Businesses should Keep Tabs on Bottom Lines & SDGs

As I have often written in this blog, sustainability and business and profitability go hand in hand. If you’ve been following my articles, you’ve read my often repeated reference to an outstanding windfall that’s in store for businesses and industries when they become sustainable.

Businesses that incorporate some or all of the 17 Sustainable Development Goals (SDGs) developed by the UN into their business and marketing plans and become active in building sustainable industries will reap the benefit of greater revenue. The World Business Council for Sustainable Development anticipates that the sustainability windfall could be as high as $12 trillion a year and create as much as 380 million jobs in the course of the next decade. A slice of that would surely satisfy any business owner.

Sustainability, environmental protection and climate change are expected to remain on business agendas forever and affect established companies, startups, investors, funders and Wall Street. Not only should business owners mind their bottom lines but also the SDGs.

United Nations Call

In response to rapid global social-ecological changes — climate change, resource scarcity, social exclusion, change of customers’ demands, coronavirus — and the United Nations’ call for actions to attain the SDGs, many large and small businesses from a wide range of industries have risen to the challenges and taken actions to contribute to sustainable development.

To be sure, covid-19 has clearly taught us that we – humankind – are more connected than we have realized. We can transmit deadly viruses from one person to the next, from one town and state to the next, and from one country to the next. We can also convey around the world the positive effects of sustainability and detrimental influences of environmental pollution.

However, global sustainability challenges cannot be resolved with the effort of a single individual, business or sector. Just like covid-19 cannot be eradicated by one scientist or government. In addition to governments, social institutions and local communities, business leaders are stepping up and making contribution towards this important agenda.

According to Paul Polman, former CEO of Unilever and a passionate global spokesman for sustainability, “Business can, in fact, be a tremendous force for good and make a huge contribution to solving the biggest problems facing our people and planet. Actually, this is the only way for business to be accepted in society and it should always strive to have a net positive impact.”

Indeed, with consumers’ comprehensive buying power skyrocketing in all segments, businesses that accept their beneficial roles in sustainability, environmental protection and climate change will reap the benefits of their buyers’ purchases. Those that don’t, could soon find their destinies on the ash heap of history.

Ethical Conduct is Precondition

In an interview with Mongabay.com, Polman continued: “You simply cannot expect to build a business with longevity and resilience if you don’t embed ethical conduct in all you do. This is now a precondition for any successful company and if you do not move to a more responsible, sustainable and equitable way of doing business, then you don’t deserve to have any business at all.”

For sustainability in all of its 17 formulations to be achievable, its advocates must strive to fulfill two simple but necessary steps. Polman said he has observed that corporate leadership in this field can change the mindset of other companies. “Especially, in demonstrating the power of partnerships to drive system-level change, whether that’s taking bold climate action; transitioning to the circular economy; supporting ‘nature-based solutions’; or accelerating food systems’ transformation,” he said.

Furthermore, it is important for a company whose ownership and management are committed to the SDGs to demonstrate their dedication to all of the employees. In other words, buy-in is key to success. “I’m equally proud of the culture we helped to incubate, which was ultimately about helping people succeed. Something that would not have been possible without the enormous commitment and passion of many. A CEO’s responsibility is really about inspiring and uniting people behind a common purpose and then helping them to find their own clear sense of direction. Releasing energy in others.”

As an obvious, contemporary example of the potential of success of a concerted partnership, Polman cited the attempts to tackle coronavirus. “I think on balance the business community deserves huge credit for its response to the pandemic, as there are many examples of constructive collaboration across the private sector aimed at protecting lives and livelihoods. Whether that’s consumer goods manufacturers producing hand sanitizers, the fashion industry making masks, or the engineering sector building ventilators,” he said.

