Sustainability in business is the impact a business may have on the environment or society as a whole. Implementing sustainable business strategies as a business means aiming to positively impact the world and hopefully work towards solving some of the world’s most prominent challenges.
In this blog post, we’ll talk about why sustainability is so important to a corporation, who should work to embrace sustainability within their organization, dive into some of the benefits of corporate sustainability, discuss challenges and outline a plan for making your business more sustainable.
Why Is Sustainability So Important To A Corporation?
Sustainability within a corporation is important for a number of reasons. From an altruistic perspective, strategies organizations implement to promote sustainability may help solve problems like pollution, income inequality, racial injustice, and more.
From an operational perspective, being a sustainable business is often synonymous with being an efficient business; after all, if your business is sustainable, it’s adaptive to changes in the economy, environment, or other external factors and therefore requires less restructuring as time goes on. Taking the time to evaluate your sustainability efforts can reap dividends.
Efficiency eliminates duplicative costs and helps drive profitability, which is why sustainability initiatives are so beneficial.
It’s also important from a brand strategy perspective to be able to demonstrate your sustainable practices. This is because it matters to your consumers, investors, employees, future generations, and the community that you’re doing what you can to promote good in the world. This can significantly increase your business valuation.
Bonus Material: Free ESG Checklist Download
Who Can Improve Business Sustainability Within An Organization?
As organizations become more aware of global standards for environmental, social, and governance (ESG) initiatives, more are setting corporate performance goals to align with these best practices. However, to achieve these goals there must be action taken by all employees.
This means that sustainability should be an ongoing initiative woven into every department and tier of an organization. Additionally, it is something that more and more new companies are adopting as part of their business practices (GreenBiz).
Let’s explore what types of employees can improve business sustainability and what that might look like based on their role at the company:
Executive leadership: When it comes to supplier sustainability, executive leaders hold the responsibility of allocating funds to support sustainable vendors. It’s also their job to invest in research on long-term sustainable solutions, project financial outcomes, and forecast risk associated with various options. This funding and research can then power the policies and infrastructure to achieve sustainability goals.
Department heads: It’s the job of department heads to advocate for the policies established by executive leaders. This means leading by example in following those policies and ensuring that frontline employees are following suit through feedback and disciplinary action where appropriate. If responsibilities include risk management, are employees using supplies in a way that’s creating undue risk (i.e. inefficiently or incorrectly?) If they include vendor management, is due diligence being completed consistently and on time? Is the whole team fostering positive relationships with your vendors?
Individual contributors: Frontline employees should respect the policies regarding supplier sustainability goals by actively reading, attesting to, and following the guidelines they set forth. It’s also important that the employees witnessing day-to-day operations communicate gaps or challenges to managers so that improvements can be made. An easy way for employees to access all relevant policies at once is through a centralized sustainability policy portal.
It’s clear that the responsibility of upholding sustainable practices does not fall solely on the shoulders of the executive leadership team, management, or individual contributors. To truly infuse sustainable business practices into your organization, it’s critical that your efforts permeate all levels of the corporation’s hierarchy.
What Are Some Of The Benefits Of Sustainable Business Practices?
Prioritizing environmental sustainability yields a myriad of types of benefits to any corporation. Let’s dive into two these business benefits of them:
Scandals have been proven to take a direct toll on an organization’s finances, both in the short and long term. Reputational risk is also amplified dramatically by the See-Through Economy. If you fail to implement proper sustainable business practices, you can upset customers or investors and damage your reputation.
Instead of needing to divert valuable resources away from the core business to deal with public backlash, institute a sustainable business strategy that adequately protects the environment, your consumers, and your employees. This will serve as a competitive advantage; purpose-driven organizations not only attract and retain more employees, but there is a rapidly growing market for sustainable goods and services.
Too often, sustainability is viewed as an initiative that will sacrifice profits. In fact, tapping into that growing demand for sustainable products and services is a significant opportunity to increase profits.
In the past couple of years, the majority of consumers worldwide have expressed that they are willing to change their consumption habits if it could lessen their negative environmental impact. The bottom line is: people are willing to pay more for products that contain sustainable ingredients and support businesses that are committed to this business model.