How to grow sustainablyBest practices and real-world tips on how to get started on the path to responsible corporate citizenship

1It’s time to make sustainability your strategy

Contributors

Managing EditorAna Constantinescu

Contributing writersKate Ancell

Reva Nelson

Editorial teamChas Dickinson

Lori Lewis-Chapman

Katie Robson

Creative teamMegan McKenna

Angela Novak

Bridget Shafer

Hans Sundquist

Subject matter consultantsDorsey Baskin

Robert Conlon

Jeff French

Bailey Jordan

Brian Larsh

Mark Lemon

Dexter Manning

Jose Molina

Tony Perazzo

Tim Schram

Robert Schwartz

Winnie Steffenson-Click

Rob Tague

7Taxes and incentives

2 Industry benchmarking

8Risk management

3Global benchmarking

9Performance improvement

4Business strategy

10Hiring and retaining talent

5Supply chain

11Subject matter consultants

Connect with us

grantthornton.com

@grantthorntonus

linkd.in/grantthorntonus

6Measurement and reporting

IT’S TIME TO MAKE SUSTAINABILITY YOUR STRATEGY

2 3

5 4 Table of contents

Jeff FrenchManufacturing Practice LeaderT +1 920 968 6710E jeff.french@us.gt.com

Dexter ManningFood and Beverage Practice LeaderT +1 404 475 0061E dexter.manning@us.gt.com

Connect with usWhen you’re ready to talk about your sustainability plans, the following practice leaders can answer your questions:

All these are good answers. In fact, these are the top three sustainable activities among food and beverage companies — from manufacturers to distributors to retailers — according to a Grant Thornton LLP survey (you can read more findings in the next section).

But there’s a catch: These are just activities, limited in scope and effectiveness. They can make a small difference in the short term and earn you 15 minutes of good PR, but all stops there. To truly achieve the status of a sustainable, socially conscious company, you need to take action in the right direction and with the right mindset.

When you think about your company as a sustainable business, what comes to mind first? Reducing production waste? Your paper recycling program? The switch to energy-efficient lighting?

No longer just a hip term, sustainability has earned a seat in the boardroom. More and more companies approach sustainability through the triple bottom line — social, environmental and financial — and they are seeing the results. They help their communities through social programs; reduce their environmental impact thanks to efficient, lean operations; and see significant savings by rethinking how investments are made.

Your company doesn’t need to reach deep into its coffers to do all this. You can get started on the path to sustainable corporate citizenship by taking small but strategic steps. And the good news is that consumers are on your side, now more than ever before.

This publication is a roadmap to sustainability ROI. It gives you the benchmarks, ideas and clear action items that you can use to go off the beaten path and into a sustainable future.

Visit grantthornton.com/sustainability

7 6 Table of contents

Being a sustainable business is about more than just reducing waste, especially for food and beverage companies. It is about attracting and keeping customers by protecting the environment, improving lives through social programs and maintaining corporate accountability.

We surveyed the industry to uncover the state of sustainability along the food and beverage supply chain. Our results show that many companies have built tremendous momentum, yet most are still on the sidelines.

Sustainability is a priority, yet a challenge to implement“Sustainability is top of mind for nearly all companies, but they pursue it to varying degrees,” says Tony Perazzo, Grant Thornton Audit Services partner. “For most, it starts with the customer. They feel good knowing that they have made a responsible purchase. And many will choose an eco-friendly product or brand even if it is a little more expensive than an alternative.”

68%

68%

67%

64%

How important is sustainability to food and beverage companies’ business strategy?

Critical to growth

Profit-generating in the long term

Demanded by consumers

A competitive differentiator

Difficult to implement

Profit-generating in the short term

A fad that will disappear in a few years

52%

25%

10%

3 key insights from The State of Sustainability at Food and Beverage Companies survey

45%think sustainability is

extremely important to their business

strategy.

INDUSTRY BENCHMARKING• A sustainability-focused business model is no longer a

nice-to-have; it’s an imperative for strategic business leaders

• C-suite commitment is critical to sustainability-related efforts; charting the course and building a governance process can result in ROI down the road

• The future of a sustainable food and beverage business — or of any business — is about collaboration between the key players in the supply chain, transparency of raw materials (i.e., ingredients) and consumer education

Read more about this on our website

8 9 Table of contents

Leadership commitment, ROI key to successful sustainability programGet commitment from the top. Make a clear case for long-term profitability. Evaluate the strategy from a holistic, risk-based approach. These are three critical milestones in getting leadership support for a long-term sustainable strategy.

Different role in the supply chain, different attitude toward sustainability“There is ROI to consider, and the bigger ROI is going to be in the manufacturing and food processing part of the supply chain, as well as in retail, particularly with regard to recycling and packaging,” says Dexter Manning, Food and Beverage practice leader at Grant Thornton.

Suppliers and manufacturers are the furthest along the adoption curve

Supplier Retailer Wholesaler

Followers (compliance) 22% 27% 41%

Mature (risk and cost management) 27% 31% 13%

Leaders (sustainable business model) 24% 18% 19%

Champions (large-scale, sophisticated sustainable strategy)

13% 9% 3%

Not sure 13% 16% 25%*Significant at the 90% level of confidence. Responses do not total 100%

due to rounding.

Top sustainable activities show different priorities along the supply chain

Supplier Retailer Wholesaler

Reducing production waste 78% 44%* 38%

Paper and packaging recycling 69% 69% 53%

Reducing energy consumption 62% 78%** 47%*

Reducing consumer waste 53% 45% 38%

Funding social programs 40% 32% 16%*

*Significant at 95% level of confidence.

**Significant at the 99% level of confidence.

Suppliers are more likely to:

• Say that sustainability is critical to growth and that their customers expect it

• Implement a sustainable business model

• Measure their sustainability efforts Retailers are more likely to:

• Reduce their energy consumption

• Report savings through energy-reduction and federal programs

Wholesalers are more likely to:

• Dismiss sustainability as a fad

What factors are most important when considering sustainability?

About The State of Sustainability at Food and Beverage Companies survey

The survey is based on answers from 189 respondents collected in April

and May 2014 from C-suite and senior leaders in food and beverage retail,

manufacturing/supply, and wholesaler/distribution/brokerage sectors.

Participant titles included CEO, COO, CFO, CIO, owner, partner, chairman,

vice president, senior vice president, executive vice president, category

manager, merchandising manager, marketing manager, buyer,

and director/general manager.

Get commitment from the top. Make a clear case for long-term profitability. Evaluate the strategy from a holistic, risk-based approach. These are three critical milestones in getting leadership support for a long-term sustainable strategy.

10 11 Table of contents

Dexter ManningFood and Beverage Practice Leader

WATCH NOW: Manning discusses how sustainability motivates millennial buyers

Sustainability Q&AFood and Beverage Practice Leader Dexter Manningon how sustainability consumers are shaping theindustry’s future sustainability

13 12 Table of contents

How companies around the world act on corporate social responsibility

.

