Sustainability Makes Good Business Sense – Examples from Thailand
Businesses that operate internationally, if they are to be successful, must adapt to the cultures within which they operate. I have learned the importance of this truism by working in the food and agro- products sector for nearly 20 years on five continents. Failure to adjust can be life- threatening.
Naturally, no business would opt for certain death. At the same time, not every business can devise agile market solutions as quickly as the challenges arise. But companies that understand the sustainability paradigm are better prepared than most to do so. This is because a sustainability perspective has a built in longrange view of business. It offers discipline to what otherwise could be a catch- ascatch- can approach to planning, especially when sustainability is tied in with the United Nation’s sustainable development goals ( SDGS).
Once an organization has made the commitment to operate sustainably, a careful study of goals can suggest future proofing choices for long- term profitability through product design, through partnering, and through strategic philanthropy. Your commitment will lead you to identify and engage your stakeholders around the concerns they find most important – what we call “material issues.”
The good news is that this is not rocket science, but it does require a strategic approach, dedication, and patience. More good news is that it is affordable to a business of any size which is willing to take the time to think through its strategy and market positioning.
What follows are a few inspirational examples from the Thai context to inspire innovation and to showcase the variety of options available. All were on display at last month’s Sustainability and CSR Fair organized by several foreign chambers of commerce in Thailand and held at the Ananda Campus at the FYI Center. The experiences of the featured businesses illustrate that any industry and any size of business has the potential to shape sustainability strategy and based upon that, to design a range of projects to increase profitability while tending to the needs of the planet and of society.
Above all, foreign chambers such as AMCHAM play a key role in encouraging and documenting the sustainability journeys of their members by sharing these and other instances of how responsible businesses impact their host countries financially, environmentally, and socially. Most important is the lesson that sustainability and profitability are not at odds, but in fact go hand- in- hand.
PROFITABILITY AND SUSTAINABILITY BY DESIGN
A few companies have demonstrated that the sustainability outlook is part of their DNA. It is built into their innovative products or services. One example is Aloe Drink for Life whose aloe drinks are notable for their freshness, which has resulted in a premium product serving the high end of the market. This has been made
Once an organization has made the commitment to operate sustainably, a careful study of goals can suggest future proofing choices for long‐ term profitability through product design, through partnering, and through strategic philanthropy.
possible through the commitment of their farmer suppliers who are at the core of their business model.
Using a cooperative structure to engage these farmers, together with a short and fast supply chain, the venture has resulted in above- average financial returns. This outcome came about organically through the cooperative contributions of farmers on the one hand and the company on the other.
Aloe Drink for Life contributes management expertise and product marketing skills, plus access to international distribution channels. For the farmers’ part, they grow a product to the required world standard. The enterprise profitability ensures the long- term health of the farming communities and the environment. With consistent attention to quality, improved farming practices have led to the introduction of “Bio,” a new and popular organic product line.
Another inspiring example of a sustainability- inspired business is Wheig, a company devoted exclusively to converting waste to energy. With locations around the world, their signature project in Thailand is centered around Mega Mall Bangna Shopping Center, the largest in Asia.
Capitalizing on technologies developed elsewhere, Wheig is able to convert mixed waste from the 35,000- square- meter shopping center into biogas to generate electricity, and into compost and lesser by products.
Beyond the positive contribution to the environment, the uniqueness, adaptability, and transferability of the system are key. Also notable is the co- design component derived from the combined interests of the major retail stores which were seeking waste disposal solutions that did not negatively impact the environment.
SUSTAINABILITY BY PARTNERING
In addition to the innovation shown in the design- driven venture above, a sustainability minded program can be developed around business partners who have shared environmental and community development goals with similar targets and key performance indicators ( KPIS).
Collaboration is often a great way to get started with sustainability while focusing on return on investment.
To illustrate this, here are two meaningful partnerships where international businesses identified local needs which local partners have helped build on to create market differentiation.
The first example is the Conrad Bangkok Hotel, from the high- end hospitality industry, showcasing their efforts and contribution to environmental and planetary improvement.
