The last few decades have seen a huge expansion of trade volumes and the emergence of new models for trading products and services.
Sustainability standards have also seen a tremendous uptake. There are 500+ standards, audits, frameworks, methodologies, guidance, assessments, etc. Each offers an innovative framework for more inclusiveness in trade, and more respect for people and the environment. We think that all of these organisations have done a great job towards sustainable future, and we wish all of them to do well in future.
Each standard, guidance, assessment, methodology, framework, audit, labels, etc. have their own strengths and they are all perfect in their own ways.
Are you finding it difficult to convenience your senior management about adopting sustainability assessment within your organization?
- It may let you gain business from the public sector, as most governments have added sustainability criteria into purchasing decisions.
- You may be able to become supplier or win business from a large company, as 97% of the procurement organizations surveyed consider sustainability/CSR important for procurement decision. https://www.hec.edu/en/news-room/state-sustainable-procurement-latest-ecovadis/hec-paris-barometer-released
- You may have an upper hand in competing with other suppliers. US Dodd-Frank Act, UK Modern Slavery Act and EU Conflict Mineral Regulation are driving companies to assess their supplier’s sustainability credentials.
- You should be able to attract more consumers. As per Forbes – 88% of the consumers want companies to help them make a difference. https://www.forbes.com/sites/solitairetownsend/2018/11/21/consumers-want-you-to-help-them-make-a-difference/?sh=63b431896954
- You may be able to address the fast growing expectation on environmentally-friendly, ethical and healthy alternatives. BBC – COVID-19 and sustainability. – https://www.bbc.co.uk/news/business-55630144
- You can drive financial outperformance. Oxford University –
- You can uplift revenue of 5-20%, reduce cost by 9-16% and increase brand value by 15-30%. World Economic Forum – http://www3.weforum.org/docs/WEFUSA_BeyondSupplyChains_Report2015.pdf
What major problem areas can sustainability assessment potentially solve?
Problems solved by sustainability assessment can be divided into 4 broader areas:
- Brand Image & Company Reputation
- Revenue Growth
- Profit Growth / Cost Reduction
- Risk Mitigation
Why should you hire someone to carry out a 3rd party sustainability assessment?
- Free up internal resources
- Quicker assessment because of skills & processes
- Reduced assessment cost
- Access to specialised talent
- Increase focus on core capabilities
- Improve credibility and brand image
- Improve process control
- Improve Key Performance Indicators
- Improve Key Result Area awareness
- Drive innovation
- Improve compliance
- Commercial advantage by differentiating you from your peers/competitors
- Reasonably improved assurance to your stakeholders when compared with self-assessment/self-certification.
- Reduce financial risks
- Reduce operational risks
How sustainability helped address problems and attain benefits according to World Economic Forum?
- Revenue uplift of 5-20%
- Supply chain cost reduction of 9-16%
- Brand value increase of 15-30%
- Significant company risk reduction
- Social – Improved customer health, local welfare and labour standards (wages, working conditions)
- Environment – Carbon gas reduction of 13-22% on overall footprint
How sustainability helped address problems and attain benefits according to Oxford University?
- 90% of the studies on the cost of capital show that sound sustainability standards lower the cost of capital of companies.
- 88% of the research shows that solid ESG practices result in better operational performance of firms.
- 80% of the studies show that stock price performance of companies is positively influenced by good sustainability practices.
How sustainability helped address problems and attain benefits according to Harvard Business Review?
- Employee Morale was 55% better in companies with strong sustainability programs.
- Employee Loyalty was 38% better in companies with strong sustainability programs.
- Firms with greater corporate responsibility performance can reduce average turnover over time by 25-50%.
- Firms that adopted environmental standards have seen a 16% increase in productivity.
- Companies can also charge higher price premiums up to 20% according to some estimates.
- Overall sales revenue can increase up to 20% due to corporate responsibility practices.
- In the food and beverage industry, a growing number of consumers are considering values beyond price and taste in their purchasing decisions, such as safety, social impact, and transparency.