GLOBAL BENCHMARKING• In an interconnected global economy, knowing how businesses

around the world approach sustainability can help American companies benchmark their efforts.

• U.S. companies cite cost management as a main reason to implement corporate social responsibility (CSR), but their foreign counterparts are motivated by customer demand.

• Integrated sustainability reporting is gaining traction internationally — how will U.S. businesses respond to this potential change?

• A risk and operations management plan is critical if your company sources from countries that struggle with scarce raw materials, including water.

Foreign companies are more likely than U.S. firms to cite these reasons for adopting sustainability:

Customer demand +18 percentage points

Saving the planet +15

Public pressure +13

Tax relief +12

Talent recruiting +11

No matter the geographical location, businesses share the same top 3 CSR priorities:

U.S. Global

Donating to community causes/charities 93% 68%

Participating in community/charity activities 93% 65%

Improving energy efficiency/waste management 90% 65%

As we have read in the previous article, business as usual doesn’t seem to cut it anymore for many U.S. companies. But what about companies around the world? CSR data from the 2014 Grant Thornton International Business Report reveals surprising — even unexpected — differences between the U.S. and other countries.

CSR reporting: Little consensus feeds into lack of a global framework

21+79+D Only 21%of U.S. companies plan to disclose their programs during the next 5 years

1 in 4 are reporting on sustainability and/or CSR activities compared to 1 in 3 globally

Merging nonfinancial (i.e., sustainability, CSR) and financial reporting appeals more to international companies than U.S. businesses

89%of companies in India approve of merging the two reports, compared to 51% in the U.S

U.S. companies

Read more about this on our website

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Resource scarcity shapes the sustainability discourse in emerging marketsThe concept of sustainability comes to life vividly in emerging economies that rely exclusively on scarce natural resources. There, businesses struggle with the cost and supply of energy and raw materials, unlike their counterparts in wealthy countries. On the flip side, it is this struggle that’s fueling India’s ambitious plans to boost investments in solar power and Nigeria’s move toward a sustainable approach to extracting raw materials.

Grant Thornton International Business Report data brings to life the real challenges of doing business amid scarce resources in emerging economies. Here are some of the highlights.

Energy

• Businesses in emerging markets cite energy as more important to their growth strategy compared with counterparts in developed markets.

• More than three-quarters of African businesses cite the cost and supply of energy as crucial to their growth plans.

• Relatively few North American and European businesses are looking to move to greener sources of energy.

Sustainability

Availability

Cost

Percentage of businesses citing energy as important to their growth strategy

Raw materials

• Raw materials are relatively more important to businesses in emerging markets.

• Around two-thirds of businesses in Africa, Latin America and southeast Asia cite cost as important to them (or their supply chains) over the next 12 months (i.e., 2015).

• The availability and sustainability of supply is also very important in Africa and Latin America.

• Businesses in Europe are the least focused on raw materials, with fewer than half citing cost, availability or sustainability as important.

“The energy reforms agreed upon [in 2014] have not only opened up the oil exploration sector to foreign investors, breaking the monopoly of Pemex, but also the electricity market to small generators. A target to boost renewables 33% by 2018 has also been agreed upon, which has helped to attract record levels of clean technology investment.”

—Mauricio Brizuela, Salles Sainz, Grant Thornton (Mexico)

About the Grant Thornton International Business Report survey

The Grant Thornton International Business Report is the world’s leading

midmarket business survey, interviewing approximately 2,500 senior

executives every quarter from listed and privately held companies all over

the world. Launched in 1992 in nine European countries, the report now

surveys more than 10,000 businesses leaders in over 30 economies on

an annual basis, providing insights on the economic and commercial issues

affecting companies globally.

The data used to write this section is drawn from more than 2,500

interviews with CEOs, managing directors, chairmen and other senior

decision-makers from all industry sectors in midmarket businesses in 34

economies conducted in May 2014. The U.S. sample was 300 companies.

The definition of mid-market varies across the world: In China, we inter-

viewed businesses with 100–1,000 employees; in the United States, those

with $20M–$2B in annual revenues.

Sustainability

Availability

Cost

Percentage of businesses citing raw materials (including water) as important for them or their supply chain

European Union

Global

North America

Southeast Asia

Latin America

Africa

44%

55%

57%

65%

69%

49%

53%

54%

55%

68%

43%

40%

65%

71% 74% 65%

51%

30%

European Union

Global

North America

Southeast Asia

Latin America

Africa

51%

52%

54%

67%

72%

37%

55%

48%

56%

65%

30%

34%

64%

76% 79% 51%

49%

22%

17 16 Table of contents

BUSINESS STRATEGY• Strong commitment to sustainability from your leadership is critical;

arm yourself and your team with a well-documented business case

• Setting goals, metrics and a governance process will solidify sustainability as a key business strategy

• Don’t shy away from picking low-hanging fruit; starting small with energy-saving, waste-reducing strategies could pave the road to deeper changes that will raise your company’s sustainability score

• No one can be sustainable on an island; champion your cause among your business partners and open up for new ways to collaborate toward a shared goal

How to build a case for a sustainable business strategy

“How big is the area where the chickens are allowed to roam free?” asked a cast member in a Portlandia episode. Although the comedy series took the notion of responsible, ethical and sustainable food supply to a level of absurdity, you can bet that many of your customers are thinking along the same lines. And when they ask, how will your company respond?

There is a case to be made for change and we all agree that we want to do the right thing. But what does it really mean for your company? The thought of tackling an evolving concept as big as sustainability can seem overwhelming to contemplate and difficult to implement. The measurement tools may seem nebulous. And the initial investment can feel prohibitive. But it doesn’t have to be that way.

From our sustainability survey

44+56+D

10+90+D

44%

Only 10%

rated sustainability as extremely important in their company’s business strategy.

think sustainability is a fad that will disappear in a few years.

Nearly 7 in 10said sustainability is not only critical to growth but also profitable in the long run.

More and more companies — yourcompetitors — have put sustainability attheir business core and are partnering all theway down the supply chain. Businesses notfollowing suit are falling behind.

Read more about this on our website

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6 QUESTIONS TO FIND OUT IF YOUR COMPANY IS READY TO EMBRACE SUSTAINABILITY

Put a plan in placeWhen all the players in your company understand the importance and rewards of instituting a sustainability program, you’re ready to take the next steps:

1

1. Get C-suite buy-in — Having the leadership’s nod of approval is key, says Dexter Manning, Food and Beverage practice leader at Grant Thornton. “Education of stakeholders is job one, and the first hurdle for companies moving toward sustainable business practices.” Getting this buy-in can be difficult, because anything involving capital outlay can be hard to sell. The reality is that more and more companies (your competitors) have put sustainability at their business core and are partnering all the way down the supply chain. Businesses not following suit are falling behind.

