SMAS ®
To help organisations begin to consider and demonstrate more sustainability across their operations, ARENA Network have developed the Sustainability Management and Audit Scheme (SMAS)®.
SMAS provides a transparent approach to identifying your most significant stakeholders across the economic, social and environmental aspects of your organisation and engaging with them to, among other benefits; improve the credibility and efficiency of your organisation.
SMAS is a tool to help identify and prioritise stakeholder groups for engagement and demonstrate a transparent approach to initiatives the organisation engages in to facilitate the ongoing success of the organisation in today’s market.
We talked to Alun Bowen, Senior Partner of KPMG in Cardiff and leader of KPMG’s Global Sustainability Services® about business, sustainable development and SMAS.
Alun, how do you view the issue of business and sustainability and which, say, three main aspects are key in defining business sustainability?
"Sustainable development, sustainability, corporate responsibility and stakeholder relationships are all matters which are higher than ever before on the agendas of businesses. However, one of the major issues is that each of these terms can mean quite different things to different people.
"The way that I look at it is that the corporate social responsibility 'movement', as far as business is concerned, has a number of similarities to total quality and customer care, which were fundamental business issues in the 1970’s and 1990’s but are now almost taken for granted, unless you are good at these things, you do not have much of a business.
"If total quality was about making sure that your product or service reliably and cost effectively did 'what it said on the tin' and customer care was about listening to customers and responding to their needs. Corporate responsibility is about 'doing the right thing' as far as your stakeholders are concerned – principally your customers and employees – it should follow that if these are 'happy' – the same should apply to shareholders. Hence the need to understand the relationships with all stakeholders.
"Corporate responsibility in my definition covers both environmental aspects and social aspects – although a lot of people use the term corporate responsibility and sustainability as referring only to environmental aspects – the human and social aspects in my view are just as important
"Having determined what in my opinion corporate responsibility is, we now move on to the 's' word. Sustainable development is something that applies to everyone, individuals, government and business. I see corporate responsibility as the contribution of business to sustainable development. Business sustainability is not a term I really understand as such, as it suggests the long term success of an individual business – which is not necessarily anything to do with corporate responsibility – but it is a term that I see increasingly used. "
But would you say that organisations are really embracing sustainability as a concept to influence their core business thinking, or is it just another marketing tool?
"Using the definition that I have discussed I can think of a number of businesses in South Wales that are strong on the environmental aspects and other businesses have done fantastic work in the employee/community/social aspects, they are now moving on and integrating their thinking.
"The major Environmental Fund Schemes launched earlier in the year by Tesco and M&S are to some extent a response to the views of their stakeholders and might be viewed as marketing initiatives but they will inevitably lead to change behaviour by business. At the end of the first decade of the 21st century there is little room for initiatives that are not 'real'. The transparency of most organisations is such that launching an initiative paying lip service will effectively be corporate suicide as the popular media – reflecting the views of customers - will give short shrift to high profile organisations that do not 'follow through' – with huge consequent reputational damage."
Businesses routinely strive to manage their operations efficiently and responsibly and many embedded and good practices would fall within the ‘umbrella’ of sustainability –in your view, what would these be?
"As we have been discussing to be a business that can use the ‘umbrella’ of sustainability you have to do the basics well, you have to:
- Have good governance – financial, compliance and adopt best practice in risk management
- Take account of stakeholder interests – customer demands & expectations; investors; etc etc
- Have employer of choice programmes – welfare, training & development and community support
"Otherwise everything will be built on sand…"
Alun, BS 8900 was published in May 2006 and you served for two years on the Technical Committee which produced this Standard – what do you hope that it will achieve?
"Let me say, firstly, that it is not a Standard as such – it is more of a guidance document which enables a business to establish a framework for the management of sustainability issues.
"One of its objectives is to simplify the whole process of understanding sustainability – showing how it can be developed operationally within organisations."
Previously, BS 5750 and BS 7750 have given way to ISO Standards, do you think that BS 8900 will, in due course, follow suit (I’m thinking of the proposed ISO 26000)?
"I think, for the reasons the thinking behind the proposed ISO 26000 is fundamentally flawed. BSI is endeavouring to influence the style of ISO 26000 by suggesting that some of the BS 8900 approach is adopted. I think that ISO will inevitably adopt this approach as they are treading a similar path to that adopted by BS 8900. The issue of corporate responsibility is so much about attitude and culture that it is difficult to see a 'management system' approach working. I would be very sceptical about such an approach. Given the complexity of the ISO world – if it persists in trying to make it a standard - it will be years before it is issued."
Alun, you are familiar with the Sustainability Management & Audit Scheme (SMAS) being developed by ARENA Network and trialled with a number of leading businesses in Wales – what are your thoughts on this initiative?
"I like the stepped approach of SMAS – this approach is finding wider acceptance especially in environmental management systems.
"As a stepped approach to sustainability implementation and reporting, SMAS provides credibility to organisations processes through transparency at an early level, moving forward to determining the most appropriate issues to report on at the penultimate stage. Stakeholder identification and prioritisation through a risk assessment process facilitates the ‘materiality’ of reporting as well as identifying the key areas where organisations should be engaging to facilitate successful business development, and ongoing operations. This methodology can be equally applied to a large corporation as an SME; that make up over 95% of organisations in Wales.
"ARENA is in an excellent position to build upon its experience in developing and implementing a phased approach to environmental management which can be utilised as a risk management tool by any size organisation, and facilitating a natural progression for proactive organisations to consider and demonstrate their commitment to wider sustainability issues.
"It’s far more pragmatic and based in the real world than the BSI and ISO initiatives."
Would you agree that businesses in Wales have a particular opportunity to develop their business & sustainability credentials?
"Wales is one of only three legislatures in the world with sustainable development written into statute – with the growing worldwide pressures (and opportunities) on business to demonstrate sustainability best practice, I can see an excellent opportunity for Welsh based companies to develop and lead on this issue. Indeed, ARENA’s SMAS tool should provide invaluable assistance in developing this opportunity for organisations in Wales.
"Furthermore, I understand that there are almost 1,000 registrations to the Green Dragon Environmental Standard and without doubt this is a substantial contribution to the business and sustainable development agenda in Wales – the challenge is to encourage companies to take the 'next step' on broader sustainability issues. This I think from ARENA’s point of view will involve closer working with those organisations like Business in the Community Wales that are strong on the CSR agenda. There is an irony that ARENA is probably Business in the Community’s most successful spin-off!"
What is your view on the current position of sustainability and business in the rest of the UK?
"UK business has a clear leadership position on these issues. This is recognised by business in every country I go. Wales is probably the region in the UK that is most actively engaged in these issues and undoubtedly also has a leadership position within the UK – although we should not be complacent."
Alun, finally, you lead KPMG’s Global Sustainability Services® practice; how do you see the business and sustainability world in, say, five to ten years?
"These issues are the issues of our age – I believe that we are almost past the 'tipping point' for business – unless you are now good at 'doing the right thing' – this will increasingly become a competitive disadvantage for individual businesses. The transparency of our age will also ensure that you trying to do it 'on the cheap' by not building these issues into your ethos, culture and core business processes, will mean loss of reputation which is the biggest 'killer' of modern business."