Changing the tone of efficient practice with sustainability reporting

To improve the profitability and sustainability of business operations, organisations in all industries must embrace performance measurements that go beyond the financial. Investors and markets increasingly recognise that non-financial factors - particularly those relating to sustainability and socially responsible operation - are not only good for our communities but are also good for business - providing a more accurate and holistic ‘lead’ indicator of future performance than historic financial outcomes. Businesses themselves can realise significant bottom-line achievements through the visibility and scope gained from non-financial indicators, which often reveal inefficiencies and flawed processes that a financial-only approach to performance measurement may not uncover.

A traditional approach to measuring organisational performance typically relies on financial results; these results, by definition, are an indicator of past performance - and provide limited insights into how that organisation may perform in future market conditions. Non-financial indicators, however, codify the efforts which the organisation is taking to prepare for that very future. Year-on-year measurements of sustainability indicate the efforts an enterprise is taking to generate efficiency dividends and insulate its production from variable environmental factors. Such measurements take into account the true costs of ‘externalities’ such as waste and greenhouse gas emissions - which not only impact investors and the broader economy, but also the day-to-day running of the enterprises themselves.

Case study: Setting a greener tone

When it comes to boosting organisational efficiency, seemingly small things often make the biggest difference. For document services providers, print toner turns out to be one such source of inefficiency. Fuji Xerox Australia includes toner cartridges as a standard part of machine support and a free, in-house service to collect used consumables from customers, delivering them to our Eco Manufacturing Centre or recycling partner. This close-the-loop service helps reduce both our customers’ and our own environmental footprint. Year-on-year performance is reported in our Sustainability Report to provide customers, investors and the broader market with visibility and confidence in our approach.

We have found a significant amount of residual toner in returned, used cartridges. Our investigations indicate that a major cause is a ‘pre-emptive’ approach which businesses take to cartridge replacement, in order to reduce the risk of a shortage at a critical time or just out of convenience. Such practices add to our costs and efforts to remain competitive. In addition to this, toner is a relatively carbon-intensive product, meaning this wastage has a discernible negative impact on our company and the carbon footprint of our customers.

Using non-financial indicators can help businesses identify seemingly insignificant areas where substantial efficiency dividends and competitive advantage can be gained. In this case, year-on-year benchmarking of enterprise carbon dioxide emissions helped reveal the inefficient practices in replacing toner. Fuji Xerox Australia, through its annual life cycle analysis of customer support functions conducted with the University of Sydney, found that toner production has the highest carbon cost per dollar out of all our support activities. If we want to continue achieving the quantifiable improvements set out in our Sustainability Report - which recognises that carbon reductions are typically reflected in process efficiencies and bottom-line improvements - then toner becomes an obvious priority for realising both non-financial and financial imperatives for ourselves and our customers.

Non-financial indicators such as carbon emissions tracking help to identify otherwise-invisible sources of inefficiency; businesses must then take the necessary transformative steps to rectify the issues which these indicators raise. In the case of toner replacement, we are working to educate our customers further on why replacing cartridges only when low can result in significant business performance improvements, as well as sharing best practices around consumables management to ensure that cartridges do not unnecessarily deteriorate or take up storage space. We are also working with our staff and recycling partners to monitor toner wastage and adjust device settings to further improve efficiency across our customer base. Through the broader use of remote monitoring of toner levels, comprehensive measurement of residual toner, changes to work processes and improving customer awareness, we are looking for a substantial financial and environmental payback as a result of the focus on residual toner.

These efforts do not represent corporate social responsibility for its own sake: they come as part of recognising that unsustainable practices have both short- and long-term costs for both enterprises and the economies in which they operate. Implementing rigorous organisation-wide measurement of non-financial indicators can pinpoint areas for improvement, such as toner and cartridge use, which can have immediate effects on the efficiency and competitive advantage of enterprises. By tackling these issues now, we can also ensure greater business resilience to environmental and market changes alike - and, hopefully, minimise the magnitude and impact of those changes to the future stewards of our businesses and communities.