Internally, sustainability efforts enrich the lives of employees. Says Audit Partner Tony Perazzo: “Employees are very proud to work for companies that are focused on sustainability. In return, businesses get an enriched culture, increased productivity and loyalty from their people. Ultimately, this serves to drive brand and market share.”

2. Do your due diligence — Jeff French, Manufacturing practice leader, recommends: “Talk to your tax advisers and work with them to find out what tax and governmental incentives and plans might be available to you.

2Do this before taking any other action of your own because, in many cases, federal governmental aid decreases as a company’s demonstrated sustainability practices increase.”

3. Go to the source — Just as you scrutinize your incentive and investment potentials, you must also do a deep dive into your company’s relationships with key partners and stakeholders. In particular, examine the practices and products throughout your supply chain. “No one can be sustainable onan island,” says Manning.

While scouring your supply chain from beginning to end, look for any deviation from your sustainability standards. More and more companies are doing this. Wal-Mart and Home Depot, for example, now send out sustainability questionnaires to vendors throughout their supply chains.

4. Create a baseline — As you study the links in your supply chain, take a baseline reading of your own company. Real metrics exist to measure your business’s improvement in sustainability (See p. 9 for some popular options), so it’s important to know where zero is for your company. Being able to cite these metrics in an annual report will demonstrate your company’s commitment to consumers and shareholders alike.

3

4

5. Pick the low-hanging fruit — It’s not necessary — and often not financially viable — to make major systemic changes in your business’s footprint. Even a relatively minor outlay into new equipment can lead to huge utility savings due to the increased energy efficiency of the product, and will also sharply cut your use of fossil fuels.

6. Take ownership — More and more companies, from small startups to global organizations, are appointing sustainability officers. This is important because measuring compensation against sustainability performance keeps it at the forefront of a company’s mind. Further, it signals to employees and stakeholders that sustainability is a long-term strategic business element, rather than a short-term tactical response.

7. Be realistic — Building a sustainability business plan; implementing it; and seeing real, measurable results takes time. Says Manning: “We’ve been going

6

5

down the wrong path for a long time. It’s going to take some time to turn it around.” But the good news is that, now you’ve got the tools to do it.

It’s possible to hit a roadblock when attempting such a large undertaking. Most often these hurdles are caused by the following: a) no top-level buy-in, which can cause problems when it comes to securing investment seed money, or b) even with C-suite buy-in, having trouble finding and securing investment capital.

Working with a financial expert can often lead to unexpected and substantial funding sources. Once the money is secured, demonstrating an expected ROI and allaying C-suite fears about the initial expenditure should help to drive alignment. Empowering employees to become shareholders in the plan will further raise enthusiasm throughout your organization.

Does senior leadership understand and openly support the benefits of building a sustainable business?

Do people at your company understand the benefits that increasing sustainability will bring, both economically and socially?

Is everyone from the top down in full understanding and agreement about what steps they plan to take? Do they understand their role in driving sustainability success?

Is management prepared either to appoint a sustainability officer or to reduce and/or reassign tasks to team members, as needed, to support the process?

Do you have alignment across the business, including alignment between resource allocation and investment?

Do you know what credits and incentives are available to help fund your sustainability plan?

20 21 Table of contents

Sustainability, mission focus, social action, organic foods, innovation — food and beverage companies are embracing a wide swath of strategies for success in today’s market, according to ideas shared at Grant Thornton’s annual Food and Beverage Industry Forum held in the fall of 2014 in San Francisco. Speakers and panelists included C-level executives from Clif Bar, Ocho Candy, Just Desserts, Mariani Packing Company, Hint Water, and Mattson and Company.

Here are some of the most interesting takeaways from the event:

• Sustainability pays off, but not always immediately. Companies are embracing sustainable business practices for the good of the environment but also to streamline operations, create efficiencies and cut costs. This takes a certain leap of faith since it often takes some time to pay dividends.

• Consumers are much more focused on where their food comes from and how it’s grown. They’re reading the labels closely. At the same time, there is still a lot of confusion about what certain terms mean, such as natural foods versus organic, and what’s actually nutritious. More consumer education is needed.

• Mission matters. It’s important to stand for something beyond just making a buck. What does my business stand for? Success also depends on finding people who share passion for the company’s mission.

• Community engagement is a critical aspect of employee engagement. Some companies pay employees to work regularly at a nonprofit of their choice. Others hire employees directly from under-resourced communities (i.e., empowerment zones).

• Innovation is tricky. Supermarkets say they want new and innovative products, yet often reject them for being unfamiliar. Interestingly, going directly to the consumer can sometimes be an effective strategy to get buyers to carry new products. When consumers ask for a product, it often moves the needle much more quickly.

• Small companies may need crossover appeal. When their product has crossover appeal, they can more effectively compete with specialized manufacturers and retailers in the organic space.

REAL-WORLD CHALLENGEHow do I prove sustainability ROI to my company’s skeptical leadership?

Document, document, document. Sustainability is often considered to be a soft area of focus, a vast array of green companies — from the biggest of the big to small mom-and-pop chains — are living proof that sustainability is driving success. Research the grants and funding that are available from federal, regional or local government bodies to show your leadership options to offset initial capital expenditure. These grants will also bolster your case because they provide future tax relief and cost savings through efficient equipment and labor processes. And don’t underestimate the power of peer pressure: More and more of the big guys, like Target, Wal-Mart and even McDonald’s, have put their chips on sustainability and appointed chief sustainability officers to oversee their efforts. This level of national buy-in may help to swing the pendulum in your favor.

21

Food and beverage industry leaders don’t put all their eggs in one basket

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SUPPLY CHAIN• Are you collaborating with your suppliers? If the answer is no,

make sure you start soon — the ROI of your sustainability-focused business strategy depends on it.

• Leverage your CFO to drive your goal-driven, measurable sustainability-related strategy up and down your supply chain.

• Turn to your middle ranks to drive change through the supply chain — they’ll have the motivation and agency to take action.

• Share the benefits of innovation with your business partners — no one can be sustainable on an island.

How to champion sustainability throughout the supply chain

The dialogue about what it means to be sustainable has broadened in scope — and it’s all about collaborating with your business partners and sharing measurable goals.

“Collaboration between manufacturers and their suppliers is imperative for competition,” says Robert Schwartz, Grant Thornton principal in the Business Advisory Services practice. With better, more sophisticated technology, seamless integration is now possible across the supply chain. Automatic trigger points allow businesses to reduce fire drills and get products to market more quickly and efficiently. In this environment, then, “relationships are crucial, to make sure that all three elements of competition — schedule, cost and quality — are aligned,” says Schwartz.

