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 with out affecting the owns 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 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 of 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 through 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 to realize 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 economy 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 manufacture and process into new products that are mostly non-toxic to humans or environmental health.
- The company is greener than the traditional competition and working 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 make 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 longterm 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 a 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 is 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 impact on 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 the mission of your company. 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 show 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 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 found 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 this sustainably 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 acquiring of supplies is a very important step for your companies 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.
With your new-found motivation to do good, you need to take action and announcing it publicly with measurable results that your business actually can 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 the 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 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, socially and financially demands an authentic, sustainable company needs. Many employes and customers will appreciate these efforts because it can bring a positive effect on environmental performance and economic performance.
So make it your purpose to change to sustainable business and last for generations to come.