Employees of small and medium businesses (SMBs) feel strongly about their employers’ sustainability practices, revealed Salesforce Research. Three-quarters of the respondents from companies with 250 or less employees say corporate sustainability is a moral imperative. However, Salesforce Research found, SMBs are far less likely than larger companies to have an actual sustainability program or strategy. While 69% of respondents at companies with over 1,000 employees said their company had a sustainability program or plan, only 37% at companies with 250 or less employees said the same.

Sustainability Steps aren’t Complicated

Designing a sustainability or climate change plan for a business is not that difficult. You’ve undertaken a similar exercise when you created your business plan. Knowledge is the first requirement. Conviction and passion the next two. Business owners, management and employees can contribute to the success of the program. Designate a sustainability leader, the employee or two who will constitute the cheering team. Find an executive sponsor and measure everything that you do. Create a vision, set your goals, strategize and then take action. Stay committed. Soon you’ll see that what you do in sustainability contributes to your bottom line and the success of your bottom line will reinforce your environmental efforts.

Share your vision, plan and successes with your trading partners and get them involved. Inform your customers who will be eager to know what you’re doing. Tell your elected officials and news media. Organize events.

While the numerous benefits of jumping on the sustainability bandwagon should be sufficient to convince businesses to do so, the downside of not doing so also has its persuasive powers. The World Economic Forum estimates that “even if we meet all the climate commitments of the Paris Agreement, temperatures can be expected to rise this century to 3.2C above pre-industrial levels, far above the 1.5C threshold to avoid the most severe climate impacts. While this may not seem like much, it can contribute to the manifestation of immense catastrophes, such as the ongoing wildfire crisis in Australia spurred by heatwaves and flash floods in Indonesia. We would be wise to prepare for this – and business is no exception.”

Climate change presents complex and interconnected risks to businesses, their suppliers, and to the employees and communities along their supply chains. Mitigation efforts—those focused on reducing greenhouse gas emissions—are vital to any company’s climate strategy and critical to global efforts to avoid unmanageable climate impacts. As the impacts of climate change are increasingly felt around the world, however, it has become clear that simultaneous efforts are necessary to increase adaptive capacity and build resilience.

Temperature Changes Cause Global Calamities

Calamities created by even slight climate changes and temperature fluctuations can considerably damage global and local commerce. The first step to better managing the growing climate risks that businesses face is understanding them. The potential economic costs of inaction are staggering. Damage done by climate-related disasters and extreme weather in 2018 alone cost the US around $160 billion, and the numbers are only expected to increase as hazards become more complex and unpredictable.

Businesses are also bracing themselves for direct impact to their bottom lines. In 2018, 215 of the world’s 500 biggest corporations, including giants like Apple, JPMorgan, Chase, Nestle and The 3M Company, reported climate-related financial risks of just under $1 trillion.

Then with around 80% of global trade embedded in supply chains, business leaders are increasingly aware of risks that could affect their ability to move through the world, including issues of cost, speed and responsiveness. In fact, CDP data reveals that 76% of suppliers have identified ways in which climate change could increase the risk of disruptions to their business.

In an article by Anthony Britterri, editor-in-chief of New Jersey Business Magazine, Catherine McCabe, commissioner of the New Jersey Department of Environmental Protection (DEP), reinforced the belief that good environmental policy and good business go hand in hand. “We all share a common goal in building a strong resilient New Jersey for the future, both economically and environmentally. The best way to ensure that is to maintain strong, open dialogues,” McCabe said at a virtual town hall meeting sponsored by the New Jersey Business & Industry Association and the New Jersey Chamber of Commerce.

McCabe admitted that the DEP’s greatest priority right now is climate change, which she called the “No.1 threat to New Jersey’s long-term future. We need to build our resiliency to ensure the state remains not only safe for its citizens, but also a hub for businesses,” she said.

McCabe discussed the state’s first Scientific Report on Climate Change, which she said serves as the foundation for policy decisions going forward. “Raising awareness (of climate change) is perhaps the most important thing we can do. Issuing the report is good for all academicians, policy people and business people,” McCabe pointed out. The most important message from the report is that climate change is already here as seen by higher temperatures, more severe storms and an increase in coastal and inland flooding,” McCabe said.

