The profit and revenue of a business are not the only deciders of success and strength. Only Businesses will thrive that adapt to future changes and real human needs. Which why it is important to know what a sustainable business is and how to implement a long-term strategy to make your company sustainable.
What is a sustainable business?
It means to manage and regulate environmental, social, and financial demands. For a sustainable business, the focus is to meet present demands without affecting the own of future generations as these new generations want to meet their own needs.
With only short-term goals and milestones in mind and sacrificing everything to make a profit and revenue, it won´t lead to a sustainable business. This corporate culture with financial goals typically conflicts with the concerns of social and environmental concerns.
So a company that wants to be sustainable needs a more extended timeline for return on investment. But when the initial investments are made, it can actually lead to increased profitability.
Why is sustainability important for a business?
A sustainable business has three principles, also known as pillars.
Pillar one: The environment
The concerns to meet fundamental human needs such as availability and quality of air, water, food, and shelter. A business can address this public health risk by investing in ecosystem services and setting a foundation for sustainability.
By making sure to secure the natural environment and resources, a business won´t go extinct.
Pillar two: The Society
Understanding all human activities and creating healthy and liveable communities for current and future generations.
For a business, social sustainability means realizing the impact a company has on workers and society as a whole. It includes addressing human and worker rights, health and safety, work-life balance, social support, community engagement, and connection, diversity, and equity.
Pillar three: The Economy
The focus lies on nature, justice, and time to address the impacts that different generations have on the planet.
From a business perspective, the economic pillar focus is mostly on profit. But it isn´t about making a profit at any cost and not considering the demands of the other two pillars of sustainability. The goal is to ensure that all processes, products, and manufacturing activities are in line with environmental concerns while maintaining profit. To archive this, a company needs compliance, proper governance, and risk management.
Is your business already sustainable?
To know if your company is a mature and authentic sustainable business, it has to match the following criteria:
- The principles of sustainability( financial benefits for the company, natural world betterment, and social advantages for employees and members of the local community) are equally included in every business decision.
- Environmentally friendly products or services are supplied that replace the demand for nongreen products and/or services. And as well sells products that are recyclable which customers can return to the manufacturer and process into new products that are mostly non-toxic to humans or environmental health.
- The company is greener than the traditional competition and works together as a healthy and strong sustainable community with locally owned and operating businesses and non-profit organizations, along with regional corporations and shareholders.
- You use energy technology that has no negative effects on life and earth, which are solar, wind, ocean, and geothermal energy.
- The business operations are committed to making long-lasting environmental principles. It will help to improve Nature-based knowledge and technology in terms of food growing, harnessing energy, constructing things, doing business while healing ourselves, processing information, and designing our communities.
- Continuously processes are monitored, analyzed, redesigned, and implemented while doing business to stay sustainable.
When your business meets these criteria, it has the foundation to be a “green company.” But if your business has not implemented sustainability, it needs a good strategy to do so. It is often complex because this process requires long-term decisions and investments. And in terms of short-term profit, you have to adjust your exceptions to lesser earning results. The focus of a sustainable business is to have long-term success and returns.
How to create a more future sustainable business
Many companies have not integrated sustainability into their business strategy. But as this research shows, companies with high ESG (Environmental, Social, and Governance) ratings have lower equity and debt cost, as well sustainable practices can help improve overall financial performance while maintaining public support. So “doing good” can directly impact your business to do well.
With the following steps, you can create a sustainable business strategy and align it with your mission and shared values.
1. Finding the Problem and defining Objectives
If you want to make changes, you have to find out what sustainability means to your company, team, industry, and client. Discover the big problems that each group thinks are a priority.
A good start would be to ask the following question:
- How much waste is the business creating?
- Is the company culture struggling?
- Do our hiring practices attract diverse job candidates?
- Does our product help a certain targeted audience?
- Has our organization impacted the local community?
It will help define your company’s sustainable objectives. While doing this, you can save time in the future with the SMART goals approach by making sure your goals are “SMART,” Specific, Measurable, Achievable, Relevant, and Time-bound.
2. Making it your mission
As you have agreed on concrete objectives, you can start to define your company’s mission. For a sustainable business, a definite mission statement is very important.