Conrad Bangkok has partnered with a food company, Asia Artisan, which produces rice crackers based on traditional recipes and produced in local communities. Naturally, the crackers meet all food safety standards while offering an authentic local taste. The Conrad presents these snacks it its rooms in place of the traditional “apple and banana” fruit plate, which too often ends up as food waste.
Along with the crackers is an explanatory note describing the rice cracker tradition and its contribution to the community’s earnings.
In the second example, Bangkok advisory Lightblue Environmental Consulting collaborates with private companies to work towards solutions to the food waste issue. Lightblue offers technical expertise and implementation guidance at the hotel operations level through a voluntary system known as the PLEDGE ™ , a regimen that can result in as much as a 20% to 25% decrease in food waste.
One PLEDGE ™ subscriber, the Sampran Riverside Hotel, is an eco- tourist destination with a commitment to sustainability that is situated an hour from Bangkok on the idyllic Tachine River. The hotel’s F& B department sources its produce from neighboring organic farmers and manages waste in accordance with its PLEDGE ™ commitment. This not only minimizes waste but also cuts costs while serving as a role model for guests and employees alike regarding the handling of food.
SUSTAINABILITY BY PHILANTHROPY
One final case showing how sustainability thinking can delivery practical business benefits is in the area of strategic philanthropy.
The Airasia Foundation is the philanthropic arm of the airline that supports social enterprise by offering seed funding and business mentoring to qualified start- ups. One beneficiary has been the Muser Coffee Hill project, a support program run in partnership with the Thai social enterprise incubator, Change Fusion. The goal is to increase Muser Coffee Hill’s production capacity and expand its distribution channels.
Coffee planting in Doi ( Mountain) Muser was initiated over 40 years ago as part of a Thai Royal initiative to eradicate opium cultivation from the highlands along the Myanmar border. The plan involved switching farmers from opium to corn cultivation. But we now know that mono- cropping is harmful, with numerous side effects including soil erosion and deterioration, biodiversity loss, and nutrients leaching negatively impacting the ecosystem.
The effect of the shift to corn cultivation on farmer livelihoods proved severe. Farmers became vulnerable to crop failures, price fluctuations, over- reliance on middlemen, and over- dependence on chemical fertilizers and pesticides. The resultant loss of forest cover and biodiversity inadvertently degraded hill tribe cultures, values, and well- being.
Consequently, the Muser community sought an alternative to corn farming, and some among them began cultivating shade- grown coffee. Those who did so recorded greater income stability over time. They also faced less pressure to re- locate from Doi Muser lands designated as part of the Taksinmaharat National Park, because keeping the coffee- growers in place was an aid to forest rehabilitation: farmers replanted native trees to create the canopy needed to cultivate shade- grown crops.
To encourage still more farmers to switch, Muser Coffee Hill began purchasing beans at fair trade prices from area farmers. The company’s further expansion is limited only by the capacity of its coffee roaster and its access to capital to buy larger quantities of fresh beans.
To help improve sales and reach new buyers, Airasia connected Muser Coffee Hill with marketing and communications specialists to develop a new brand identity that better positioned shade- grown coffee in the market. With a logo re- fit, new packaging, and professional communications materials, Muser Coffee Hill products have become well known.
This brand identity highlights the Muser hill tribe heritage, the social enterprise’s social and environmental mission, and the quality of its shade- grown coffee beans. Since January 2016, Muser Coffee Hill’s new drip coffee has been available on Thai Airasia flights. Muser Coffee Hill products are also distributed by the Bangkok- based organic and fair trade social enterprise, Nokhook Group.
The Airasia Foundation case shows how strategic philanthropy can play a crucial incubation role given a market- oriented solution as a long- term value- added driver. It demonstrates how globalized economy drivers are relevant to the local business eco- system, with the ability to build positive change for profitability.
All examples cited above can provide inspiration for the creativity needed to think, design, and build sustainability options with the right partners. And, as underlined before, these cases show how foreign businesses can add value to the local ecosystem, creating positive impact by recognizing the importance of cultures, values, and potential synergies to create sustainable profits.
Emmanuelle Bourgois is Founder and Director of Fairagora Asia. She can be contacted at email@example.com.
The organizers of the Sustainability and CSR Fair with the author ( third from left)
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