If a sound supply chain depends on sound processes throughout the whole chain, where does sustainability fit into the picture? Simply put, making changes to increase green production will, by the very nature of the enterprise, require streamlining and a radical rethink of the entire production process. And there’s only one way to get there: innovation.

From our sustainability survey

60+40+D 60%of food and beverage companies source from sustainable suppliers.

Retailers are the least likely to contract with sustainable suppliers.

Many shades of sustainable suppliers:

Only 4%of the companies source 100% from sustainable suppliers.4+96+D

Read more about this on our website

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Investing in innovation critical to manufacturers and suppliersIn an interview with Harvard Business Review, Peter Senge described innovation as “what good businesses do best.”1 To overcome obstacles to sustainability and help grow your long-term strategy, Senge says, it’s vital to surround yourself with employees who can think creatively and be innovators, keeping in mind the larger business context and company end goals. These innovators will lead the scope of product and process redesign, and will need to think across business platforms to arrive at the desired end.

Track suppliers with the right metricsAccording to Schwartz, there are three important metrics to determine success or failure in any initiative: schedule, cost and quality. And it’s important to create a baseline for your suppliers right away, as soon as you form a relationship or initiate sustainability efforts. It’s surprising, he says, how few businesses take this first vital step. “If companies have good information — and most companies don’t — they can quickly learn how vendors and suppliers are performing, and attack the issues, says Schwartz.” And by spending that money to fix the problems, they will in turn make more money by having more effective and streamlined processes and procedures.

All this leads back to sustainability. Making seemingly small process changes at the supplier and vendor level quickly adds up to a more sustainable business and financial growth.

Empower your middle ranks to leadIt’s imperative to get C-suite buy-in, of course, both for social and financial reasons. However, drivers of sustainable change may be much more likely to be found among the middle ranks. They are process-improvement number crunchers or whiz-bang techies who can see the domino effect of change and the ultimate financial win at the endgame.2

“I’m a big proponent of shared benefit,” says Larsh. As innovation is occurring all the way down the the supply chain, manufacturers and suppliers should both be able to agree: “Here’s where we’re both going to improve — be it packaging, or process improvement. Let’s both have skin in the game.” Some companies, Larsh notes, have had great success in that kind of partnership, wherein both sides invest and both reap the fruits of the benefit.

Schwartz agrees: “It’s got to be a win-win. If a supplier demonstrates behavior that is good for me and my business (and vice versa), I want to make sure they are rewarded for it.”

WATCH NOW: Manufacturing Practice Leader Jeff French on how manufacturing CFOs can drive a sustainable supply chain

1 Prokesch, Steven. “The Sustainable Supply Chain,” Harvard Business Review, October 2010. See www.hbr.org for details.

5 QUESTIONS TO CONSIDER WHEN CHANGING SUPPLIERS Switching to a new vendor may be the perfect time to establish a baseline for your sustainability goals and related expectations. Procter & Gamble, for instance, offers a very comprehensive Supply Chain Environmental Sustainability Scorecard that may be of help to you. But first, here are some questions to consider, as you take a new supplier’s sustainability temperature:

1

2

3

4

5

What is your company’s policy on environmental sustainability? Who is in charge of implementing your programming?

What steps have you taken over the past three years to increase sustainability, and what are your resulting performance indicators?

Where and how do you source your raw materials?

How do you deliver the final product to your partners? What is your transportation carbon footprint?

What is your company’s five-year plan to increase sustainability and decrease your footprint on the planet?

More and more, manufacturers are innovating to attract sustainable suppliers — which is a complete about-face from the previous balance of power, notes Brian Larsh, director in Grant Thornton’s Business Advisory Services practice. For example, Unilever — a sustainability powerhouse — has actually created the Unilever Sustainable Living Lab, which brings together representatives from governments, nongovernmental organizations and businesses to review everything from sustainable sourcing, production and distribution, consumer behavior, and change to waste and recycling. In its first outing, the Lab attracted 2,200 registrants from 77 countries.

2 For more insight, see “From Obligation To Desire: 2.5 Billion Aspirational Consumers Mark Shift in Sustainable Consumption,” originally published by CSRwire on Oct. 3, 2013.

27 26 Table of contents

The nuts and bolts of sustainability reporting

Middle-market companies have distinct advantages over bigger firms in pursuing sustainability goals. “It’s sometimes easier for closely held companies to pursue sustainability initiatives than large corporations,” says Tony Perazzo, Grant Thornton Audit partner. “Closely held businesses that don’t have to meet Wall Street or private equity expectations each quarter can take a 20-year view on sustainability without worrying about coming up with metrics right away.”

As these companies have matured with sustainability key to their business model, they are better positioned to measure sustainability efforts and maximize their return. Here are the fundamental first steps:

1. Assess what aspects of sustainability are relevant and important to the company and its stakeholders.

2. Consider what your investors, lenders, customers and employees believe are material sustainability issues for the business.

3. Design goals and programs that fit your company, not someone else’s. Decide whether and to what extent the sustainability goals ought to include vendors and other third parties.

MEASUREMENT AND REPORTING• Don’t dive into sustainability reporting within the first year of

the program; set realistic and measurable goals first, put a governance process in place, and then choose what kind of reporting you want to do

• Your CFO will be your best reporting ally — consider involving him or her in the early stages of the sustainability program to get early support

• Sustainability reporting will signal to your investors that the company is healthy and moving in the right direction

From our sustainability survey

3 in 4

58%

24%

50%

16%

Top metrics:

Least popular metrics:

food and beverage companies measure their sustainability efforts.

Energy consumption

Total waste

Carbon footprint

LEED certification

Read more about this on our website

28 29 Table of contents

Figure 1: Sustainability reporting regimes

Regime Standards

Global Reporting Initiative Well-established international framework used by thousands of companies to communicate with all stakeholders

Sustainability Accounting Standards Board

U.S.-based regime aimed at investors and conceived within the context of SEC Form 10-K and its management discussion and analysis section

International Integrated Reporting Council Published integrated reporting framework for reporting about value creation to investors

Carbon Disclosure Project Supports a variety of programs for company reporting of greenhouse gas emissions

ISO 14000, 26000 Standards for, respectively, environmental management and social responsibility

Dow Jones Sustainability Indexes Family of indexes evaluating economic, environmental and social performance

FTSE4Good Indexes for several stock bourses based on CSR criteria

AccountAbility AA1000 Standards, including those for assurance

Challenges in developing measurement systems Gaining CFO support — The finance function’s deep knowledge of processes to gather data and report information is often key to successful measurement of sustainability efforts. The CFO’s understanding of the need for process consistency and internal controls adds tremendous value to companies’ sustainability efforts. He or she can also assist in developing management accounting techniques to measure the inputs and outputs of sustainability projects. Gaining your CFO’s support may hinge on making a compelling business case (for ideas, see article on p.17).