The company´s focus should be on”doing” and capture your organization’s values and purpose in an effective mission statement. Aswell shows why you are doing that. In the mission statement should be answered the company´s five Ws.
“who, what, when, where, and why.”
Examples of an effective mission statement are:
- Tesla: “To accelerate the world’s transition to sustainable energy.”
- Sweetgreen: “To inspire healthier communities by connecting people to real food.”
Each one makes it clear what the company´s values are and how they are realized. As your company scales, you should consider how your mission statement will also grow. It should help a business to evolve with the market and not prevent your company from innovating.
3. Creating a strategy
After you find a strong mission, you need a sustainable business strategy. In creating a strategy, it should be your number one priority that your company stays profitable. If you can´t stay in business, it won´t help your cause. And these sustainable efforts may help you to get more revenue in the long term.
By taking advantage of sustainable corporate strategies, you can create more profit opportunities and protect the value of your business against increasing energy costs and expenses for regularity requirements. It also changes the way customers think about your brand and products, as well as the prices of resources.
A sustainable business uses the following widely practiced strategies:
- 1. Innovation & Technology
Changing the products and services towards less waste of natural resources in production and focusing on sustainable practices.
- 2. Collaboration
Building a network with similar or partner companies to share knowledge and mobilizing for innovation. An already-established partner can enhance your credibility.
- 3. Process Improvement
A process should be continuously evaluated and improved to reduce waste effectively. Making employers aware of the company-wide sustainability plan will help to integrate new and improved processes.
- 4. Sustainability Reporting
The company´s performance should be periodically reported if you can archive your goals. In the mission statement, you may already have incorporated this.
- 5. Greening the Supply Chain
Sustainable acquisition of supplies is a very important step for your company’s impact because it is much bigger than the product that your business consumes.
Not all eco strategies can be implemented into a company´s Eco-portfolio immediately. But a performance measurement and management system for sustainability can help to balance financial and non-financial long term measures.
4.Results
With your new-found motivation to do good, you need to take action and announce it publicly with measurable results that your business can actually archive. With a mission and a great strategy, you can move forward to reach your sustainable objectives.
Changing the Future
Many businesses are dangerous for nature and life on our planet, but the more companies are making it their mission to become and stay sustainable, the better it will be for all of us.
Of course, many cooperate executives won´t change anything in their business because they think it is not worth the time and money. However, a new makeover of the business model into a sustainable one can bring a lot of advantages and bring new revenue opportunities by creating new markets and attracting new customers and business partners.
With the right mission and strategy, your business can implement the environmental, social, and financial demands an authentic, sustainable company needs. Many employees and customers will appreciate these efforts because they can bring a positive effect on environmental performance and economic performance.
So make it your purpose to change to a sustainable business that lasts for generations to come.
FAQ
What is sustainability?
Sustainability refers to the practice of using resources in a way that meets the needs of the present without compromising the ability of future generations to meet their own needs. It involves balancing environmental, social, and economic concerns to create a more sustainable future.
What is corporate sustainability?
Corporate sustainability, also known as sustainable business or sustainable business practices, refers to the adoption of strategies and practices by companies to operate in a socially responsible and environmentally friendly manner. It involves integrating sustainability principles into all aspects of a company’s operations and decision-making.
Why is sustainable business important?
Sustainable business is important for several reasons. Firstly, it helps to mitigate the negative impacts of business activities on the environment and society. Secondly, it helps companies build resilience and adapt to the challenges posed by climate change and resource scarcity. Thirdly, it enhances a company’s reputation and brand value by demonstrating a commitment to social and environmental responsibility.
How can companies incorporate sustainability into their business strategy?
Companies can incorporate sustainability into their business strategy by setting clear sustainability goals and integrating them into their overall business objectives. This may involve developing sustainable business models, reducing greenhouse gas emissions, adopting clean energy sources, promoting social impact initiatives, and engaging with stakeholders to create shared value.
What are some examples of sustainable business strategies?
Examples of sustainable business strategies include implementing energy-efficient practices, reducing waste and recycling, sourcing sustainable materials, promoting fair trade and ethical supply chains, investing in renewable energy sources, and engaging in philanthropic activities that benefit local communities.
