What: Coresight “ENCORE” approach to align profits and sustainability, which are seemingly antithetic to many

Why it is important:  Going sustainable is not doing retrofitting but redesigning the model at its core. It is costly and requires time, however this approach produces superior economic results since it embeds a true efficiency in its core.

For Coresight, there are 3 reasons why making environmental sustainability integral to a retailer’s business model is the most pressing topic now:

• Risks to businesses, society and the world come together in climate change, forcing companies to minimize their environmental impact,
• Consumers, employees and investors are prioritizing environmental sustainability and social issues when choosing what they buy, where they work and where they invest in,
• Investors are actively pricing in risk from emissions profiles, impacting valuation and market capitalization.
• However, it is often perceived as contrary to making profits. Coresight aims at reframing the common perception that enhancing sustainability is penalizing profitability by showing that doing well by doing good is possible, through a specific framework they developed, the EnCORE methodology:
• En stands for Environmental Awareness: internal and external audits enable companies to correctly evaluate their environmental footprint. For instance, Best Buy conducted a materiality assessment in 2021 to determine which issues are important to stakeholders based on a five-years outlook,
• C stands for Circular models: truly circular models are not retrofitted onto existing business models but are rather business models created at inception with circularity at their core. This is not the majority of the models yet today, as we are at the beginning of the digital transformation which would truly allow avoiding retrofitting and focusing on building the model of the future,
• O stands for Optimized operations: carbon reduction strategies are costly and take time to put into action, which is the reason why a holistic and integrated approach is for instance an example of how Amazon is tackling its environmental footprint, by addressing the last mile issue,
• R stands for Responsible supply chains: booming e-commerce means more packaging, which is a case for reusable packaging, provided the ROI implied by the number of reuses is positive,
• E stands for Excellence in reporting and communicating: a regular and transparent communication is key to help stakeholders measure up the progresses made.

Sustainable strategies should produce superior profitability as hey harness efficiencies and wring out excesses in supply chains. However, they also require the reset of many existing business and collaboration practices.

Can profits and sustainability align in the supply chain?