- During the 2008 recession, companies committed to sustainability practices achieved “above average” performance in the financial markets, translating into an average of $650 million in incremental market capitalization per company.
- Since 1994, Dow has invested nearly $2 billion in improving resource efficiency and has saved $9.8 billion from reduced energy and wastewater consumption in manufacturing.
- In 2013, GE had reduced greenhouse gas emissions by 32% and water use by 45% compared to 2004 and 2006 baselines, respectively, resulting in $300 million in savings.
- Wal-Mart, for example, aimed to double fleet efficiency between 2005 and 2015 through better routing, truck loading, driver training, and advanced technologies. By the end of 2014, they had improved fuel efficiency approximately 87% compared to the 2005 baseline.
- Redesigning products to meet environmental standards or social needs offers new business opportunities.
- Nike embedded sustainability into its innovation process and created the $1 billion-plus Flyknit line, which uses a specialized yarn system, requiring minimal labor and generating large profit margins. Flyknit reduces waste by 80% compared with regular cut and sew footwear. Since its launch in 2012, Flyknit has reduced 3.5 million pounds of waste and fully transitioned from yarn to recycled polyester, diverting 182 million bottles from landfills.
Is there a detailed list of problems, which could be potentially addressed through a sustainability certification?
The list is based on 11 links after this list.
Brand Image & Company Reputation
- 1. Increase transparency
- 2. Better employee morale and talent retention linked to good labor practices
- 3. Attract talent
- 4. Healthier and safer environment for employees
- 5. Improvement of labor standards
- 6. Engaged investors
- 7. Attract investors
- 8. Make shareholders happy
- 9. Increase shareholder confidence
- 10. Sustainable brand image positively affecting credit rating and funding cost
- 11. Higher brand value through certifications
- 12. Global brand improvement
- 13. Build, enhance & protect brand to increase competitive advantage
- 14. Positive community impact
- 15. Positive environment impact with lesser pollution (air – water – land)
- 16. Improved customer goodwill
- 17. Improved health benefits for customer
- 18. Avoids serious health risks
- 19. Local job creation
- 20. Remanufacturing creates hundreds of thousands jobs
- 21. Lower noise emissions
- 22. Improve recyclability,
- 23. Redesign – Promote Innovation
- 24. Rethink – Example – Replace plastics with bio-plastic
Profit Increase / Cost Reduction
- 25. Improved energy efficiency, so reduced costs
- 26. Innovating with suppliers and customers, so reduced costs
- 27. Streamlining supply chain and logistics, so reduced costs
- 28. Resource (energy, material and water) productivity improvement, so reduced costs
- 29. Reduced waste and better equipment efficiency through total productive maintenance
- 30. Reduced transportation costs and carbon exhaust
- 31. Lower packaging costs
- 32. Higher freight utilization, so lower carbon emissions
- 33. Lower inventory costs
- 34. Opportunity to recycle or refurbish material
- 35. Remanufacturing leads to net reduction in input cost
- 36. Remanufacturing requires 85% less energy compared to manufacturing
- 37. Increase in productivity by improving efficiency and effectiveness
- 38. Companies can also charge higher price premiums up to 20%
- 39. Reduce buying and increase renting to share resource
- 40. Reuse – Promoted old end of life batteries for short term energy backup
- 41. Recycle – Old Equipment refitted to New Units
- 42. Reprocess – Modified old eqpt to suit new requirement
- 43. Refurbish equipment for life extension
- 44. Remanufacture for synergies for easy maintenance
- 45. Repair equipment to keep it in use
- 46. Recycle at end of life, and sell equipment to generate revenue
- 47. Repurpose equipment for redefined need.