4. Validate the initial list against external sources, such as the sustainability annual reports of peer companies and the industry-specific reporting guidelines offered by Global Resources International and the Sustainability Accounting Standards Board (see Figure 1).

5. Manage regulations to reveal unexpected opportunities. Consider the conflict minerals reporting mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act. A burden to be sure, but it’s also helped companies gain a lot of transparency about their suppliers and supply chain logistics. The smart firms use that knowledge to improve their operations.

Inadequate or nonexistent information systems — Does the company have the systems and people who can capture the necessary information? “Sustainability data doesn’t come easily out of the accounting system,” says Jeff French, Manufacturing practice leader. “In fact, the data may not even be in any system at all. Sometimes you’ll need to start by tracking the information manually.” Building the IT function for sustainability and ensuring that it is adequately resourced may require significant effort by the sustainability champions at the firm. Gathering data from diverse sources — Difficulties in data collection multiply for companies whose data resides in decentralized locations. Various departments, divisions, subsidiaries, vendors and others may be incorporated into sustainability reporting depending on the desired (or required) reporting boundary. Often the different IT systems are not under common control, so the cooperation amongst many parties will need to be enlisted for accurate and timely reporting.

Reporting standards: What you need to knowNo single organization has the stature or regulatory authority of a FASB or IASB when it comes to sustainability reporting (see Figure 1). The lack of consistency of reported information extends to variations in what companies report from year to year, and across companies within an industry.

“Ultimately, we’re going to be moving to a common platform for reporting, generally accepted sustainability principles, if you will,” says Dexter Manning, Food and Beverage practice leader. “That’s not here yet. But the lack of standards should not be paramount in the decision-making of middle-market managers, and it shouldn’t deter them from pursuing sustainability projects. What’s important is that sustainability is something that consumers are increasingly demanding; that companies continue to move down the sustainability path; and that they effectively communicate their progress to customers.”

30 31 Table of contents

Step 3: Solidify your governance processes to ensure continued measurement and move on to reporting internally.

3 key reporting considerations1. Assurance — As sustainability reports spread, the demand for assurance on them grows. “A major issue with sustainability reporting is the lack of credibility (both within companies and externally) because the reported information hasn’t been audited,” says Dorsey Baskin, Audit managing partner. “We’ve seen this rob XBRL [eXtensible Business Reporting Language] information of much of its momentum and potential value, and I don’t want to see it happen to sustainability reporting.” In the United States, auditors have the AICPA’s attestation standards available to guide examinations and reviews of sustainability information and controls over such.

2. Internal control — The spotlight on the integrity of sustainability reports has been raised with the adoption of Committee of Sponsoring Organizations of the Treadway Commission (COSO) Framework 2013. Effective Dec. 15, 2014, the updated framework emphasizes that its scope extends to nonfinancial reporting generally, and sustainability reporting specifically. Principle 8 lists the areas organizations typically consider for fraud potential and specifically mentions nonfinancial reporting, including sustainability reporting.3 The raised profile of nonfinancial reporting in COSO may spur CFOs to take an enhanced interest in its quality and accuracy.

3. Integrated reporting — Integrated reporting is a different approach to providing investors with information. It involves reporting on the creation (or destruction) of value, typically focused on certain capitals — intellectual capital, human capital, financial capital, etc. Currently, few middle-market companies are doing integrated reporting. Whether they adopt it will depend on the company’s culture, tone and direction of senior management. It will also be driven by the company’s branding and how public it is (i.e., it’s more likely that an admired, publicly traded company with a very well-known brand will consider integrated reporting).

Step 1:Identify an area that you think your company can make measureable improvements in and set a baseline measurement.

Step 2: Identify specific ways you can achieve your goal and then design a plan to achieve it, including deliverables, target dates and ownership.

Step 4:Once internal reporting is perfected, set your eyes on external reporting.

My manufacturing company has never reported on its sustainability efforts. What are the first steps to get started?

Embracing sustainability at a deep level requires not only strong execution, but also accurately and effectively measuring performance and communicating results to both internal and external audiences. It may seem daunting at first, but just like your company’s annual reports to stakeholders, sustainability reporting keeps tabs on your program’s health.

3COSO – Committee of Sponsoring Organizations of the Treadway Commission Internal Control Framework, Internal Control – Integrated Framework, p. 52

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How thinking laterally can maximize the benefits of green tax incentives and credits

The government finds itself in a rather unusual position: It is trying to give away money but isn’t getting any takers. Well, not no takers — but it seems that relatively few companies are aware of the significant local and federal incentives, tax breaks, and cash grants that their sustainability efforts could be buying them.

Tim Schram, Grant Thornton managing director of the Credits and Incentives practice, says “If companies work it right, businesses can actually earn significant dollars through some of these programs — it turns into real money.”

Step 1. It’s about thinking laterally Partnering with governmental agencies can bring about large savings and a huge net increase in growth. For example, the New York State Energy Research and Development Authority (NYSERDA), which is a public benefit corporation, offers objective information and analysis, innovative programs, technical expertise, and funding to help New Yorkers increase energy efficiency, save money, use renewable energy, and reduce reliance on fossil fuels.4

TAXES AND INCENTIVES• Federal, state and local green tax incentives are overlooked by the

vast majority of companies

• Finding the right incentives involves lateral thinking — what kind of incentive can grow your business over both the short term and the long term?

• Specialized help will help you sort through the myriad options and find the best fit for your goals

4 www.nyserda.ny.gov/About.aspx

From our sustainability survey

1 in 3

Only 19%

Federal 13% Local 22%

companies weren’t even aware that incentives are available to them.

of food and beverage companies have taken advantage of local green tax incentives.

A minuscule 8% of companies have leveraged federal programs like pollution credits.

Retailers were more likely to have benefited from federal and local incentives.

19+81+D 8%only

Read more about this on our website.

34 35 Table of contents

Case in point: Steven Winter Associates. In 2007, this environmentally friendly building design, construction and operation firm partnered with NYSERDA as a Multifamily Performance Partner. Since then, the firm has seen significant growth, largely resulting from affordable housing building owners enrolling in the program.

Another example can be found in New Jersey, where, under the state’s SmartStart Buildings program, qualified businesses can receive up to $4 million in cash grants to fund significant investments in measurable energy efficiencies at existing industrial locations.

But the benefits that can come to qualified companies don’t stop with the funding. Once you’ve installed the new equipment or adopted the new policies and procedures, further growth opportunities may appear that you didn’t initially foresee.

“We worked with one company, that engaged in a sustainability program to reduce their waste,” says Schram.” It turned out that the byproduct of this method was methane gas, which the company was then able to burn as fuel for their plant.” In this case, not only did the company benefit in the anticipated manner, but they were also able to — laterally — further reduce their carbon footprint and save on energy costs as well.

