The what, why and how of sustainability in business
Sustainability in business is becoming more and more recognized as consumers become increasingly aware of the consequences that companies have on the environment and the urgency of climate action. As companies grapple with these demands, they must be vigilant to ensure that they understand what it means for a business to be sustainable so that they do not do more harm than good.
We would love to see more businesses step up and implement sustainable practices whether large or small to set the precedent for a clean and healthy planet in the future.
What does sustainability in business mean?
“Sustainability” in business refers to the effect of conducting business on the environment and society. It means ensuring that business operations do not inhibit future generations and that the planet’s resources are not overused at a rate that prevents a sustained future. A sustainable business is one that does not have a net-negative impact on the environment, but rather a net-zero or even a positive impact. (Harvard Business School)
Many companies have been responding to the demand for climate action and the business imperative of climate change, especially as it will affect their businesses in the future. According to a survey of over 2000 global executives, Deloitte Global found that almost 60% of companies had internal sustainability initiatives in place such as reducing travel and plastic. Others have set larger goals, such as Adobe that aim to run on 100% renewable energy by 2035. (Forbes)
Why you should run a sustainable business
Running a business sustainably is beneficial for the environment and overall society, especially since businesses have the potential to make significant changes with their decisions. But it can also be beneficial for you since sustainability has been shown to drive business success.
Firstly, research conducted by Deutsche Bank and The Carbon Disclosure Project has found that the majority of companies with higher ratings for environmental, social and governance (ESG) factors outperform the market in the medium and long term. (McKinsey) This superior performance may be attributed to more efficient use of resources, but will also increasingly be a result of shifting consumer demands for sustainable business practices.
It is also important to address sustainability in order to ensure alignment with the organization’s mission and values. In fact, alignment with organizational values is cited as the top reason why companies have decided to address sustainability.
Sustainable practices are also critical to build, maintain or improve the reputation of your company. Consumer expectations have been increasing as consumers speak out with their voices and their wallets. Companies can no longer ignore the impacts of their operations and will need to alter their practices to remain competitive.
Sustainability in business can also be an essential factor in attracting and retaining talent. In fact, 21% of organizations consider attracting, motivating and retaining employees as a top reason for addressing sustainability. Sustainability helps to increase employee happiness as they feel more fulfilled with their work- doing good for the planet increases the feel-good factor so that employees will feel good about the work they do and the company they work for.
How to run a sustainable business
Sustainable business practices can be broken down into two levels – internal initiatives and overall changes.
Internal initiatives concern the everyday operations of the company such as the behaviors and resources used by employees.
- Going paperless
- Offering fresh food and drink stations in your office instead of selling machine food packed in plastic
- Allowing remote work to decrease emissions from commuting
- Reducing unnecessary air travel
- Offsetting emissions you cannot avoid
- Educating and encouraging your employees to adopt more sustainable lifestyles
These initiatives are easy to implement and are a great way to start making a difference. Although they may seem small, internal initiatives can actually go a long way, especially within large companies. For instance, encouraging 100 employees to go paperless can save a lot of paper altogether. Furthermore, these initiatives can permeate into the lives of employees, especially if they are educated about the reasoning behind the changes.
On the other hand, overall changes consider the overall operations of the business itself and look at ways that you can improve the sustainability of the business processes itself. For example, you can be intentional about your choices of suppliers, raw materials used, and production processes.
Patagonia is an example of a company that is a leader in sustainable business practices. At its core, the company values the preservation of the planet and this commitment is evident through the products they create, the materials they use, and their contributions to environmental causes. Nearly 70% of Patagonia’s products are made from recycled materials and they aim to use 100% renewable or recycled materials by 2025. In addition, they have contributed over US$100M to grassroots organizations. Rather than focusing on getting the consumer to buy more of their products, they encourage consumers to only buy what they need and have various programs that help customers repair their products to ensure longevity of utilization. Patagonia demonstrates that sustainability makes economic sense and that companies do not have to cut corners or compromise on sustainability in order to succeed.
Ford Motor Company is another great example of a company that, although manufacturers products that are inherently harmful to the environment, have made commitments and progress towards attaining sustainable goals. For example, in 2018, they reached the goal they set in 2010 to reduce operational GHG emissions per vehicle produced by 30% – and did so eight years early! Their long-term goals include responsibly sourcing all raw materials used in all vehicles, only using recycled and renewable plastics in all vehicles, and using 100% renewable energy for all manufacturing plants by 2035. (Business Wire)
Therefore, you too can take sustainable business practices even further by thinking about ways that you can change the very way you currently conduct business. Choosing to start with small changes or changing the way your business runs will send a message not only to your employees but also to the world. Sustainability in business can have a real impact and is beneficial for everyone.