By Matt McGeehan
There is a common misconception that operating sustainably increases cost. But M&S has proved that being green needn’t cost the earth and can actually reduce costs.
In 2006, the Stern Review on the Economics of Climate Change warned about the economic and business consequences of climate change. In response, M&S launched “Plan A”.
Initially the plan was simply to collate and publicise its existing sustainability initiatives. M&S intended to invest £200m over five years which would enable it to reach its sustainability goals without creating extra costs for customers. At first, the focus was how to manage a projected increase in budget.
However, M&S developed Plan A and applied it right across the value chain. It not only made the business more sustainable, but it also generated over £185m in net cost benefits in five years. This wasn’t delivered by a small corporate social responsibility team. It needed transformational change right across the business from logistics to human resources.
The focus then became how to harness these benefits and really understand the implications. The finance team had a role to play in building the business case for new opportunities and encouraging savings by reporting the financial benefits.
M&S became the world’s first carbon neutral retailer and:
- Reduced energy consumption by 28%.
- Reduced food waste by 40%.
- Cut packaging by 26%.
- Reduced food carrier bag use by 78%.
- Reduced water usage in stores, offices and warehouses by 18%.
- M&S achieved zero waste to landfill from all stores, offices and warehouses and, in doing so, it saved £4.6m. It also cut its paper usage by over 25% through best practice and investment in IT saving £2.6m. Its biggest store, Cheshire Oaks, has an 80,000 litre rainwater tank and 70% of the store’s heating comes from a biomass boiler and heat reclamation resulting in lower water and heating costs.
It is wrong to assume that operating sustainably must mean increased cost. In fact, applying the green agenda drives innovative solutions that can reduce cost. Accountants should not leave sustainability to someone else. Measuring, monitoring and driving the net benefit from sustainability initiatives should be a core part of our job description.
This article was originally published in the 18 May 2017 issue of CA Today.