Step 2: Find the right fitCompanies looking for a good place to start might be well served to look into one or more of the following most widely used state and regional sustainability credit and incentive programs, including:

• California Self-Generation Incentive Program (SGIP): SGIP offers incentives in the amount of $1/W to $4.50/W for renewable energy systems. Projects receiving incentives funded by a non-investor-owned utility ratepayer receive an award discounted by a rate of 50% of the other incentives.

• ReCharge New York power program: This statewide economic development power program for qualified businesses and not-for-profit corporations is designed to retain and create jobs through allocations of low-cost power. Participating New York businesses can save up to 20% in electricity costs.

• Tennessee Valley Authority: This government-owned corporation and its distributors offer a competitive utility savings opportunity for businesses in their service territory that are investing in a new or existing facility. The award is based on an energy-efficiency commitment, job creation and retention, capital investment commitments, average wages paid, and the business’s load factor.

• Georgia sales and use tax exemption: The exemption applies to energy used directly or indirectly in qualifying manufacturing plants and will phase out over a four-year period. This exemption does not include the generation of electricity.

Think creatively about how you might be eligible for help. And remember that these offerings are often holistic incentives. They are not largely business-category specific, which is of benefit to you, because you will have more areas of potential funding to pursue.

Step 3: Research, research, researchConsider assigning a dedicated person (or team) from your own company to manage the project, from research to application to the resulting program rollout. Here are a few ideas to guide your efforts:

• Brainstorm the areas where your business falls short in sustainability, and document where you have the most potential for growth. These ideas can be very granular at this stage (and often they often should be).

• Once you have the best ideas on the table, begin cutting. When instituting a major shift like this, it’s a good idea to limit your initial list of to-dos to a manageable number of target areas. Areas of focus should be: best fit for the company; best incentive package to limit initial financial outlay; best long-term ROI.

• Create a detailed action plan, with targeted and measurable dates and deliverables. In other words, treat this area of growth as you would any other initiative in the physical space, rather than seeing it as a maybe, or potential, or interesting intellectual exercise.

Schram advises: “Don’t be afraid to be aggressive. Challenge yourselves and your budgets to identify where the funding will come from, in order to increase ROI. The best sustainability strategies are not just done for the public good — they also make good sense, from a financial perspective.”

Want a comprehensive list of incentives?Find state and federal sustainable building incentives at epa.gov and dsireusa.org. Business.usa.gov also provides many useful federal resources to encourage you to take advantage of lateral-thinking programs that could be the right fit for your company.

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RISK MANAGEMENT• One of the greatest risks companies face is ignoring

sustainability as the way of doing business in the future

• Risk presents opportunities, especially for responsible companies; for example, eliminating suppliers that don’t abide by conflict mineral regulations will boost your company’s sustainability efforts

• Always think about risk in terms of the 3 P’s — people, planet, profit — for a holistic view of your risk profile

How to incorporate sustainability-related risk into an existing ERM framework

Risk is a loaded term. Businesses don’t want to be exposed to it, and financial advisers want to steer clear of it. But sometimes taking a risk can reap far greater rewards than staying the course. In the case of sustainability, failing to take action might actually expose your business to increased reputational risk, according to Bailey Jordan, a partner in Grant Thornton’s Governance, Risk and Compliance practice. The risk “is not a threat to green companies, but rather to non-green companies. Stakeholders may be vocal if they perceive a company is not doing their part to be socially responsible and respectful of people, cultures and the natural environment,” Jordan says.

Embracing risk can be an opportunity to grow your business, says Jose Molina, Grant Thornton principal of the Financial Services practice. He cites the Equator Principles (see sidebar on p. 39) as “a model for designing services and products that are in compliance with sustainability, but also give the company an advantage over businesses who are not following the principles. This is a real way they can grow revenue while embracing corporate sustainability.”

From our sustainability survey

26+74+D Manufacturers are more likely to describe themselves as sustainability innovators, leading with large-scale, deep-reaching sustainable strategy.

1 in 4food and beverage distributors are not sure where their company falls on the sustainability adoption curve .

26%consider their companies to be mature on the sustainability adoption curve, meaning that they are already controlling the risks and costs associated with programming.

Read more about this on our website.

38 39 Table of contents

The 3 P’s

The triple bottom line is an accounting framework that measures ecological, environmental and social responsibility — intangibles that until recently have been difficult for risk assessors to quantify. The triple bottom line refers to the 3 P’s: people, planet and profits. There are tangible things you can do to measure how these factors can affect the growth of your business.

Sustainability is more than just looking for ways to cut your electricity bill or reduce packaging or fuel costs. It’s about corporate social responsibility and transparent economic performance. If your business is thinking about adopting a sustainability strategy, it is crucial that you consider these intangibles to make sure you’re covered in all areas.

In fact, the biggest risk in embarking on a strategic sustainability program is associated with the initial financial outlay — the cost to redo existing HVAC, for example — and the resulting effect on your business’s working capital. For that reason, numerous grants and incentives are available at the local, regional and national level to help offset this risk.

A 6-point ERM plan for sustainable companiesMost likely, your company already has a risk management plan in place. Follow these steps to integrate sustainability-related risks into your current framework:

1. Align from the top. Without management’s support and enthusiasm, it will be difficult for a deep-reaching sustainable strategy to succeed. They need to know what the risk mitigation strategy looks like, how much risk they’re willing to assume and how high the stakes can become.

2. Document existing ERM strategy. Take the time to create a baseline. What is your focus? What measurement tools and documentation are already in place? If sustainability is a new area for your company, you may need to consider realigning your tools to make sure you are covered (see Figure 2).

3. Get your key stakeholders on board. From suppliers to distributors, complete agreement is vital to the success of your ERM plan. Let people weigh in on the risk you are about to assume. Don’t forget stakeholders who may not be directly linked to your business — such as local community leaders, green activist groups and educators — as these people could have an impact on your progress.

4. Be responsible. Seeing things through the lens of corporate social responsibility will help you align your plan with decision-makers who will support your cause and reduce your risk. Remember that social responsibility is a strategy, not a tactic. Keeping this approach top of mind will be key in the future.

5. Measure your progress. Create a baseline at the beginning of your journey and keep track of your progress. What does your current risk look like? How is your ERM framed? Include the triple bottom line and the 3 P’s (see sidebar). How is this undertaking affecting people, the planet and your profit? Determine your goals and assign steps to make them happen.

6. Commit to the process. Sustainability is becoming an industry priority, and companies that don’t get on board will find themselves out in the cold. Dedicate a team whose job it is to make a plan, analyze risk, conceptualize reward and move the process along. Sustainability will not become an integral part of your business unless you make it one.

Figure 2: Find the best matchWhich assessment tool is the right ERM match for your business?