- 48. Recover parts for non-repairable, non-saleable, non-refurbish able, non-reusable equipment before recycling
- 49. Rent instead of buy – Sharing of equipment
- 50. Recertify for life extension
- 51. Redefine needs
- 52. Increase exports
- 53. New revenue streams through closed loop manufacturing processes (e.g. by re-using products)
- 54. New revenue streams by selling waste
- 55. Price premium on products manufactured through clean technology
- 56. Price premium on products produced organically or through other sustainable practice.
- 57. Every dollar spent on EHS programmes result in a return of $1.5 to $6
- 58. Enter growing market of sustainable investment, goods and services
- 59. Redesigning products to meet environmental standards or social needs offers new business opportunities.
- 60. Position yourself as an industry and/or market leader
- 61. Securing “license to operate” – establishing credibility when it comes to sustainability – through regulation compliance (e.g. through proper environmental, healthand safety programs providing high ethical standards)
- 62. Protecting social credibility to operate, so risk mitigation
- 63. Integrating sustainability aspects with corporate risk management
- 64. Developing manufacturing processes for sustainable substitutes that diversify sourcing risk
- 65. Mitigation of company risks due to unethical suppliers.
Above sustainability benefits are based on following links from various reputed institutions:
- Oxford University – https://arabesque.com/research/From_the_stockholder_to_the_stakeholder_web.pdf
- Harvard Business Review – https://arabesque.com/research/From_the_stockholder_to_the_stakeholder_web.pdf
- World Economic Forum – http://www3.weforum.org/docs/WEFUSA_BeyondSupplyChains_Report2015.pdf
- Fortune- https://fortune.com/topic/global-sustainability/
- Forbes – https://www.forbes.com/sites/josephholt/2020/01/28/sustainability-in-business-is-more-an-opportunity-than-a-threat/?sh=129d067e1b76
- OECD – https://www.oecd.org/daf/competition/sustainability-and-competition.htm
What makes céleste assessment credible and/or authentic?
- This is a 3rd party certificate, so more credible than self-declaration.
- All certificates follow at least 4-eye approach, so minimum two person are involved in the assessment. One assessor and one quality controller.
- We follow United Nations sustainability principles for social and environmental assessments.
- céleste certificates are easily verifiable by anyone through a smart phone camera.
- céleste certificate is verifiable by anyone with QR code or certificate number without extra payment to us.
- We wish to provide an excellent customer experience, however not by issuing something fake. So we warn our customers that you will have to earn it, not buy it.
- For Silver, we follow at least 2 data check point methodology. For Gold, Platinum & Diamond levels, we follow 3 data check point methodology, which may go up to 5 data check point methodology. This demonstrates depth of the process.
- For silver, we follow at least 2 criteria from policy, process and performance. For Gold, Platinum & Diamond levels, we check on all three criteria of policy, process and performance, which demonstrate breadth of the process.
- We are registered in the UK, which has some of the strictest laws like:
- Modern Slavery Act 2015, which is global in nature
- Bribery Act 2010, which is again global in nature
- Sanctions & Anti-Money Laundering Act 2018
- Data Protection Act 2018
- We also try to train at least one person during your assessment, so that person can act as an assessment process reviewer. 5% of your payment goes to training of these personnel, so you are directly supporting our social responsibility objective.
Is céleste assessment 100% reliable?
Every sustainability assurance companies try their best to arrive at a reliable conclusion (rating, score or certificate). However, there may be potential flaws like:
- Data collection
- Data interpretation
- Data analysis
- Data manipulation
- Data presentation
- Data governance
- Data management process
- Human Errors
We wish to be wrong; however we think that there are no 100% reliable standards, audits, frameworks, methodologies, guidance, assessments, etc. (including céleste) in the world that exists to perfectly “score”, “rate” or “certify” sustainable companies, processes and products. Sorry, we are not perfect. However, we aim to be the best with immense respect to the amount of money you are investing.
What are the differences between “Assessment Only” versus “Assessment & Certification”?
Assessment results are kept confidential between us. Certificates are in public domain, so it can be shared with others.
Assessments are for internal improvements, whereas Certificates should improve your company credibility and brand value.