💫9 boring actions that help your journey to regenerative business practices

This is the monthly newsletter from Bemari where we talk about how to not get lost in sustainability. This month we want to remind that sustainability and regenerative practices start with basics and that sometimes in the sustainability race these boring practices may be forgotten and overlooked. 

Let’s start with reminding ourselves what regenerative business practices mean. They go beyond sustainability, beyond legal compliance and beyond just not doing harm. Regenerative business practices aim to actively restore and enhance natural and social systems and create net-positive impact. Business practices that are legal and commonly acceptable do not always support wellbeing, help people and planet thrive and create conditions for life - and we need more of those that do.

Living systems are interdependent, and so are the customer-supplier systems. In the customer-supplier dynamic, power imbalance and transactional approach often result not only in lost value and diminished longer term benefits, but in practices that do not align with the ideas of collaborative partnerships and living systems dynamics.

1. Put in place fair and clear contracts with your suppliers. Contracts are actually there to protect both parties and come in particularly handy when something goes wrong. In those instances it will be the organisations that have least resources or protection that will suffer. If there is no contract (and this happens surprisingly often), there is no recourse or mechanism for issue resolution - and suppliers may be left with stock they cannot shift, resource-draining disputes, unpaid invoices that may cause them financial difficulties or simply put them out of business.

   Bonus points if your contracts provide for fair, not simply “the most economically advantageous” terms. It is not enough to pay living wage (which is still not even a norm in many sectors), fair value share might include non-financial exchange (e.g. resources, knowledge, fair margin and profit allowances) to support your partners and allowing them to thrive.

2. Pay your suppliers on time. This might seem like a basic one but this happens so often across large and small businesses. Late payments or extended payment terms hinder suppliers’ ability to support their business and teams, especially if it is a small business.

   As a customer, you might see this is an “admin issue” or perhaps a way to maximise cashflow and financial position, however suppliers often may incur additional costs even just chasing the payments or having to bridge the period between paying their costs to deliver your goods or services and receiving the payment. This negatively affects wellbeing and ability of these suppliers to thrive.

3. Respect potential suppliers’ time. Part of procurement process often entails asking multiple suppliers for proposals, clarifications and various documentation. Sometimes suppliers are asked to provide detailed plans, fill in multiple forms, provide pages and pages of policies that often go unread, turn up to multiple supplier engagement and selection events and at the end - the opportunity is dropped, a supplier that has always been chosen is awarded again and the remaining bidders are not given feedback or even a response on the tender decision. In the worst case scenario, the ideas submitted as part of the proposal are used without the authors, and their proposal is simply used to fulfil the “3 quotes” requirement without an actual intent to contract.

   This dynamic is accepted as “normal course of business and competitive process” but wastes everyone’s time, leaves suppliers with fewer resources at disadvantage, increasing costs of the process for everyone whilst not necessarily improving tender outcomes. There is very little wellbeing improvement - simply an extractive “business as usual” practice.

    

4. Accellerate traceability of your supply chains. Most of the environmental and unknown social impacts often sit in supply chains. Traceability and transparency are not easy to achieve, however without these businesses cannot see where social foundations or ecological ceilings may be breached, and identify opportunities for positive contribution. Saying you have traced your Tier 3 supplier might not make for a very exciting statement in the impact report but without it, there may be not enough exciting sustainability statements later on.

5. Work with smaller innovative partners. They do not all need to be micro-enterprises, but if we want to have new solutions and change the way the system works, opportunities need to be shared beyond the “usual suspects”. There will be instances where large does mean better solution and lower risk, but this does not apply in all cases. 99% of businesses in the UK are micro-enterprises (less than 50 employees). By engaging smaller businesses, opportunities, knowledge and resources are distributed rather than concentrated in a limited pool.

   It also signals that being large is not necessarily the ideal - therefore supporting the idea that unlimited growth is not the most appropriate measure of success. Transformative ideas are unlocked with broader perspectives and new diverse thinking.

Regenerative journey has to start with transforming mechanisms that entrench extractive practices. The governance systems are a critical element of business design that deserve attention, even though they may often be perceived to be too “corporate”.

6. Act on the insights from the social and environmental audits and assessments. Sounds obvious, but often the insights and recommendations remain in Word documents, Excel sheets and PowerPoint slides. They seem small and unexciting, or sometimes challenging to implement but measurement or audit on their own do not generate any positive impact. Progressing with the smaller opportunities to create better conditions for people and planet sooner can create more impact than a very elaborate and ambitious plan much later on.

7. Monitor metrics of sustainability performance alongside financial KPIs. Not in a separate meeting or a dedicated report, but right next to the metrics that the business values the most. Regenerative business is the opposite of “profit at all costs” so including the cost of the profit helps focus the minds and reiterate the message - is 20% growth at the expense of 40% carbon footprint increase consistent with our stated “commitment to sustainability” and “positive impact” [insert the specific commitment or stated purpose here]?

    

8. Shift your money to funds and financial institutions that are aligned with your sustainability values. Money is what powers the industries and change. Climate finance flows have grown consistently over the past decade, but they still lag far behind what is needed to meet the goals of the Paris Agreement - according to research conducted by Climate Policy Initiative & AO Shearman, we are USD6 Trillion a year short of what needs to be deployed between now and 2030 to meet Paris Climate goals. Financial institutions and pension funds use the money to invest in various sectors - why not use your money to invest in addressing this gap?

9. Link financial incentives with sustainability performance in particular for those leaders in the business who have the most influence. They may be senior management, executives or functional leads - business structures work well when optimised for the delivery of specific targets. Measure what you say matters and the dial might just start to shift faster by rewarding social and environmental outcomes alongside the financial ones.

For your toolkit

• Make my money matter - guide to why it matters where you keep your personal and business money

• Climate contract clauses - what it says on the tin + guidelines for lawyers to align the contracts to Paris agreement

For your calendar

We are launching a series of workshops that help organisations explore the principles of Regenerative business and help with getting started on reimagining the business practices. If you would like to take part in the early cohort, please let us know at [email protected]

Meme of the month

Recap of Good News this month

💫 That’s it for this month. We hope it sparks a change for you and your organisation - we would love to hear what change it is. Let us know!

Is there an advice that has been very helpful to you and you think others would find helpful too? Please share by emailing [email protected].