Manufacturers and environmental activists haven't always been natural bedfellows; but it's become clear that doing right by the environment is an absolute business imperative.
In March 1999, US software giant Salesforce wasn’t the billion-dollar blue chip that it is today. The firm started life in a cramped one-bedroom apartment in the Telegraph Hill neighbourhood of San Francisco.
Devoid of proper office furniture, Salesforce’s founding partners made do with card tables and folding chairs instead. The company’s server room doubled up as a bedroom closet. But founder Marc Benioff had ambitious plans for what Salesforce could be.
He hung up pictures of Albert Einstein and the Dalai Lama and told his colleagues to think big.
Most fledgling companies when starting out have precious little time to think about anything other than surviving day-to-day. With no customers or demonstrable track record, you’d be forgiven for thinking Benioff’s mind should have been solely on keeping the wolf from the door.
But after less than a year of trading Benioff made a headline pledge that would be at the core of the firm’s model for growth in the decades ahead.
By December 1999 Benioff had launched the 1-1-1 model of philanthropy. He vowed to donate 1% of the company’s equity, employee time and products to non-profits including environmental charities. Reckoning Salesforce was more likely to prosper in a world where its customers and employees had access to clean air, water and energy, Benioff quickly declared the environment as one of the business’s core stakeholders.
For Benioff, a healthy environment was a prerequisite of a healthy bottom line. Less than 20 years later, his one-time bedroom start-up now has a market cap of more than £91bn.
Let’s face it manufacturers and environmental activists have not always been natural bedfellows. Twenty years ago if you wanted to clear a room of business leaders in 10 seconds flat you need only talk about why the planet depends on business doing the right thing.
For decades the big hitters of UK plc have been reluctant to stray into a field usually the territory of grassroots campaigners and celebrity activists. Doing anything to lessen the environmental impact of your business was once code for investing in measures that would drive up costs and eat into margins.
But society’s expectations of manufacturers are changing considerably. Firms and consumers alike are growing increasingly reluctant to do business with those players not facing up to their environmental responsibilities.
According to the Edelman Trust Barometer 2019, more than 50% of people surveyed internationally believe CEOs have an important role to play in delivering positive environmental change.
Back in 2012, I was inspired by the curious case of Salesforce and Benioff to ask some probing questions of myself and my business. Would my children forgive me if I put at serious risk the planet they are set to inherit for the sake of short-term commercial gain? Could my business thrive in a world crippled by endemic pollution and irreversible climate change? Would my customers prefer to engage the services of a business with a clear view on its relationship with the natural environment than one that didn’t?
It became clear fairly quickly that doing right by the environment was an absolute business imperative. So seven years ago, Heap & Partners aligned our business goals to those of the planet and our staff. We called this the Three P’s: People, Planet, Profit.
We set about becoming carbon neutral. We replaced 1,200 light bulbs with LED lights. We gave our salesmen electric hybrid cars. We installed a pioneering ‘SmartFlower’ solar panel system capable of slashing both our energy consumption and our electricity bills.
We worked with the Woodland Trust to plant trees in a bid to offset 220 tonnes of carbon. Since we made the move to go green, I’ve been inundated with positive feedback from customers and prospective clients from all over the world and it quickly became obvious that going green could be a major boost for the bottom line.
In 2019, those manufacturing companies that put the environment at the heart of their business model are all set to steal a march on their competitors. In short, doing well for the planet and for the bottom line are now aligned and that can only be a good thing.
David Millar is Managing Director of Heap & Partners.
Founded in 1866, the firm is one of the UK’s leading manufacturers and distributors of fluid control equipment, with clients working in Oil & Gas, Chemical, Petrochemical, Pharmaceutical, Power & Utilities, Nuclear, and Life Science industries worldwide.