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7 Reasons Companies Need Natural Asset Portfolios

Why, after over a decade of progress, are customers, shareholders and employees still skeptical about corporate sustainability programs? Here are seven reasons why brands need to begin building natural asset portfolios in order to change this:

#1 Everyone already knows about your corporate footprint

It is difficult to hide anymore, as new levels of transparency regarding sustainability are shining lights into supply chains and resource dependencies. Your company may be relatively clean, with little apparent impacts, but things have changed. If you are growing quickly and have a visible brand, sadly you may be at even more risk of public scrutiny than a "dirty" company with less consumer exposure. And one social media post away from a chain of events you are not fully prepared to manage.

Since your corporate footprint is not a secret, it is better to take ownership of it now by making positive steps toward thoughtful ecological offsets — and be able to communicate this clearly and strategically to your customers. If you are not already discussing the entirety of your corporate footprint, you are at risk of somebody else hijacking your story to prove a point when you least expect it. It is really that simple.

How to effectively embed DEI into your company

Hear more from Ford's Director of Community Development, Pamela Alexander — on setting goals and measuring performance around justice, equity, diversity and inclusion — at Integrate '20, Nov. 9-11.

#2 Your customers think your sustainability program is unremarkable

Your sustainability program sucks. Or at least that is what shareholders and customers seem to be saying. People are not necessarily impressed anymore with how much you recycle or even how much waste you have reduced. Waste reduction and benchmarking is standard business practice now, and since often these efforts often end up saving money for the company it really has come to be expected by your customers. Here is another problem: Sustainability efforts based solely on relative reductions of raw materials or waste are stories that are hard to communicate with your customers, are fleeting, and are easy to forget. On the other hand, investments in natural capital or renewables infrastructure symbolize commitment, are long-lived and are by nature memorable. A truly remarkable sustainability program that resonates with your customers therefore needs to provide depth from both benchmarking and natural investments.

#3 Eco-assets are cheaper than you might think

There are many ways to make significant impact with ecological or renewable energy investments. Every state in the country has hundreds of unfunded or underfunded ecological programs or projects identified, and the only thing missing is an investor. Pick one that is meaningful to your brand and resource needs, or proximal to your operations. Be picky about who you work with. Make sure you get all the necessary legal entitlements in order to assure its success. Do your best to measure and account for the uplift, but don't get overly clever with the metrics. Make conservative financial forecasts into the future to ensure the long-term success of the project. Pick a program or project that provides gives the most positive change with the least amount of money … and then repeat.

#4 Ecological assets can be linked to resource hot spots, supply chains and individual stakeholders

It is okay to invest in resources that are linked to your resource dependency hotspots, or in areas where you may need future goodwill to expand or continue operations. When you make investments into natural systems you do, however, need to own the story. It is important to communicate you are making investments that will help ensure your products and raw resources are sustainable for decades to come, so don't leave people guessing about your motivations. And don't forget other stakeholders. Most natural capital investments have opportunities to benefit from multiple layers of involvement on your investment. Neighbors, employees, tribes and other organizations are great partners and provide validation to your cause, as long as you are genuine and clear about what boundaries are necessary to the success of the investment. The more that benefit from your investment, the merrier, right?

#5 Tangible assets and programs are the best way to prove your sustainability commitment

Reducing the size of your company’s overall footprint is great, but showing tangible proof of your commitment to offset it is indisputable. Groundwater recharge, renewables investment or habitat/watershed preservation are all great examples of tangible and "remarkable" assets that can support your company’s brand and core values. With some corporate revenues rivaling GDPs of entire countries,), the sheer business act of taking up space and consuming water, fuel and other precious resources provides easy opportunities for growing companies to show their commitment.

#6 Natural asset portfolios can be interwoven into your brand story

Sustainability departments often suffer from lack of funding and operate as cost centers. When the curation of ecological assets and programs becomes integrated into brand strategy, everything changes. As corporations make more efforts to break down internal barriers, finding synergies between cost center and revenue generation, more aggressive investments in natural systems will become possible. Google's investments into renewable energy for their data centers are good examples of this. Renewable power sources may not be the cheapest form of power for Google, but they are benefiting from multiple layers of payback when supporting the growth of the renewable energy supply.

#7 Your customers will like you even more

If your programs reflect the core beliefs and values of the company, while supporting your raw material needs and offsetting your corporate footprint, they can create a win-win-win for the environment, your brand equity and your bottom line.

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