Understanding and Strategy
A resource effectiveness strategy is composed of five building blocks

Strategy

Based on the insight into the environmental impact, resource usage, and the opportunities & threats, the final step under ‘Positioning’ is to define the resource effectiveness strategy and the high-level objectives the company wants to aim for. A resource effectiveness strategy is composed of five building blocks.

Resource effectiveness strategy building blocksAmbition – The first building block is a clear vision and ambition level. Given the opportunities and threats, and the company’s current position versus the competition, does the company want to comply with regulations, or go beyond compliance and aim for leadership? Examples of high ambition levels include Marks & Spencer, who want to be the most sustainable major retailer in the world by 2015, and Unilever, whose objective is to double revenues by 2020, while keeping the total environmental impact constant at today’s level.

Priority – Depending on the ambition level, the magnitude of the devalue chain, and the competitive position, the company must decide how much management attention, investments and resources should be devoted to improvement of resource effectiveness.

Scope – Should the resource effectiveness efforts be applied to the entire company, to a business unit, or a product line? This depends largely on the nature of the product or service. Providers of services and bulk products will most likely need to focus on the entire company, while manufacturers of discrete products (esp. with a large sustainability impact in the use phase,  e.g. cars or white goods), can choose to focus on ‘green’ product lines targeted at specific customer segments.

Focus – What is the primary financial objective? Reduce cost, grow revenues, or maintain profits and mitigate resource related risks? This depends mainly on the resource and energy intensity of the company, and the importance of sustainability for customers.

Approach – Finally, how should the company achieve the objectives? By optimizing the efficiency of current operations, or by developing new products or even new business models? This depends on the sector and the specific circumstances of the company, innovation capabilities and quality of management.

As part of the strategy, the company must define high-level objectives for the medium to longer term, e.g. a certain reduction of the environmental footprint, a certain share of the product portfolio that must be ‘green’ by a given year, etc. The purpose of these high-level objectives is to establish the ambition level, both internally and externally, and to provide direction for the resource effectiveness activities. More detailed and short term goals are defined as part of step 5: Performance.