‘Being sustainable,’ ‘achieving sustainability’ and ‘committing to being sustainable’ are phrases that have become a seemingly ubiquitous part of business culture in the last decade, but what do they actually mean?
Many might automatically think of Corporate Social Responsibility (CSR) projects, which may range from litter picking, environmental education, recycling or planting trees or appointing a Sustainability Champion within the organisation. But true sustainability in business extends far beyond headline CSR activities and dedicating resources to a sustainability department.
Generally, there are two main categories to consider: The effect business has on the environment and the effect business has on society. A sustainable business strategy should address at least one of these areas but can touch on both aspects.
A study showed that companies with high Environmental, Social and Governance (ESG) ratings have a lower cost of debt and that equity and strong sustainability initiatives can improve financial performance while fostering public support.
Empowering employees through a dedicated Sustainability department is quite possibly the most important pillar of sustainability in business. By assessing the problem and defining objectives, the entire organisation is engaged in tackling the issues. With a lack of agency to drive organisational change any initiatives will appear superficial.
Sustainability has to touch all aspects of a business with targets, buy-in from all other departments, transparent communication and reporting and – crucially – the ability to shape policy.
This power enables a business to analyse every process to make improvements and energise the company’s triple bottom line – the impact a company’s actions have on profit, people and the planet.
Whether it is making ethically informed choices over supply chain partners, reducing waste and emissions, promoting recycling, or numerous other business-related decisions, stakeholder engagement in sustainability drives shared value for all parties, including shareholders, employees, supply chains, society and the planet.
These small changes can be the starting point for a large-scale programme with far-reaching impact.
The United Nations’ “Race to Zero” campaign thrust the idea of sustainability to the forefront of global industry. At the summit, a coalition representing 1,049 cities, 67 regions, 5,235 businesses, 441 of the biggest investors and 1,039 Higher Education Institutions joined 120 countries in committing to achieving net-zero carbon emissions by 2050 at the latest. Collectively, the coalition covers nearly 25 per cent of global CO2 emissions and over 50 per cent of the world’s GDP.
With this in mind, taking steps to reducing waste, cutting reliance on plastic, increasing the use of sustainable materials, investing in renewable sources of energy or raw materials and committing to a cause makes long-term sense both financially and environmentally and certainly reputationally.
Committing to a sustainable cause will not only demonstrate an understanding of the business around the issues we will be collectively facing as humans in view of safeguarding the planet, but will also create a whole new set of business opportunities:
Taking the strategic decision to adopt a full range of sustainable actions will enable market transformation, create new opportunities for innovation in filling the market gaps, offer a competitive advantage in bidding processes and engage new customers looking to make more ethical choices in their own lives by using their purchasing power.
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