We had been addressing a lot of matters that are now recognized as sustainability issues for any years, but we wanted to formalize it. If you link your sustainability and corporate strategies, put resources behind it and report on it monthly you end up with a program that leads to a safe business, safe people and a safe planet.

Thomas Martin,
Non-Executive Chairman

martin arco

Arco has been awarded a gold medal for sustainability after an assessment by EcoVadis, the world’s largest and most trusted provider of business sustainability ratings.

Thomas Martin, Arco’s Non-Executive Chairman, describes how conducting business responsibly has always been part of what the company represents and how it operates. However, the company recently took steps to formalize its approach to sustainability by creating a sub-committee of the board that’s charged with reviewing the company’s current sustainability journey; what it could become; and how to close the gap to get the company to where it wants to be.

He says that “We like to think of ourselves as a significant player in helping to shape the market in terms of any safety products and services and we’ll supply the training to make sure you go to work safely. Our philosophy on safety is that if you’re responsible, you can pretty much do anything if you do it the right way, with the right tools and the right expertise. It’s all about enabling that to happen.”

Arco’s experience has shown that because family businesses are generally aligned as owners, partners and leaders of the business, it makes it possible to have conversations quickly and act on important sustainability issues.

A step forward on the sustainability journey: Formalizing the strategy

“Over the last 20 years,” says Thomas, “we have been addressing a lot of matters that are now recognized as sustainability issues, but we wanted to formalize everything that we had been doing. That included the responsible actions we’ve taken regarding our supply chain management and our lobbying efforts with governments on responsible supply chains. To

take a more strategic approach, we asked one of our non-executive directors to set up a board committee to make sure that whatever we came up with wasn’t a bolt-on or a tick box activity or greenwashing, but something that would actually come alive.”

In Arco’s case, that required an investment of time and money in determining the permanent full-time executive resources that would be needed to integrate sustainability throughout the company’s operations.

Learning and knowledge-sharing was an integral part of this stage of the journey, with the company’s nonexecutive director and the general counsel enrolling in an intensive course with delegates from all over the world who were at various stages in their sustainability journeys. Subsequently, their challenge was to join up everything that was being done across the business from a sustainability perspective, and to deliver a clear message to the business that these actions were not a proprietorial whim.

Thomas notes that “The outcome of this challenge provided us with a very rich resource, which we hadn’t really understood. After going through the exercise, we realized that we already had 584 sustainable products out of a total of 20,000 in our portfolio. Circular economy models were already in play, and we were able to identify what we were already doing in terms of decarbonization, waste management and energy equalization. As a result of this exercise, our business has become even better because it has increased the amount of collaboration taking place all across our business in an assortment of spin-off activities.”

Sustainability as a competitive advantage

Allocating time, money and encouraging debate throughout Arco also led to a series of better questions being asked of the sustainability project team.

Thomas highlights how “We were getting better answers from Gen Z because these 19 and 20 year olds who are committing to our business want personal and career development, but they also want to feel that they are aligning their efforts with a purpose that they can believe in. Frankly, we are all in a race for talent, and having a clear statement that this is a core part of what our company is about is integral to our strategy. It has made us very attractive in getting the best talent to join us and that also gives us a competitive advantage.”

Arco has aligned its sustainability strategy with selected UN Sustainable Development Goals. The company has invested approximately half a million pounds in virtual reality to reduce travel and create safe environments for its training courses. It has also made significant investments — along with Teesside University — to create a potential game-changing (and globally patent-protected) technology for recycling Personal protective equipment (PPE).

The company is now beginning to communicate its methodology and approach to sustainability externally. The final piece was the completion of a materiality audit to work out which elements of sustainability are important to Arco’s customers, the community and other stakeholders. That audit was conducted independently, and it identified that the company is already meeting approximately 78 percent of its stakeholders’ needs. The question now is, how can the company turn the missing 22 percent into a reality?

“We don’t yet have a full set of KPIs to measure the impact of our strategy,” says Thomas, “but we hope to have agreement on it by mid-year. We aim to set Science Based Targets (SBTi) which will inform our path to Net Zero. It’s amazing — if you link your sustainability strategy with your corporate strategy, put resources behind it, and report on it monthly you end up with a program that leads to a safe business, safe people and a safe planet. This isn’t a ‘nice to have’, it’s a ‘need to have’ and it’s totally worthwhile.”

Sustainability as a commercial imperative and the right thing to do

Focusing on sustainability and adding to the bottom line are not mutually exclusive. Operationally, it improves efficiently. For Arco, it has also added to the company’s bottom line by creating a differentiated approach. In a recent multi-million pound tender, for example, the sustainability score accounted for sixty percent of the weighting.

“You expect it to be about price,” concludes Thomas, “but sustainability was the defining factor in our ability to win this bid. I can name six contracts in the past four months where sustainability has been the key to Arco winning the business, and that’s because we can provide evidence of what we’re doing, where we’re going and how we’re going to get there. A company’s sustainability strategy and impact have out-and-out commercial implications as well as being the right and responsible thing to do.”

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