For Commercial Group, going green is not just a matter of good PR – it is vital to the success of their business. Christian Annesley finds out how their eco-plans are being realised.
“This isn’t just eco-bling, we are really trying to do this properly,” says Arthur Hindmarch, one half of the brother-sister team that set up Cheltenham’s office services company Commercial Group 18 years ago. The thriving company is more than a year into a radical programme to cut its carbon footprint by 75 per cent over three years.
It sounds an ambitious target, and it is. Getting there will take more than a few low-energy light bulbs and judiciously placed recycling bins, as Hindmarch and his sister and co-founder Simone Mann are finding. “In 2006 we decided to put our corporate social responsibilities at the top of the business agenda. It chimes with everything we are about as a company, and it wasn’t a decision we took lightly,” says Mann.
So in February 2007 the three-year plan was rolled out, with emissions from transport at the top of the hitlist, since these were accounting for nearly 90 per cent of Commercial’s total carbon output.
“It’s a major investment. Our commercial fleet has been tweaked to run on waste vegetable biodiesel and we’ve installed a biodiesel fuelling station here on site,” says Hindmarch. “We have also introduced intelligent routing for vehicles to keep our miles to a minimum.”
The change is already paying off. Commercial’s carbon footprint was halved last year, just by transforming its fuel usage. The next phase – years two and three – is to get the detail right across every part of the business to hit that three-quarters reduction target.
“This isn’t just about us, either,” says Mann. “We’ve applied the thinking to our supply chain, too. We have a traffic light system in place identifying those of our supply businesses that need to improve their environmental sustainability. Red means they have to make immediate changes, while amber means they have a window of opportunity to change or risk losing our custom.”
Hindmarch and Mann say that while the changes are driven first by environmental concern, it also makes business sense. “We have official Carbon Neutral status and that plays well with many businesses. Particularly with the bigger customers, these days if you aren’t seen to be going green you won’t keep the business. It’s true of offices supplies and services since companies are looking for quick wins to improve their sustainability, and we are an easy target.”
The siblings have a lot more on their agenda besides green goals, however. Commercial has been profitable for each of its 18 years of trading. Last year was the best yet, and the pair reckon their constant push to extend the service offering to the businesses they serve, plus a real commitment to the company’s staff, lies at the root of their achievements.
“Staff have a real say in the direction of the business. It’s an open environment. We always want to hear from them because they are on the front line, and we certainly don’t have all the answers,” says Mann.
“Not a day goes by when we don’t talk to our staff, and that’s how it should be. When you are going to work every day for a company, besides wanting to feel rewarded and secure, the main thing you need to feel good about is having a real say in the direction of the company. That’s what our staff get, and it’s reflected in the high number of long-serving staff members we have.”
Mann says the company’s staff turnover is low and reflects the care it shows. “It’s a supportive environment. If you commit to keeping your staff long term, you have to recognise that they won’t be on the ball every year that you employ them. At some point along the way life may get in the way, and we want to be there for them then, too. Once they get through it they will bounce back.”
Many of Commercial’s 130 staff also benefit from free share options, giving them a stake in the business and the direction it takes.
Mann says: “We have always seen the value of staff owning a piece of the business. It means it is their baby as well as ours. And we all want to enjoy growing as individuals while we grow the business. We aspire to grow in an honourable way and broaden our horizons, and be proud of our behaviour.”
This kind of idealism smacks of long-term commitment, and, sure enough, Mann and Hindmarch say their only plan is to grow the business from its current level of about £25m annualised turnover to £40m by 2012.
Hindmarch says: “We get approached all the time to see if we will sell, but we have no exit strategy. We just want to continue innovating and to make sure we understand where the market is heading and what our customers want.”
Talking of customers, Sky is the company’s biggest, but it accounts for less than one tenth of turnover. Most of Commercial’s contracts are far smaller, even if it is well-placed to serve big nationals and multinationals with its slick e-procurement offering and systems expertise that embraces vitualisation tools such as VMware.
Not surprisingly, too, the pair are unfazed by the bout of economic gloom at the moment. “We have always been cash-positive – we own the building and have never taken on much bank debt,” Hindmarch says.
“That means any credit difficulties suffered by our competitors will present an opportunity for us. With our financial strength we can extend credit terms to some customers and take a long-term view. That should help us pick up plenty of business, even if we aren’t really in the market to acquire companies. We prefer just to focus on our own growth.”