What is the role of business leaders in promoting sustainability?
Business leaders play a crucial role in promoting sustainability by setting a clear vision and goals, integrating sustainability into the company’s culture and operations, leading by example, and advocating for sustainable business practices within their industry and beyond. They have the power to influence decision-making and drive meaningful change.
How can businesses measure their sustainability efforts?
Businesses can measure their sustainability efforts by using metrics and indicators such as carbon footprint, energy consumption, waste reduction, water usage, social impact, and employee engagement. These measurements help companies track their progress, identify areas for improvement, and communicate their sustainability performance to stakeholders.
What is the triple bottom line?
The triple bottom line refers to a framework that considers three dimensions of sustainability: economic, social, and environmental. Instead of focusing solely on financial performance, the triple bottom line approach encourages businesses to evaluate their impact on people, the planet, and profit.
How does sustainability contribute to the triple bottom line?
Sustainability contributes to the triple bottom line, which considers three dimensions of business performance: environmental, social, and economic. By adopting sustainable practices, businesses can reduce their environmental footprint, enhance social impact, and achieve long-term economic success. The triple bottom line approach recognizes that a business’s success extends beyond financial profitability.
Why is sustainability in business necessary to address climate change?
Sustainability in business is necessary to address climate change because businesses are significant contributors to greenhouse gas emissions. By adopting sustainable practices such as reducing emissions, investing in renewable energy, and promoting energy efficiency, businesses can play a crucial role in mitigating climate change and transitioning to a low-carbon economy.
Can you give an example of a company that excels in sustainability?
Patagonia, an outdoor clothing and gear company, is often cited as an example of a company that excels in sustainability. They have implemented a variety of initiatives to reduce their environmental impact, including using recycled materials, promoting fair trade, and donating a portion of their profits to environmental causes.
What is the significance of building a future sustainable business?
Building a future sustainable business is crucial to address pressing global challenges such as climate change and social impact while ensuring long-term success and profitability. It involves adopting sustainable business practices and strategies that consider the environmental, social, and economic impacts of the organization.
What are some examples of sustainable business models?
Some examples of sustainable business models include circular economy models, where products are designed to be recycled or repurposed instead of disposed of, and shared economy models, where resources are shared among users to optimize their utilization and reduce waste.
How does climate change impact business sustainability?
Climate change poses significant risks and challenges to business sustainability. Rising temperatures, extreme weather events, and changing ecosystems can disrupt supply chains, increase operational costs, and affect customer demand. To mitigate these risks, businesses need to adapt and implement sustainable strategies that address climate change and reduce greenhouse gas emissions.
What role do metrics play in measuring and managing sustainability efforts?
Metrics are crucial for measuring and managing sustainability efforts. They provide quantitative data on key performance indicators such as carbon footprint, energy consumption, waste reduction, and social impact. Metrics help businesses track their progress, identify areas for improvement, and communicate their sustainability achievements to stakeholders.
How can businesses create a more sustainable future?
Businesses can create a more sustainable future by adopting sustainable business practices such as reducing greenhouse gas emissions, investing in renewable energy, promoting social inclusion, and adopting circular economy principles. Collaboration with stakeholders, such as customers, suppliers, and local communities, is also essential in driving sustainability initiatives.
How does Patagonia exemplify a sustainable business?
Patagonia is often hailed as a leading sustainable business. It has a strong commitment to environmental and social responsibility, including initiatives to reduce its carbon footprint, promote fair labor practices, and support environmental causes. Patagonia’s sustainable business practices serve as an inspiration and model for many other companies.
What is corporate sustainability and why is it important?
Corporate sustainability refers to the integration of sustainable practices and principles into an organization’s strategy and operations. It encompasses environmental stewardship, social responsibility, and economic growth. Corporate sustainability is important as it can enhance reputation, attract investors and customers, reduce risks, and contribute to a more sustainable future.
What is the role of sustainability in business leadership?
Sustainability is increasingly becoming a critical aspect of business leadership. Business leaders play a key role in driving sustainability initiatives, setting sustainability goals, and embedding sustainability into the organizational culture. By prioritizing sustainability, leaders can inspire and motivate their teams to adopt responsible practices and contribute to a more sustainable future.