COSO: Enterprise risk management — Integrated framework

ISO 31000: Risk management — Principles and guidelines

Issued in

2004 by the COSO. Although COSO has been widely used in its original 2004 form, it recently released an online survey designed to capture views and insights regarding the current framework and to collect suggestions for improvements.

2009 by the International Organization for Standardization (ISO)

Emphasis

Provides a flexible evaluation standard against which you can evaluate your current ERM process. While ISO 31000 defines itself as a set of principles a business can use to create its own ERM, COSO is more focused on performance-based risk management.

Concentrates on integration, implementation and change themes. ISO 31000 puts a greater emphasis on risk management principles, allowing an organization to develop its own risk management plan, while COSO is more focused on performance-based risk management.

Strategic differentiator

Focuses on performance-based risk management

Focuses on risk management as a strategic discipline for making risk-adjusted decisions

Intended use Offers compliance-based functionality Provides guidance on the nature of the risk management process and how to implement it.

Taking all of these factors into consideration, one thing is clear: We can no longer predict the future by analyzing the past, so having a team to measure and assess ongoing risk will be key to your strategic success.

41 40 Table of contents

PERFORMANCE IMPROVEMENT• If you want to ensure continued support and success of the sustainability

program, consider embedding it into the business performance improvement framework

• The supply chain is a major opportunity to enhance the performance of your sustainability strategy; create baselines and hold your suppliers accountable to meet your standards

• Check the health of your IT infrastructure — the quality of the data you collect as well as your company’s reputation hinge on your technology platforms

Lean, green, profitable

When the right metrics are used, embedding the sustainability program into existing performance improvement processes can boost its success and, ultimately, the ROI. Let’s take a look at how this integration can play out.

Total overhaul or incremental change?When weighing in on performance management programs, is it better to start fresh or adapt the current model? Rob Tague, director of Grant Thornton’s Corporate Advisory and Restructuring Services group, thinks that in order for any transformational effort to be considered successful, a few things must happen:

• Processes must achieve planned results.

• Technology must work effectively and efficiently.

• Client expectations must be met or exceeded.

• People must understand and adopt the ideas that are being implemented.

Therefore, in order to evaluate what needs to change in existing performance management systems or what needs to be created in new ones, you need to figure out your unique situation.

Start by asking yourself what your opportunities are, and how you are currently performing in these areas:

• Financial and operational performance metrics

• Existing processes

• Current organizational structure

• IT architecture diagrams and performance metrics

Then ask: How do we achieve the results we want to achieve? Do we have the basic pieces in place, or do we need to start again? To discover this, examine a detailed design of all the necessary implementation components, including:

• Processes

• Enabling technologies

• Organization

• Metrics

• Dashboards

Read more about this on our website

42 43 Table of contents

Once you’ve got this all figured out, says Tague, you can develop an implementation strategy, revise your ROI analysis, and summarize and present solutions and final analysis to stakeholders for review. And then, he says, you’re ready to implement. Can you proceed with your current tool, or do you need to start again? Every situation is different, but by completing the process we outlined, you’ll know which answer is right for you.

Profitability improvementThere are two primary ways that sustainability initiatives drive improved profitability:

Enhanced efficiencies: Analyze activities that you’re performing in your business, and identify the relative cost and environmental intensity of each. The goal is to move away from those that are high cost and/or have a high environmental impact, and toward those that are low cost and/or with a low environmental impact. This is an enhancement of traditional management tools, such as activity-based costing/management (ABC/M) systems, which analyze the cost of a company’s activities by adding a data layer for environmental footprint. An environmental sustainability ABC/M model evaluates the cost and environmental footprint as separate criteria and allows for a cross-analysis of the cost per environmental emission for particular activities. It’s important to understand what these costs may be and how to layer them into your company’s decision-making process. Then you can get to work.

Compliance: Regulation can take the form of fines for noncompliance or increased cost associated with new technology, such as upgrades needed to reduce emissions. Says Mark Lemon, manager in Grant Thornton’s Global Public Sector practice: “Companies that understand their environmental footprint — and analyze and evaluate the processes, activities and products that contribute to it — are better equipped to respond to regulations, placing them ahead of competitors who don’t or can’t evaluate their environmental impact.”

Supply chain visibility“Cost, schedule and quality have traditionally been the most important metrics to track the success and failure of supplier relationships. Sustainability has entered the picture in recent years as the fourth critical factor,” says Robert Schwartz, principal in the Business Advisory Services practice at Grant Thornton. Create a performance baseline for your suppliers right away, as soon as you form a relationship or initiate sustainability efforts. It’s surprising, he says, how few businesses take this first vital step. “If companies have good information — and most companies don’t — they can quickly learn how vendors and suppliers are performing versus expectations and requirements, and attack the issues.”

IT managementOnce you’ve invested in advanced management tools, it is vital that you have an IT infrastructure that can keep up with the demands placed upon it — to collect, manage and protect your valuable data. ABC/M, for example, is a data-intensive management tool. There’s no doubt that it could chew through your existing resources in no time. But it’s necessary to use what you’ve got and to increase the size of your infrastructure, says Lemon, because “granular data related to resources, activities, products and services is critical to identifying the relative intensity of those resources, activities and products.”

And it’s not just about data evaluation, notes Bailey Jordan, partner in Grant Thornton’s Governance, Risk and Compliance practice. If your IT infrastructure is inadequate, it could be easy to walk into communication black holes, which are a real reputation risk for your business. Within the whirlwind of social media, he notes, “ignoring or being slow to respond to questions about social responsibility could impact company or brand reputation with the result being lost sales and shareholder value.”

“Cost, schedule and quality have traditionally been the most important metrics to track the success and failure of supplier relationship. Sustainability has entered the picture in recent years as the fourth critical factor.”

—Robert Schwartz, National Performance Improvement Leader, Grant Thornton

REAL-WORLD CHALLENGEOur distribution company wants to reduce its impact on the environment. What are the most cost-effective tactics to consider?

Because distribution is an incredibly low-margin industry, it’s vital to minimize the initial outlay costs to the business. Reducing operating costs through efficiencies is the easiest way to both grow your business and adopt a sustainable business practice. As equipment becomes obsolete, replace it with the most eco-friendly options. Not only are there substantial tax breaks for doing so (see p. 34 for some ideas), but there are often cash-in-hand rebates on offer as well. Upgrading your fleet to hybrid will reduce your transportation and fuel costs, and will also be a selling point for your company. Even small changes like installing electric car charging ports can have a big impact — the important thing is to get started.