New Jersey businesses and residents should sit up and listen when they hear flooding. After all, the Garden State enjoys a 130-plus mile coast.

Every journey begins with the first step and that also includes a sustainable journey. After you’ve committed to following this course, even a few of the points, you should contact the New Jersey Sustainable Business Registry and inquire about meeting its criteria for joining the list of sustainable small businesses. Contact NJSBinfo@NJSBDC.com. An experienced sustainability consultant will be happy to speak with you in person, on-line, or by phone. You can also find out more about these programs by visiting the Sustainability Consulting page on NJSBDC’s website (http://www.njsbdc.com/sustainability-consulting/).

Helping Restaurants and Foodservice

Restaurants and foodservice make up a significant portion of any community’s economy. They’re not only places where families can enjoy solid meals any time of day but they’re also places for personal and social networking, entertainment and relaxation. And last but not least, they’re places of employment and personal development. Just imagine how many CEOs of any industry began as burger flippers, wait staffers, busboys or dishwashers.

Restaurants – the epitome of small businesses – are a vital American economic mainstay.

There are more than 19,000 restaurants in the Garden State, with 348,000-plus jobs and $18.1 billion in sales. It’s not as glamorous as the media pretends. It’s a tough job with long hours that requires dedication to excellence, safety and consumer satisfaction. It’s been said that if you want to make a little money in the restaurant business, invest a lot of money in it. No kidding.

Restaurants in the state and around the country are suffering right now because of covid-19 and many of them are closing their doors temporarily – as the famous Grand Central Oyster Bar – or forever – as the Friendly’s chain announced on Monday. Indeed, 39 popular New Jersey restaurants have closed forever while IHOP announced it will soon close 100 locations due to coronavirus. While foodservice depends on the man, woman and family on the street for business, the industry also has stepped up to the plate to help itself with a variety of in-store promotions meant to attract patrons.

The industry has also taken its case to Capitol Hill.

The International Foodservice Distributors Association, the trade organization of wholesale companies coast-to-coast that deliver food and non-food products and offer consultative services to foodservice operators, has appealed to Congress to help the industry as it deals with covid-19 while struggling to keep its doors open.

The association thanked Chairwoman Nydia Velazquez (D-NY), Ranking Member Steve Chabot (R-OH) and the House Committee on Small Business for holding a hearing on the impact of covid-19 on small businesses in the food industry.

According to IFDA, the foodservice industry has been particularly hard hit due to government closures and occupancy restrictions and urgently needs congressional action to provide economic relief. “The foodservice distribution industry was pleased with many of the provisions included in the recent House proposal. In particular, the provision for a second round of Paycheck Protection Program loans and the inclusion of payments for inventory, raw materials or supplies as allowable and forgivable expenses. In addition, the bill would establish a $120 billion grant program for restaurants, bars and food trucks. While this is a great first step, IFDA urges that eligibility be expanded to cover independently owned franchise restaurants as well as small regional chains,” its statement read.

Mark S. Allen, president and CEO of IFDA, offered the following observation ahead of the congressional committee hearing:
“As these witnesses attest, this crisis has been devastating to the foodservice industry. Congress must help small businesses that are the backbone of our country and food supply chain. We support these companies and ask Congress and the Administration to continue in their negotiations on another covid-19 relief bill. In particular, we are happy to see the recent House bill includes PPP and direct aid to restaurants who have been among the hardest hit industries. Unfortunately, the House proposal denies federal support for small regional chain restaurants, as well as individual owners of small franchise restaurants. Even more restaurants and jobs will be saved if the House adopts the Senate version of the RESTAURANTS Act. Led by Sens. Roger Wicker (R-MS) and Kyrsten Sinema (D-AZ), it takes a balanced approach to providing federal support to all restaurants that are suffering. IFDA implores Congress to support our nation’s restaurants and their partners, like foodservice distributors, who deliver the food and supplies to keep professional kitchens cooking.”

