicating with suppliers will reduce your supply chain risks. It will also help your suppliers understand how you can work together to make their businesses more sustainable too.
A written ‘supplier code of conduct’ can be helpful. Set out what you expect of your suppliers. For example, tell them you expect them to measure and reduce their carbon emissions. Set out the ‘evidence’ you want to see. If ‘code of conduct’ seems a little formal, a ‘this is what we expect of our suppliers’ checklist works well too.
When you tender for a new supply contract, use a written questionnaire to test whether competing suppliers meet your sustainability criteria. What are they doing to reduce their waste? To avoid child labour? To choose ethical suppliers to their own business?
Engage your industry association
Most industry associations have at least a watching brief on sustainability. Get involved with yours and share ideas with other members to make your industry more sustainable. (You can tackle many issues at an industry level without divulging competitive information.) You’ll all benefit and you’ll make faster progress together.
Engage your investors
Whether you’re an NZX- or ASX-listed manufacturer or ‘mum and dad’ business, someone has invested in you. Your investors need to understand the financial risks and opportunities that climate change brings to your business.
Here’s an example of a climate change risk: a storm disrupts your business, damaging your factory and causing a break in production. Faced with disruption, an important customer moves to a competitor. Your revenue falls.
Now, a climate change opportunity. You redesign your product to reduce its carbon footprint and communicate the results in an EPD. Your sales increase.
Reporting these risks and opportunities will help you identify, understand and manage them. It will also help you reassure investors (including maybe yourself?) that you understand what climate change means for your business and are stepping up to manage it.
In Aotearoa New Zealand large organisations and listed companies must disclosure their climate-related risks by the 2023/24 reporting year. If you are in this group, prepare for this change by reading the Task Force for Climate-related Financial Disclosures (TCFD) guidance and the requirements of New Zealand’s External Reporting Board (XRB). In Australia, disclosures of climate-related risks are not required, though many organisations are making voluntary disclosures.
If you do not have to report externally, taking a few hours to think about how climate change may affect your business will pay dividends. Document the risks and opportunities, confirm how you’ll manage them and review them regularly.
Conclusion
At a challenging time for manufacturers in Aotearoa New Zealand, it can be hard to find time to communicate and report on your sustainability efforts. We hope we’ve convinced you that it’s time well spent. Grab your pen and realise some tangible value for your business!
This article was first published in NZ Manufacturer August 2022