44 45 Table of contents

Mike CaponePartner, Audit Services, Practice Leader, Distribution

Sustainability Q&ADistribution Practice Leader Mike Capone on what the futureholds for distributors in a sustainable society

47 46 Table of contents

HIRING AND RETAINING TALENT• A company’s values and dedication to responsible business are top

of mind for employees and new talent

• Is your company communicating its sustainability vision clearly to employees and potential hires? If not, you’re missing out on a big opportunity to motivate your people

• A tangible commitment to social and environmental values — not profits at any cost — is key to a thriving corporate culture

Why a commitment to sustainability can attract and retain the best talent

As employers begin to loosen their belts and look to add bench strength to their companies, they are seeking out the best of the best. Potential hires, too, are being selective in choosing their next employer, and some of the criteria that they are basing their choices on may seem surprising.

It is often CSR and its larger umbrella — sustainability — that seems to motivate the best talent these days. A 2014 study conducted by the nonprofit group Net Impact showed that business school graduates would take a 15% pay cut to:

• Work for an organization whose values are like my own (88%)

• Have a job that seeks to make a social or environmental difference in the world (83%)

• Have a job in a company committed to corporate and environmental responsibility (71%)

The view from both sides of the fenceThese findings are not surprising to Winnie Steffenson-Klick, director in Grant Thornton’s Compensation and Benefits Consulting practice. “Corporate values are a key factor in a company’s ability to attract and retain a productive workforce,” she says. “Research shows that employees who are most highly skilled and sought after are those who care the most about corporate social responsibility.”

Similarly, she notes, companies that care the most about their communities and the environment also tend to demonstrate a strong commitment to the health and well-being of their employees. “These values go hand in hand,” Steffenson says. “Employee engagement is a huge driver of productivity. Companies that implement sustainable business practices often see employee commitment rise. The reason for this is that employees feel a strong link to the values of their company.”

“Employee engagement is a huge driver of productivity. Companies that implement sustainable business practices often see employee commitment rise. The reason for this is that employees feel a strong link to the values of their company.”Steffenson-Klick’s, Director, Compensation and Benefits Consulting Practice

Read more about this on our website.

48 49 Table of contents

This commitment has a domino effect: Not only can a company with a solid CSR strategy attract the best talent, but it also retains the best people — those who appreciate the company’s culture and want to continue to be a part of it. “This is continually demonstrated in the 100 best places to work list,” says Steffenson. “Over and over, we see that companies who are employers of choice are those with sustainable practices in place. Again, companies that care about the environment are also those who demonstrate a strong community focus and a commitment to the well-being of their employees.”

It is important to note, however, that companies who are winning in this space are those with a genuine, demonstrated commitment to CSR. Businesses who merely pay lip service to the strategy will quickly find themselves exposed. “The culture of a company is highly visible to the public,” says Steffenson. “It directly correlates to its business image and the ability to attract and retain great employees. If employees experience a disconnect between what is being communicated and what is actually being done, they are more likely to leave.” This can damage your business, both in terms of reputation and talent base.

Infusing your culture with sustainability-related valuesSo, with this in mind, how can your company begin to adopt sustainable business practices and create a culture of sustainability? This process should start at the top. “Sustainability has to be an integral part of your business culture,” says Steffenson. “It has to start with a strong commitment from the senior leadership team, and it has to be owned by everyone in the organization.”

If your company is ready to commit to sustainable business practices, you may start by creating a set of principles that will guide your business. The International Institute for Sustainable Development provides a checklist for employers that starts with creating a mission statement, followed by establishing metrics for measuring and reporting. “You don’t have to start with big changes; it’s better to set goals that are achievable,” Steffenson says.

Once the CSR plan is in place and has strong leadership commitment, ask your team how these changes can be implemented. Creating internal champions is key here. “We’ve seen great success with a company that assembled a sustainability team who really helped get the initiative going throughout the organization,” notes Steffenson. And, as with any major change initiative, it is important to communicate — make sure employees know what is changing and how these changes support the CSR plan. As sustainable practices take hold, employees will start coming forward with suggestions for additional changes. This should be encouraged and rewarded.

Making sustainability a priority can enhance your work environment and improve the bottom line — it is no longer a nice-to-have business strategy; it is an integral component to managing your business, and can be a valuable differentiator in attracting and retaining a talented workforce.

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Dorsey BaskinManaging PartnerAssurance Services DevelopmentT +1 214 561 2328E dorsey.baskin@us.gt.com

Bailey JordanPartner Governance, Risk and Compliance PracticeT +1 919 881 2790E bailey.jordan@us.gt.com

Dexter ManningPractice LeaderFood and BeverageT +1 404 475 0061E dexter.manning@us.gt.com

Robert SchwartzNational LeaderPerformance ImprovementT +1 832 476 3670E robert.schwartz@us.gt.com

Mike CaponePartner, Audit Services, Practice Leader, DistributionT +1 312 602 8020 E michael.capone@us.gt.com

Brian LarshDirectorBusiness Advisory ServicesT +1 414 277 1588E brian.larsh@us.gt.com

Jose MolinaPrincipalFinancial ServicesT +1 312 602 8330E jose.molina@us.gt.com

Tim SchramManaging DirectorCredits and IncentivesT +1 312 602 9022E tim.schram@us.gt.com

Jeff FrenchPractice LeaderManufacturingT +1 920 968 6710E jeff.french@us.gt.com

Mark LemonManagerGlobal Public SectorT +1 703 637 2949E mark.lemon@us.gt.com

Tony PerazzoPartnerAudit ServicesT +1 415 365 5446E tony.perazzo@us.gt.com

Winnie Steffenson-KlickDirector Compensation and Benefits ConsultingT +1 612 677 5477E winnieklick.steffenson@us.gt.com

Rob TagueDirector Corporate Advisory and Restructuring ServicesT +1 312 602 9083E rob.tague@us.gt.com

Subject matter consultants

WANT TO LEARN MORE?We hope this hands-on guide to sustainability as a business strategy helped you identify a new area of growth for your company.

Find more ideas at grantthornton.com/sustainability or connect with our team of professionals who contributed to this publication.

About Grant Thornton LLPGrant Thornton is one of the world’s leading organizations of independent audit, tax and advisory firms. These firms help dynamic organizations unlock their potential for growth by providing meaningful, forward-looking advice. Proactive teams, led by approachable partners in these firms, use insights, experience and instinct to understand complex issues faced by privately owned, publicly listed and public sector clients and help them to find solutions. Over 35,000 Grant Thornton people in more than 100 countries are focused on making a difference to clients, colleagues and the communities in which we live and work.

“Grant Thornton” refers to Grant Thornton LLP, the U.S. member firm of Grant Thornton International Ltd (GTIL), and/or refers to the brand under which the GTIL member firms provide audit, tax and advisory services to their clients, as the context requires. GTIL and each of its member firms are separate legal entities and are not a worldwide partnership. GTIL does not provide services to clients. Services are delivered by the member firms in their respective countries. GTIL and its member firms are not agents of, and do not obligate, one another and are not liable for one another’s acts or omissions. In the United States, visit grantthornton.com for details.

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