It would be beneficial if foodservice operators and restaurateurs – and patrons – contact their elected officials regarding this great need.
IFDA warned its members’ customers that due to the pandemic the outlook is bleak:

• Leading indicators suggest US Industrial Production business cycle decline will extend into early 2021. • However, COVID-19 case spikes and renewed shutdowns could extend that outlook further.

• Business owners should ask themselves: what can I do now to be ready for recovery next year?

• Foodservice sales annual growth rate is down -9.2% in June, and expected to be down -19.3% for 2020, placing the industry in a recession phase.

• Grocery store sales are seeing accelerating growth, expecting to grow 12.7% this year

The National Restaurant Association also took their members’ case to officialdom by joining with members from the U.S. Conference of Mayors to talk about finding ways to help restaurants stay in business as covid-19 continues to ravage the small business landscape.

As the pandemic does an about face with another surge this fall, restaurant owners and operators have to be well versed in the latest safety requirements and advice in order to assure their clients that the environment in which they offer food and the food itself is safe as well as to nutritious. Restaurateurs have to be clever and nimble to remain in business.

“It’s been an incredibly hard time, no one’s seen this challenge before,” the association’s Mike Whatley observed in news media. “You are seeing a lot of creativity amongst operators.”

For example, a restaurant in Queens, NY, solved two problems for the busy professional – where to work and where to eat. The operator offered business people the opportunity to use its Queensboro restaurant on Northern Boulevard in Jackson Heights to satisfy both needs. For an extra fee in addition to food, the patrons were given a venue with WiFi where they could work and a meal. Reservations required and social distancing enforced.

Another idea along these lines, though slightly more daring, would be to promote your restaurant as a meeting venue or classroom for adults. By assigning specific hours and designating a safe, functional environment, the operator can be assured of at least some regular even repeat business now that the restaurants that have survived have been allowed to open.

In Miami, one restaurant found salvation in alternating its menu selections quicker than feasible. Picture Laotian, then Italian, then French, then whoever rents the kitchen. French-Persian restaurant Fooq’s rents its kitchen to chefs and operators to keep the premises open and apparently it’s worked.

In the City of Brotherly Love, restaurateurs pooled their creativity and perhaps desperation by joining forces to launch “Save Philly Restaurants,” a collaboration that called on local officials to implement industry-friendly initiatives such as street closures to accommodate outdoor dining. One result of that effort was the loosening of restrictions on alcohol sales, which allowed one operator to sell cocktails-to-go – a hit with local customers. Restaurants also rapidly built up their online infrastructure to take delivery orders, which were nonexistent before the pandemic.

With homeschooling and homeworking on the rise, you’d think that coffee consumption has changed. It did but not down. Americans are drinking just as much coffee during the pandemic, as often as before, but at home instead of in coffee shops and restaurants. Online purchases have jumped by 57% as coffee buyers cut back on trips to the supermarket, according to the survey commissioned by the National Coffee Association (NCA). Consumer habits for the period in August 26 to September 3 were similar to those in a January poll, with six in 10 people drinking coffee every day, at an average of 2.9 cups per day. “App-based ordering, including delivery, rocketed up 63% amongst those who drank coffee in the last week. Drive through ordering increased 13% amongst those who drank coffee each day,” the NCA reported.

Consequently, restaurants should note that app-based ordering with delivery may also reap the benefits of this dynamic technology. Actually, technology is a major contributor to a foodservice operations’ survival.

As an added attention grabber, operators should continue promoting popular consumer-driven buzzwords such as organic, healthy and sustainable and add visible notices and requirements about masks, social distancing and safety. Savvy owners should publicize their cleaning and disinfecting strategy thereby reassuring customers that their safety in the restaurant is paramount.

The National Restaurant Association recently published a covid-19 brochure titled Safe Operating Guidance that can be downloaded for free: https://restaurant.org/articles/news/download-latest-covid-19-safe-operating-guidance.

On the down side, as operators are well aware, even though they’re allowed to open their doors, their biggest challenge is that their businesses are designed to run at their fullest capacity. Permission to open with 50% capacity limits, 25% limits doesn’t work. It won’t matter how much takeout or outdoor seating they do; they’re still losing money. The question is how much business can you do to get by?

With federal, state and local funds available, some mayors recommend that every effort should be made to streamline the application process for any grants that are offered to already stressed-out restaurateurs. The sooner they get funding, the sooner they’ll return to business and pump money into the economy.

In New Jersey, useful information and consultation can be acquired for free from the New Jersey Small Business Development Centers (https://njsbdc.com/). Additionally, operators can visit this site for information: https://faq.business.nj.gov/en/articles/4299457-what-is-the-njeda-e-commerce-technical-assistance-program-and-is-my-business-eligible. There operators can find information about the federal Paycheck Protection Program that has helped many of them bring back many workers.

On a similar note that restaurateurs should be aware of, the Food and Agriculture Organization of the United Nations (FAO) is planning to develop a new food safety strategy in reply to coronavirus, sustainability and other concerns. In a rationale for the strategy, it was noted how changes in food systems require a need to rethink the place of food safety in sustainable development: “The relevance of food safety to society, economic development, and sustainable food systems need to be better understood and promoted. A new food safety strategy should further address One Health issues, such as antimicrobial resistance, emerging zoonotic diseases, climate change, agricultural intensification, new technologies, innovation, food fraud, digitalization of food systems, and circular economies. The covid-19 pandemic also demonstrates the increased relevance of food safety in emergency food assistance and humanitarian food aid.”

Experts, scientists and doctors are foreseeing the pandemic chaining America and the world for many more months. Consequently, be prepared for some communities and states to mandate longer or shorter painful lockdowns.

In today’s business climate, book and school knowledge is helpful as at all times. However, contemporary successful business owners and entrepreneurs must also develop a high degree of creativity, flexibility, courage and speed. Foodservice operators must transform themselves into chameleons by adopting and adapting quickly to new situations and trends in order to survive and thrive.

Operators should consider their capacity needs for 2021 based not only on what the consultants are forecasting but also on what they’re seeing on their streets. Take advantage of low interest rates to invest in the equipment and technology necessary to accommodate future growth.

Restaurateurs should utilize any downtime afforded by lower economic activity to train and prepare themselves and their kitchen and front-of-the-house staffs for upcoming trends as well as implement technological improvements to ensure they are competitive on quality and price.

The restaurant business is about people not only food. Patrons are neighbors who return for good food, ambiance, talk and networking. Like the lyrics to “Cheers”: Sometimes you wanna go; Where everybody knows your name; And they’re always glad you came; You wanna be where you can see; Our troubles are all the same; You wanna be where everybody knows your name.

For example, Rudy’s on Anderson Avenue in Cliffside Park, NJ, is regularly packed with locals in the middle of the day. Owner Tommy Sudano knows how to keep his patrons well fed and happy. There are countless Rudy’s across the state and country. Loyalty and patronage are as a valuable as cash and must be rewarded.

Engaging with loyal customers amid the pandemic is great way owners can drive business and remain viable. Build an archive of emails and phone numbers from takeout and delivery orders to reconnect with patrons and keep them updated on restaurant specials and promotions to help drive more business. Most importantly, communicate regularly with them on the safety precautions the restaurant is taking to keep diners safe. This will ultimately increase patron confidence in dining-in or ordering takeout, helping to boost repeat customers and sales.

Promote your restaurant, safety requisites and concern for patrons and they’ll be back.